The Chancellor, Rishi Sunak, has today (Sept 24) announced that the Job Support Scheme will replace the Job Retention Scheme at the beginning of November and running for 6 months.
The scheme aims to encourage employers to keep employees on their books, rather than making them redundant.
The scheme means that as long as employees in SMEs are working 1/3 of their usual hours, the Government will pay 2/3 of their wages, so that less revenue is spent on paying staff when they may just be getting back on their feet.
The Chancellor stated that this scheme is designed to support viable jobs, and that he wasn’t able to save every business from going under.
The Chancellor of the Exchequer Rishi Sunak said:
“The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery…
“Our approach to the next phase of support must be different to that which came before.
“The primary goal of our economic policy remains unchanged - to support people’s jobs - but the way we achieve that must evolve.”
There was also an announcement regarding the extension of ‘bounce back’ loans extended so that SMEs have up to 10 years to pay back the loans with their credit score being unaffected.
The chancellor ended his statement by announcing that in order to protect the hospitality and tourism sectors, their VAT cut down to 5% would be extended through to March.
In her reply, Shadow Chancellor, Anneliese Dodds, asked the chancellor why it had taken so long for her suggestions to be taken seriously in regards to this scheme and whether this scheme would do what it set out to do – will it really retain jobs, or would employers rather pay fewer staff full time?