Chancellor Rishi Sunak has confirmed a salary top-up scheme designed to minimise job losses over the next six months will be introduced on 1November as tighter Covid-19 restrictions remain in place.
Speaking in the House of Commons, Sunak outlined the Job Support Scheme and more financial help for businesses this lunchtime (24 September).
Sunak said the resurgence of coronavirus posed a "threat to the fragile economic recovery" and protecting jobs was the government's priority through the "difficult winter months".
All small and medium-sized businesses will be given the option to cut staff hours and pay with the government and employers paying part of the lost wages. Large businesses will be eligible if their turnover has been affected by the Covid-19 pandemic.
Sunak said employees will work shorter hours rather than being made redundant. Employees must work at least a third of their contracted hours under the scheme. For the remaining hours, the government and employer will pay a third of the wages each.
This means an employee working 33% of their hours would get 77% of their salary. He said the plan would " support viable jobs".
From 1 November, for the next six months, the Job Support Scheme will protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19. pic.twitter.com/8NpIKpQV8y— HM Treasury (@hmtreasury) September 24, 2020
The measures are needed as the second wave of Covid-19 sweeps the country. Boris Johnson introduced tighter restrictions on public life as a result.
These include pubs and restaurants having to close at 10pm from today (24 September).
The furlough scheme introduced to prevent mass-redundancies at the start of lockdown in March is set to expire next month. Millions of workers are still receiving part of their salary through the scheme.
Elsewhere, the self-employed will also be offered continued support on similar terms to the salary top-up scheme.
He also outlined a "pay as you grow" scheme for businesses which took government guaranteed loans during the crisis. pandemic. Sunak said: "Loans can now be extended from six to ten years nearly halving the average monthly repayment."