UPDATED U.K. Chancellor of the Exchequer Rishi Sunak has unveiled a new job protection scheme starting Nov. 1 that is valid for six months, replacing the job retention scheme that ends in October.
Addressing the House of Commons, Sunak revealed that the Job Support Scheme will directly support the wages of people in work, giving businesses who face depressed winter demand the option of keeping employees in a job on shorter hours rather than making them redundant.
The scheme will support “viable” jobs where employees must work at least a third of their normal working hours and be paid for that work, as normal, by their employer. The government and employers together will cover lost pay. This scheme applies to all small and medium sized businesses. Bigger businesses can be covered if their turnover is significantly reduced. All employers will be eligible to apply even if they have not used the furlough scheme before and businesses can use it along with the existing job retention bonus.
The Treasury tweeted details of the various schemes Sunak announced in Parliament.
“From 1 November, for the next six months, the Job Support Scheme will protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19.”
“The Self-Employment Income Support Scheme extension will support viable traders who are facing reduced demand over the winter months, covering 20 per cent of average monthly trading profits via a government grant.”
An initial taxable grant will be provided to those who are eligible for the scheme and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sun will cover three months worth of profits from November to the end of January. This is worth 20% of average monthly profits, up to a total of £1,875 ($2,389).
After that, the level of grant is calculated based on the employee’s usual salary and will be capped at £697.92 ($888.81) per month.
An additional second grant will be available from February to the end of April, but this will be adjusted according to changing circumstancea.
“More than one million businesses which have borrowed under the Bounce Back Loan Scheme will be offered the choice of more time and greater flexibility for their repayments.”
“Lenders have been enabled to offer Coronavirus Business Interruption Loan Scheme borrowers more time to make their repayments where needed.”
“Businesses who deferred their VAT will no longer have to pay a lump sum at the end of March next year. They will have the option of splitting it into smaller, interest free payments over the course of 11 months – benefitting up to half a million businesses.”
Reacting to the measures, Julian Knight, chair of the House of Commons Digital, Culture, Media and Sport Committee, said: “We welcome this economy-wide intervention from the Chancellor. However, it still leaves many hundreds of thousands of workers in events, arts and cultural parts of the economy with a grim future.”
“The truth is, three times as many people in these sectors are currently on furlough than the national average, which suggests that the Job Support Scheme may not be able to stop unprecedented redundancies and many organisations from facing extinction.”
Details on how these schemes will directly affect the business of entertainment are being awaited.