The chancellor has today announced a new Jobs Support Scheme that will see the government “directly support” the wages of those in part-time work.
The scheme, which will run for six months starting this November, will see the government attempt to preserve “viable” jobs by subsidising the pay of employees who work a minimum of 33% of of their normal hours. For the remaining hours not worked, the government and the firm will pay a third of the wages each.
This means that employees will receive a minimum of 77% of their wage under the scheme.
It comes as the chancellor noted that furlough was “the right scheme at the time we introduced it”, adding that “I cannot save every business, no chancellor could.”
He added: “But what we can and must do, is deal with the real problems businesses and employees are facing now.”
The new measures will work to “protect as many viable jobs” as possible, with the aim to target support at firms that “need it the most”.
In addition to the wage support, the chancellor also unveiled ‘Pay as You Grow’ loans, that will see bounce back loans extended from six to ten years. Firms will be able to make interest-only repayments, while their credit ratings remain unaffected.
Business interruption loans will also be extended for up to ten years, as part of the new measures.
In addition, the Sunak also announced an extension of the self-employed grant, adding that it will be extended on similar terms to the new Jobs Support Scheme.
Targeting what he labelled as the “hardest hit” industries, the chancellor also announced that the 5% VAT rate for the hospitality and tourism sector would now remain in place until March 2021, in what he called a “final step” to support both industries going forward.
The VAT rate for both industries was initially set to rise back to 20% in January of next year.
Sunak said that the new measures are a “collective responsibility shared by all, because the cost is paid by all”, adding that the latest measures mark “radical interventions” in the UK labour market.