The Chancellor, Rishi Sunak, has today (September 24) confirmed that a new Jobs Support Scheme will be implemented when the current furlough scheme ends at the end of October.
The Chancellor said that the furlough scheme was the “right policy at the time we introduced it”, but that it would be “fundamentally wrong to hold people in jobs that only exist inside the furlough”.
Mr Sunak says he wants to create new opportunities and allow the economy to move forward.
The new Jobs Support Scheme will allow employers to keep employees in a job on short hours rather than making them redundant.
He also confirmed that the self-employed grant would also be extended.
The Chancellor stated that 2.6 million self-employed small businesses have been helped during the pandemic so far and that he is extending the self-employed grant on similar terms and conditions as the new job support scheme.
He added that the policies he announced today have “never tried in this country before”.
Mr Sunak told MPs that he has been developing plans to “for months ensure the government is able to manage the virus” while “protecting the jobs and livelihoods of millions”.
The Chancellor said he recognised that people are “anxious” at the prospect of further restrictions, but says there are also “reasons to be cautiously optimistic”.
The Chancellor confirmed that the way the government has been trying to protect jobs must “evolve”, but the overall aim will remain the same.
He also confirmed that restrictions will become a fact of life for “at least” the next six months, with the economy set to “undergo a more permanent adjustment”.
Loan deadlines have also been pushed back to give small businesses more time and flexibility. The Chancellor says he is instead introducing a “pay as you grow”, so loans can be extended from six to ten years.
This will nearly halve the average monthly repayment.
Struggling firms can make interest-only repayments and anyone can apply to suspend repayments for up to six months. Mr Sunak also vowed that no companies would see their credit ratings affected.
Business interruption loans will also have their government guarantee extended to ten years.
And the extending deadline of all loan schemes will be pushed back until the end of 2020.
A new successor loan guarantee programme will also be rolled out in January 2021.
The 5% rate of VAT will remain in place for hospitality and tourism until the end of March 2021 and won’t go back up to 20% in January.
Mr Sunak says today’s measures are an “important evolution in our approach” to COVID-19.
The Chancellor also said ministers have “done much” to mitigate the trade-offs between health, the economy and employment.
Mr Sunak says there is no “risk free solution” when it comes to balance health and the economy.
The chancellor ended his speech by saying that when it comes to coronavirus, “it’s on all of us and we must learn to live with it and live without fear.”