The Chancellor Rishi Sunak has announced details of a New Jobs Support Scheme, along with a series of other measures designed to help businesses as the Covid-19 pandemic continues.
He spoke about the economy undergoing a permanent adjustment, with a need to adapt and evolve to a new reality.
While earlier in the year he delivered an emergency short-term response to the crisis, what follows today appears to be part of the long-term plan.
Sunak admitted that he cannot save every business and every job, with many businesses facing uncertainty and reduced demand.
But, he is keen to protect viable jobs. The New Jobs Support Scheme is designed to support those viable jobs.
It works on the basis of shorter hours but keeping people in their jobs.
For viable jobs, people will need to work at least a third of their usual hours, with the government and employer picking up the tab for the balance of hours not worked.
It means employees who work 33% of their hours will receive 77% of their pay, with the government and employer paying half each of the balance.
The New Jobs Support Scheme will last for six months, starting on 1st November, and will be open to all small and medium-sized businesses. The scheme will also be open to larger businesses who have experienced a drop in turnover.
Businesses who did not take advantage of the earlier Coronavirus Jobs Retention Scheme will also be eligible for the New Jobs Support Scheme.
Hinting at another round of support for the self-employed, Sunak said he would be extending their scheme on similar terms.
He also announced measures designed to help businesses with their cash flow over the winter months.
The bounce-back loan scheme will see a ‘pay as you grow’ extension lasting six to 10 years, giving businesses more time to repay their debt.
Businesses who are struggling with cash flow will be able to defer payments or pay interest only for up to six months, with no impact on their credit rating.
There are changes to the other government-backed loan schemes too, with government backing extended for up to 10 years.
A new loan scheme will be launched in January, after applications for the existing schemes end on 31st December.
Businesses will be able to spread their VAT payments over 11 months, and taxpayers will be able to defer their self-assessment tax bill in January for up to 12 months.
There was good news for the hospitality and tourism sectors, where the VAT reduction from 20% to 5% will be extended until 31st March; it was originally due to end on 13th January 2021.
Rishi Sunak has clear that our lives can no longer be placed on hold. He spoke about a collective responsibility shared by all to live with the coronavirus, but live without fear.
