Chancellor announces new Job Support Scheme

The Chancellor has announced the launch of the government’s new Job Support Scheme as part of the next phase of coronavirus support measures for workers.

Rishi Sunak told the House of Commons that the government must “protect as many viable jobs as we can”.

Employees must work a minimum 33% of their hours to be eligible for the scheme. For the remaining hours not worked, the government and employer will each pay 22% of an employee’s wages, meaning employees who work 33% of their normal hours will receive a minimum 77% of their pay.

Sunak revealed the six-month scheme will begin from 1 November, following the end of the furlough scheme which was first announced in March at the beginning of the crisis. The furlough scheme has been used to pay 80% of the wages of millions of employees affected by COVID-19 during lockdown, but is due to finish on 31 October.

In his economic statement, Sunak repeated that the furlough scheme is ending because the support must “adapt and evolve”. He said the government had “paid people to stay at home and not work” but added that businesses around the UK are now facing “uncertainty”.

The Chancellor had been under recent pressure to tackle the threat of rising unemployment in the UK – with the country now facing up to six months of coronavirus measures during the second wave.

As part of his statement, Sunak also announced a “pay as you grow” scheme for businesses that have taken government guaranteed loans during the COVID-19 crisis.

“Loans can now be extended from six to ten years, nearly halving the average monthly repayment,” Sunak told the House of Commons.

Businesses can also move to interest only payments or suspend payments if they are “in real trouble” for up to six months, and Sunak added that no credit rating will be affected. Coronavirus Business Interruption Loans will be extended for up to 10 years.

The Chancellor also revealed he is cancelling the planned increase of VAT from 5% to 20%, which was due to come into effect in January, with the lower rate of 5% remaining until 31 March next year.

Meanwhile, the UK’s usual financial statement of the year – the Autumn Budget – which would have been expected in October or November, has been cancelled.

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