Chancellor Rishi Sunak sets out coronavirus support for workers and firms
The resurgence of coronavirus poses a threat to the UK’s “fragile” economic recovery, Rishi Sunak warned as he confirmed plans for the state to top up the wages of workers forced to cut their hours due to the pandemic.
As part of a package of measures the British chancellor said the new jobs support scheme was aimed at protecting “viable” roles rather than all posts which have been kept going as a result of state support under the furlough programme.
Under the terms of the new Job Support Scheme, the British government will top up the wages of people working at least a third of their normal hours.
They will be paid for that work as normal, with the state and employers then increasing those wages to cover two-thirds of the pay they have lost by working reduced hours.
It will be open to employees across the UK, even if they were not in the furlough scheme.
The new scheme is more generous than expected but it is less expensive than the £39bn "job retention scheme" that ends on October 31 and which paid 80 per cent of wages of those placed on furlough.
The new scheme will not help those who are currently not employed.
Important clarification on Job Support Scheme: Employees need to work min 1/3 normal hours. For remaining hours NOT worked - UKG and the employer each pay 1/3 – so EMPLOYER pays 55% pic.twitter.com/B3c8uozyfR— Ryan McAleer (@RyanMcAleerbiz) September 24, 2020
Mr Sunak also extended the self-employment income support scheme and 15 per cent VAT cut for the hospitality and tourism sectors. Restaurants, hotels and cinemas will continue to pay VAT at 5 per cent, rather than the usual 20 percent, until March 2021.
There government will also extend the life of four loan schemes, until the end of November and promised a new successor loan scheme from January.
Self-assessed income taxpayers will be allowed to extend their outstanding tax bill over 12 months from January.
This seems to be the key point. It’s not likely to protect those currently on full time furlough but stop the risk of those who are back at work from being made redundant when business declines over the period of a 2nd wave of Covid / lock down this winter. https://t.co/wMVPw0FNzz— Manufacturing NI (@ManufacturingNI) September 24, 2020
Mr Sunak delivered his plans in the House of Commons, but Prime Minsiter Boris Johnson was not there to support him as he was visiting police recruits in Northamptonshire.
Downing Street denied speculation about a rift between at the top of the British government, insisting there was “absolutely not” a problem between Mr Johnson and Mr Sunak.
The chancellor told MPs: “The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery.”
And he acknowledged “we can’t save every business” and “we can’t save every job”.
So person A works a third of their hours— Lewis Goodall (@lewis_goodall) September 24, 2020
Employer pays for that third
For the hours NOT worked
Employer pays a third
Govt pays a third
And govt support is capped at £697.92 a month
So whilst it's still a big intervention it's much less generous than furlough
The British prime minister Boris Johnson said: “What the chancellor is saying today – we’re continuing to do everything we can to support the work force, jobs and livelihoods throughout the crisis and again some very creative and imaginative proposals from the Chancellor.
“But the really important thing is everybody follows the guidance that we set out,” Mr Johnson added.
“That’s why I’m here today in Northamptonshire talking to the police about what they’re doing to underpin, to support the enforcement of those rules. It’s absolutely vital that everybody does that.
“I know that people think it’s a great package of new rules to press the virus but will it be enforced? And my message is – yes it will be, and there will be serious fines for people who don’t comply.”
Any of the millions of self-assessed income taxpayers who need extra help, can also now extend their outstanding tax bill over 12 months from January. pic.twitter.com/8svCScb2uL— Rishi Sunak (@RishiSunak) September 24, 2020
Mr Sunak said people must learn to live with coronavirus and “live without fear”.
He told the Commons: “Today’s measures mark an important evolution in our approach. Our lives can no longer be put on hold. Since May we have taken steps to liberate our economy and society.
“We did these things because life means more than simply existing. We find meaning and hope through our friends and family, through our work and our community.
“People were not wrong for wanting that meaning, for striking towards normality, and nor was the Government wrong to want this for them.
Mr Sunak added: “The truth is the responsibility for defeating coronavirus cannot be held by government alone. It is a collective responsibility shared by all because the cost is paid by all.”
The chancellor added: “We have so often spoke of this virus in terms of lives lost, but the price our country is paying is wider than that.”
To support more than 150,000 businesses and protect 2.4 million jobs through the winter we are for hospitality and tourism.— Rishi Sunak (@RishiSunak) September 24, 2020
We will keep the lower 5% VAT rate until March 31st next year. pic.twitter.com/Fp10pva6OY
He added: “And as we think about the next few weeks and months, we need to bear all of those costs in mind.
“As such, it would be dishonest to say there is now some risk-free solution, or that we can mandate behaviour to such an extent we lose any sense of personal responsibility.
“What was true at the beginning of this crisis remains true now – it is on all of us and we must learn to live with it and live without fear.”