Massive U-turn as Chancellor unveils emergency job scheme

29th Sep 2020
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Oh Great Britain, if I had to describe it to an outsider I’d call it “The Land of U-turns”. In the last month alone we’ve had a U-turn on the Withdrawal Agreement, a U-turn on A-level and GCSE results, and now we’ve had a U-turn on furlough as the Chancellor Rishi Sunak announced today, despite months of protestations to the contrary, that the government will, in fact, now continue to top up wages of workers who have not been able to return to the workplace full-time due to coronavirus.

Dubbed “The Jobs Support Scheme”, it will replace the furlough scheme (or Coronavirus Job Retention Scheme) which is due to end at the end of next month. The JSS will see workers get three quarters of their normal salaries for 6 months. Although the CJRS is set to end at the end of October, a whopping 3 million workers - that’s 12% of the UK’s entire workforce - are still on partial or full furlough leave. 

This is going to be a huge victory for millions who have been campaigning for months for an extension to the furlough scheme. From 1st October the government will only pay 60% of wages and 20% has to be footed by the employer. With new restrictions in place and a Lockdown-Lite set to be in effect for the next 6 months, the possibility of businesses being able to afford staff wages with reduced capacity and severely affected trading is simply intangible. It’s only right then that the government has now stepped in, albeit as late as it is.

So how will the Jobs Support Scheme work? 

  • Under the scheme the government will subsidise the pay of employees who are working fewer than normal hours due to reduced demand.
  • Employers will pay staff for the hours they do work but for any hours they can’t work then the government and the employer together will each cover one third of the lost pay.
  • The grant will be capped at £697.92 per month.
  • All small and medium sized businesses will be eligible for the scheme.
  • Larger businesses will be eligible if their turnover has fallen during the crisis.
  • The scheme will be open to employers across the UK, regardless of whether they have previously used the furlough scheme or not.
  • The scheme will run for 6 months starting in November.

On top of this, a cut in VAT for the hospitality and tourism sector, due to end in January, will also be extended until March. Also, businesses that have borrowed money through any of the government loan schemes will be given more time to repay money borrowed. So instead of having 6 years to repay, you now have 10. Thanks, government! :) The “Bounce Back”, “Pay As You Grow” and “Coronavirus Business Interruption Loan Scheme” loans, due to end in October and November, will now be extended and businesses will be given more time to get themselves further in debt - a win-win for everyo….oh wait.

Anyway! I don’t want to rain on anyone’s parade as undoubtedly this is really good news and better than the alternative which was literally nothing. I just worry that this is, again, like sticking a plaster over an arrow wound and giving us all a sticker for being brave. Restrictions are still in place, curfews have been introduced, people are still not back to work and jobs are being lost en masse. Let’s hope that these new measures will be enough to keep our heads above water for now.

Free New Job Support Scheme Webinar

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In this webinar, we look at what’s in store for employers over the coming months as the Coronavirus Job Retention Scheme ends and ask key questions: What is the new Job Support Scheme? Can you avail of the Job Retention Bonus? What are the rules in relation to redundancies? Will remote working remain beyond 2020?

This webinar covers:

  • The End of the CJRS
  • NEW: Job Support Scheme
  • The Job Retention Bonus Scheme
  • Redundancies
  • Working Remotely
  • How BrightPay Connect can help

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Aoibheann Byrne
Written by Aoibheann Byrne
BrightPay Payroll Software





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