Wage subsidies are part of a package of new measures intended to support the economy during the last phase of the COVID-19[feminine[feminine pandemic – with the sole objective of supplementing the wages of people in “viable” jobs, but forced to reduce their working hours.
The chancellor told MPs that the employment support program would help people working at least a third of their normal hours.
Two-thirds of the wages they lost would be borne by both the taxpayer and the employer, he said.
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Rishi Sunak’s key announcements:
- The employment support program will start in November and will last six months
- Extension of the self-employment income support program
- Bounce Back Loan Program ‘Pay As You Grow’ extension will give businesses 10 years to pay them back
- VAT reduction to 5% for hotels and tourism extended until the end of March.
Mr Sunak was forced to act amid widespread warnings that further restrictions on business activity this week to combat the disease, which are expected to last for six months, would trigger waves of layoffs as the current job retention program would be abolished.
The leave scheme, which winds up at the end of next month, has already cost the taxpayer nearly £ 40bn to date, while Treasury guaranteed business loans of £ 57bn have been granted .
The Chancellor said: “The government will directly support the wages of people at work, giving companies facing depressed demand the opportunity to keep employees in jobs at shorter hours rather than laying them off. ”
Importantly, he added that applicants for the job retention program would not be allowed to issue layoff notices and there would be restrictions on shareholder rewards.
He explained that the program was open to any business, although large companies would only be able to access it if they could demonstrate declining turnover.
He also confirmed that companies that keep staff on leave for shorter hours could claim both the employment support program and the previously announced job retention bonus – a £ 1,000 reward paid to employees. companies for every employee on leave who returns to work.
More details were expected later on the expected cost of the package and the fine print governing the program.
The Chancellor said his plans would ensure support is in place during the crisis’ “more permanent adjustment” to the economy.
But Labor and unions accused him of delaying, arguing that the measures should have gone further while Director of the Institute for Fiscal Studies, Paul Johnson, said via Twitter: ‘A lot of leaves are now at risk of losing their jobs. “
Business groups widely welcomed this statement.
Adam Marshall, managing director of the British Chambers of Commerce, said: “The measures announced by the Chancellor will give businesses and the economy a big boost.
“Chambers of Commerce have consistently called for a new generation of support to help protect livelihoods and ease the cash flow pressures businesses face as they head into a difficult and uncertain winter.
“The Chancellor has responded to our concerns with substantial measures that will help businesses save jobs and navigate in the months to come. ”
Mark Serwotka, general secretary of the PCS union, wanted a complete extension of the initial holiday program.
“The Chancellor’s measures are akin to using a bandage to cover a gaping wound,” he said.