Chancellor Rishi Sunak has announced fresh measures to replace the furlough scheme and help the UK economy to continue to recover during the second wave of coronavirus infections.
Here are the changes at a glance:
– The Jobs Support Scheme (JSS), a form of wage subsidy for “viable” jobs, will replace the furlough scheme, which will be wound down on October 31.
– The JSS will allow staff to be paid by their employer for working at least a third of their usual hours, with the Government topping up part of their salary that would have otherwise been lost due to working reduced hours.
– Under the scheme, a worker doing a third of their normal hours will still receive 77% of their usual pay, up to a cap of £697.92 per month – 33% from their firm for the hours worked, a 22% top-up from the employer and a further 22% from the state.
– All small and medium-sized businesses will be eligible for the wage support, which starts in November and runs for six months, but larger businesses will have to prove their profits have been hit by the pandemic.
– It is expected to cost the Treasury an estimated £300 million a month for every million workers enrolled, compared with the furlough scheme which has cost about £6 billion a month.
– The current self-employed grant will be renewed on similar terms to the new Jobs Support Scheme, the Chancellor said.
– The temporary reduction of VAT rates from 20% to 5% for the hospitality and tourism sectors will be extended for a further two months, with a new deadline of March 31 2021.
– Mr Sunak said the extension of the VAT cut would add around £800 million to the existing £2.5 billion cost of the measure.
– Business “bounce-back loans” will have a “pay-as-you-grow” element added, giving loanees 10 years rather than six years to repay the money, a move that will slash monthly repayments by almost half, according to the Chancellor.
– Those struggling to repay their bounce-back loans will be able to choose to make interest-only payments and “anyone in real trouble” will be permitted to suspend repayments all together for up to six months, said Mr Sunak.
– The deadline for taking out a coronavirus business interruption loan will be extended until November 30, with Mr Sunak also increasing the Government guarantee on them for up to 10 years.