Rishi Sunak reveals measures to replace furlough scheme
Chancellor Rishi Sunak has announced a range of measures to replace the furlough scheme, which helped protect jobs through the lockdown weeks and beyond.
The latest measures will offer targeted government support, rather than the blanket approach that was introduced at the start of the pandemic.
He outlined details of a new scheme called the Job Support Scheme, which will last six months from November.
As part of the scheme employees must work a minimum of 33% of their hours. For the remaining hours not worked the Government and employer pay a third each, which means employees working 33% of their hours will receive at least 77% of their pay.
Sunak explained it is “fundamentally wrong” to keep people in unviable jobs.
He will also support two of the sectors worst hit by the pandemic, namely hospitality and tourism. For these sectors he is cancelling the planned increase of VAT from 5% to 20%, which was due to come into effect in January. Instead the lower rate of 5% will remain until March 31 next year.
He explained that support for these sectors so far has helped support 150,000 businesses and 2.4 million jobs.
Meanwhile 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, he said. “We are protecting millions of jobs and businesses.”
He also revealed a “pay as you grow” scheme for businesses, which took government guaranteed loans during the crisis.
“Loans can now be extended from six to ten years nearly halving the average monthly repayment,” he explained. No credit ratings will be affected by this, he added.
A new loan scheme will be revealed in January 2021.