In the House of Commons on Thursday, Chancellor Rishi Sunak unveiled a more generous package of measures to protect businesses and jobs amid the COVID-19 crisis. Tony McDonough reports
Chancellor Rishi Sunak has unveiled another multi-billion pound package of support for businesses and jobs as the COVID-19 crisis continues.
The new measures inclines a more generous job support scheme (JSS), new cash grants for businesses and a doubling of the self-employed support grant from 20% to 40%. The final measure alone will cost £3.1bn for the three months from November to January.
Addressing the House of Commons, Mr Sunak said the original JSS, that comes into effect on November 1, would have seen employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours.
The latest change reduces the employer contribution to those unworked hours to 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.
Employers will continue to receive the £1,000 job retention bonus. The job support scheme closed for businesses legally required to close remains unchanged.
Mr Sunak said he would now provide cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas.
These grants will be available retrospectively, going back to August, for areas who have already been subject to restrictions, and come on top of higher levels of additional business support for local authorities moving into Tier 3.
Under the scheme local authorities would receive a funding amount that will be the equivalent of:
- For properties with a rateable value of £15,000 or under, grants of £934 per month.
- For properties with a rateable value of between £15,000-£51,000, grants of £1,400 per month.
- For properties with a rateable value of £51,000, grants of £2,100 per month.
For the self-employed the Chancellor originally said the Government would pay 20% of profits in two grants – one covering November to January and the second from February to April. This has now been raised to 40% meaning the maximum grant will increase from £1,875 to £3,750.
Mr Sunak told the House of Commons: “I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today. These changes mean that our support will reach many more people and protect many more jobs.”
Paul Johnson, director of the Institute of Fiscal Studies, said: “This is a very big change to the job support scheme. This changes incentives to keep people on a lot.”
Liverpool City Region Metro Mayor Steve Rotheram, who has been pushing Government for extra support for businesses, questioned the timing of the announcement. He said: “It’s a shame that it took London coming under further measures for the Chancellor to take action to support jobs and businesses.”