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Rishi Sunak is expected to announce a significant expansion of the license replacement scheme with the government paying a larger share of worker wages to protect companies struggling with Covid-19 restrictions.
Business and industry sources said the chancellor would cut the level of employer contribution that companies must make to receive wage subsidies for their workers in the job support plan (JSS).
In an intervention just over a week before the launch of the JSS, which has replaced the billion-pound license program since early November, the expansion of government funding comes as pressure increases on the chancellor to act. in the middle of the second wave in Covid-19. .
In an attempt to mitigate growing concern over the government’s handling of the pandemic, the chancellor held a “hybrid” briefing with business leaders and unions at a London restaurant, with executives also attending online, early in the morning of Thursday before an economic release from Commons. to update.
Sources at the meeting indicated that the expansion in JSS would likely apply across the country, regardless of whether a company is subject to a higher level of coronavirus restrictions. A reduction in the number of hours an employee must work could also be included.
Under previous plans for the JSS, announced just less than a month ago, an employee must work at least a third of their normal hours to receive state support. Your employer would pay normal wages for those hours.
Of the remaining two-thirds of each worker’s usual salary, the employer will pay 33% and the government will pay 33%, which means that the worker will receive 77% of their usual monthly salary in total. The government will pay 22%, capped at £ 697.72 per month. The employer will pay 55%.
However, the expansion of the scheme is expected to drastically reduce the level of employer contribution, increasing support from the Treasury. The chancellor is also expected to announce an equivalent support package for the self-employed, as well as a further expansion in taxpayer-funded grants for companies struggling to cope with restrictions.
The Treasury declined to comment.
