Rishi Sunak reveals Jobs Support Scheme as he unveils winter economy plan
Chancellor Rishi Sunak has revealed his winter economy plan.
Addressing the Commons, Mr Sunak outlined a package which included the new Jobs Support Scheme and an extension of the self-employed grant.
He said: "Our task now is to move to the next stage of our economic plan, nurturing the recovery by protecting jobs through the difficult winter months. The underlying rationale for the next phase of economic support must be different from what came before.
“The primary goal of our economic policy remains unchanged – to support people’s jobs – but the way we achieve that must evolve.”
The Jobs Support Scheme will see the Government “directly support” the wages of people in viable jobs working at least a third of their normal hours.
It will allow employers to keep employees in a job on shorter hours, rather than making them redundant.
To be eligible, employees must work at least 33% of their normal hours. For remaining hours not worked, the government and employer pay 1/3 wages each. So employers working 33% of their hours will receive at least 77% of their pay.
The scheme will begin on 1 November and last for six months.
Mr Sunak also announced that the self-employment scheme is being extended.
On bounce back loans which have given one million small businesses a £38 billion boost to survive, Mr Sunak announced a “pay as you grow” scheme to give these firms more time to repay the loans.
He told the Commons: "This means loans can now be extended from six to 10 years, nearly halving the average monthly repayment. Businesses who are struggling can now choose to make interest-only payments and anyone in real trouble can apply to suspend repayments all together for up to six months. No business taking up pay as you grow will see their credit rating affected as a result."
Rishi Sunak also announced that the temporary reduction of VAT rates from 20% to 5% will remain in place until 31 March 2021.
He said: "The final step I’m taking today will support two of the most affected sectors, hospitality and tourism. On current plans, their VAT rates will increase from 5% back to the standard rate of 20% on January 13."