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Chancellor Rishi Sunak has revealed a successor to the licensing plan while bidding to avoid a winter jobs crisis following tighter restrictions to combat the coronavirus.
Wage subsidies are part of a package of new measures to support the economy in the last phase of the COVID-19 pandemic – with the aim of increasing the salary of people who work at least a third of their normal hours in a “viable” job.
The chancellor told the deputies that the Labor Support Plan would cover two thirds of the salary they have lost, and the employer would pay the bill for the hours worked.
Your key announcements:
- The Employment Support Plan will begin in November and will last for six months.
- Expansion of the income support scheme for self-employment
- A “pay as you grow” extension of the recovery loan program will give businesses 10 years to repay
- VAT reduction to 5% for hotels and tourism extended until the end of March.
Sunak was forced to act amid widespread warnings that further restrictions on business activity this week to combat the disease, which could last six months, would trigger waves of layoffs as the current Job Retention Plan is canceled.
That has already cost the taxpayer nearly £ 40bn to date, while Treasury-backed business loans of £ 57bn have been made.
The chancellor said: “The government will directly support the wages of working people, giving companies facing depressed demand the option of keeping employees in a job for shorter hours rather than firing them.”
He explained that the Employment Support Plan was open to any company, although larger companies could only access it if they could demonstrate a drop in turnover.
It also confirmed that companies that retain unlicensed staff for shorter hours could claim both the Work Support Program and the previously announced job retention bonus, a £ 1,000 reward paid to companies for each employee who returns to work.
