Sunak outlines new schemes to save jobs and business
Thursday, September 24, 2020
Chancellor Rishi Sunak has announced a new Jobs Support Scheme in a bid to stave off mass unemployment, but there is still no specific relief for so-called ‘Excluded UK’ workers including some micro print businesses and contractors.
In his ‘Winter Economy Plan’ announced today (24 September) Sunak said that the new Jobs Support Scheme would replace the furlough scheme, which expires at the end of next month.
The new Jobs Support Scheme will run for six months, starting in November. Employees will need to work a minimum of a third of their normal hours and be paid for that as normal.
The government and the employer will than share the payment to cover two thirds of the remaining hours.
“Employees working 33% of their hours will receive at least 77% of their pay,” HM Treasury stated.
Anyone who was employed as of yesterday (23 September) is eligible.
Millions of workers are still currently on some form of furlough.
SMEs are automatically eligible for the new scheme, but larger businesses will need to prove their business has been impacted by the pandemic.
Support for the self-employed is also being extended.
The news was largely welcomed. The CBI tweeted: “Rishi Sunak has taken bold steps to save hundreds of thousands of viable jobs this winter. Wage support, tax deferrals and help for the self-employed will prevent unnecessary job losses as the UK tackles the virus.”
BPIF chief executive Charles Jarrold also commented via a tweet prior to Sunak’s speech. He said: “Retaining skills (and jobs) while the economy is suppressed to deal with a public health crisis makes sense, and will also help business confidence. Print is resilient but needs help through this, albeit in a balanced manner.”
Bounceback Loans and CBILS loans are also being extended, allowing firms to “pay as you grow” Sunak said.
A new loan scheme to succeed CBILS will also be announced in the New Year.
The 15% VAT rate cut for tourism and hospitality has been extended until 31 March 2021, while up to 500,000 businesses that deferred VAT payments until March 2021 will be able to split the payment up over 11 months.
Subsequent to the announcements, Stephen Woodford, CEO of the Advertising Association, commented: “Given the widespread concern that the ending of the furlough scheme would lead to a wave of redundancies, we are relieved to see the Chancellor’s announcement. It provides greater security for those whose jobs are at risk from the weakened economy and the new COVID-19 restrictions. It offers greater flexibility too, covering part-time work, so businesses can be more responsive to demand and keep people engaged in their workplaces.
The AA has proposed an advertising tax credit as a means to stimulate the consumer spending and the wider UK economy.
"We also recommend Government considers business rates relief on office premises and out-of-home poster sites, to ensure that these sectors aren’t further disadvantaged by increased lockdown measures. We are entering a crucial time for the economy in transitioning from the furlough scheme to these new measures for supporting employment, and as we approach the critical Christmas trading period and the end of the Brexit transition. Targeted support now will protect jobs across the UK advertising and media landscape and further aid the fragile economic recovery.”
However, there was disappointment for the so-called ‘Forgotten Ltd’ and ‘Excluded UK’ micro businesses, freelancers and contractors – numbering around 3m – who have fallen through the gaps in the existing support packages for the past six months and did not gain the specific support they had been lobbying for.
“I cannot save every job. I cannot save every business. No Chancellor could do that,” Sunak stated as he gave his address to Parliament.
Re-touching expert Bill Greenwood, who is one of those affected, tweeted his disappointment yesterday after Sunak's likely announcements had been widely trailed.