Government reveals new initiatives to support businesses through pandemic

The government will top up the wages of people who have been unable to return to the workplace full time, giving struggling businesses the option of keeping employees in a job on shorter hours rather than making them redundant. The Jobs Support Scheme, which replaces the furlough scheme, will run for six months starting in November.

Sunak said: “The Jobs Support Scheme is built on three principles. First, it will support viable jobs. To make sure of that, employees must work at least a third of their normal hours and be paid for that work, as normal, by their employer. The government, together with employers, will then increase those people’s wages covering two-thirds of the pay they have lost by reducing their working hours.

“Second, we will target support at firms who need it the most. All small- and medium-sized businesses are eligible. But larger businesses, only when their turnover has fallen through the crisis.

“Third, it will be open to employers across the United Kingdom, even if they have not previously used the furlough scheme.”

A “pay as you grow” scheme was also announced for businesses, enabling them to extend their bounce back loans from six to 10 years, reducing their payments.

In addition, the government guarantee on Coronavirus Business Interruption Loans will be extended to 10 years and a new successor loan guarantee programme will be announced in January.

In response, Tom Ironside, director of business and regulation at the British Retail Consortium, said: “We welcome the chancellor’s Job Support Scheme, which will help reduce job losses for eligible companies. Furthermore, the VAT reduction for cafes and food-to-go will be welcomed as many continue to suffer as a result of low footfall and the government’s ‘work from home if possible’ guidance. We look forward to seeing the details of the additional flexibilities on loans and tax deferrals that have been announced.

“Retail is on a delicate path to recovery, but the looming threat to this remains the £8bn business rates cliff-edge from April 2021. Retailers need certainty and the chancellor must take action and bring down the business rates burden in order to avoid unnecessary job losses and shop closures.”

Retail NI chief executive, Glyn Roberts, added: “This is an unprecedented and welcome intervention in the labour market at a critical time for our economy. The chancellor has adopted the right approach in targeting support to those businesses and employees who continue to struggle with this pandemic.

“With many independent retailers facing huge difficulties the Job Support Scheme and other measures in this statement will give them greater certainty for the next six months.”