The Furlough scheme ensured that businesses who had been financially hit by the ongoing pandemic, as well as those who had been forced to close, would not be forced to lay off workers to make ends meet - with the government guaranteeing 80% of workers' wages up to a maximum of £2,500 a month. It is much less generous than the furlough scheme but is still expected to cost the Government £300million per month for every one million workers it supports.
"While the chancellor has rightly aimed to create a European-style short-hours working scheme, design flaws mean that the new Job Support Scheme will not live up to its promise to significantly reduce the rise in unemployment", said Resolution Foundation chief executive Torsten Bell.
The government will intervene to help top up some of the missing two-thirds of their pay.
The job support scheme will run for six months from November 1.
The Jobs Support Scheme will only help those on the PAYE payroll.
Chancellor Rishi Sunak, in a speech to legislators, unveiled his plan to subsidise the wages of workers whose hours are cut due to the pandemic as part of a wider package of measures to help businesses and bolster the economy. "We obviously can't sustain the same level of things that we were doing at the beginning of this crisis".
"Many musicians have already fallen through the gaps in the Self Employment Income Support Scheme and will continue to be excluded under the new measures". Under the scheme, firms are being allowed more time to repay their loans.
In addition, up to half a million business who deferred their Value-Added Tax bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments.
To minimise unemployment due to the pandemic, the United Kingdom government will also give firms £1,000 for every furloughed employee kept on until at least the end of January, £1,500 for every out-of-work 16-24 year-old given a "high quality" six-month work placement and £2,000 for every under-25 apprentice taken on until the end of January, or £1,500 for over-25s. The Resolution Foundation says this is nearly twice as big a payment for hours not worked (estimated at £312 a month for the average worker protected under the JSS) as the employer would have had to cover under the furlough scheme for an employee on the average furlough wage (£1,400 per month).
Britain's biggest firms have been told they can not pay dividends, dish out bonuses or sack staff if they want to benefit from Rishi Sunak's latest coronavirus bailout.
The Government's chunk of the support will be capped at £697.92 per month. "Understandable given need to adapt as economy changes... Our plan needs to adapt and evolve". Commercial lenders who offered loans to larger businesses under the Coronavirus Business Interruption Loan Scheme will also be permitted to extent the repayment period where this will help businesses. "With the United Kingdom remaining in crisis mode as coronavirus cases rise, ongoing, flexible financial support for businesses will be essential until the economy recovers".
This includes extending the length of the loan from six years to ten, which will cut monthly repayments by almost half. In Sunak's statement to the House of Commons he said that we were fundamentally in a better position now than we were when the storm broke in March.
McClarkin also describes the Government's decision to not extend the business rates relief for pubs as concerning. Leaders have been grappling with the prospect of having to make hard decisions regarding the future of their businesses and workforce, specifically whether they can keep staff on through the winter months. Workers who find themselves within in industries where cashflow remains hampered or precluded by Government measures are likely to lose their jobs. Those out of work are facing the toughest jobs market in a generation with LinkedIn data finding that job applications are three times more competitive than past year.
‘Lies and incitement’: Israeli ambassador slams Abbas’ anti-peace speech at UN
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