Chancellor Rishi Sunak announces new 'Job Support Scheme'

Financial Reporter

24 September 2020

Chancellor Rishi Sunak has unveiled a new Job Support Scheme to replace the furlough scheme from the 1st of November.

The six month scheme will allow employees to work a minimum of 33% of their normal hours.

Employers will continue to pay the wages of staff for the hours they work - but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.

This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can’t work. Employees working 33% of their hours will therefore receive at least 77% of their pay.

The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.

The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme, with further guidance being published in due course.

It is designed to sit alongside the Jobs Retention Bonus and could be worth over 60% of average wages of workers who have been furloughed – and are kept on until the start of February 2021. Businesses can benefit from both schemes in order to help protect jobs.

During his statement in Parliament, Sunak said that the support must "adapt and evolve", saying that it is "fundamentally wrong" to keep people in unviable jobs.

Joshua Elash, director of property lender MT Finance, commented: "Contrary to the Chancellor’s assertions, now is exactly the time to lay out a long-term plan so as to prevent us from continuing to lurch from one expensive knee-jerk reaction to another.

"The job support scheme won’t protect viable jobs in the long run, and it certainly won’t create jobs; it’s simply helping create a zombie economy.

"We should be investing these huge sums to improve and create safer travel and working conditions in a way which would leave a positive legacy. The Chancellor's approach is to defer tax repayments, and to hand out cash, feeding inefficiency, which is only going to postpone and further aggravate what is going be a significant recession. This is not sustainable."

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