‘New furlough’: Workers to get two thirds of wages paid if their business is forced to shut, says Rishi Sunak
WORKERS in lockdown areas where businesses are forced to shut will get two thirds of their wages paid for in a new furlough-style scheme, it was announced today.
Chancellor Rishi Sunak set out measures of his new economic package, offering a new furlough programme in all but name, for firms that are ordered to close.
Read our coronavirus live blog for the latest news & updates
Rishi Sunak has revealed more help for businesses if they need to close[/caption]
Pubs in Scotland forced to shut will be able to get extra help with wages[/caption]
It’s a sign that in the coming days the Government will force businesses to close.
Ministers are expected to outline a three-tier local lockdown system on Monday, which could see hospitality venues in coronavirus hotspots being temporarily shut.
The Treasury admitted today the new programme would run into the billions of pounds over the next six months as it prepares to continue propping up firms to try and save thousands of jobs.
The new scheme – which will kick in when the current Job Retention Scheme closes at the end of the month – will be eligible to firms who have been on the payroll on 23 December and are told to close.
Workers will be able to get their wages partially paid for up to six months, and it will be reviewed in January, today.
On the new programme, people will have to be off work for at least a week.
The Government will pay two thirds of wages – it’s unclear whether employers will top them up.
Critics said it was essentially a u-turn back to the furlough programme but only for some sectors – rather than a move to wean businesses off state support.
It came as:
- Shadow Chancellor Annelise Dodds blasted the Chancellor for waiting until “the last possible minute” to lay out more help
- Ministers admitted coronavirus was “out of control” again and measures were needed to bring numbers down
- The UK economy grew by 2.1% in August thanks to Eat Out to Help Out but the recovery was less than half predicted
- Nottingham has the highest coronavirus rate in the country with more than 600 cases per 100,000, but still has no local restrictions in place
- Vulnerable Brits face months inside under new plans to bring back shielding
- Coronavirus infections doubled in a week, the latest ONS study showed
- Face masks in offices were being “considered”, a minister said
Businesses will be able to get up to £3,000 a month in help, which is paid in arrears every two weeks.
But for smaller businesses, they will be able to claim £1,300 a month – less than the £1,500 they can get at the moment.
And the scheme will open to places that are already still forced to close – like nightclubs which haven’t been allowed to reopen.
It will be a part of the new Jobs Support Scheme where employers can get 22 per cent Government help to pay wages if employees are only working part-time at the moment due to reduced demand.
Rishi Sunak, said today: “I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.
“The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.”
It’s likely to cost billions over the next six months, adding more onto Britain’s ballooning coronavirus bill.
A Treasury source said: “Obviously costings will depend on how things develop – across different sectors and areas of the country.
“But under most scenarios we’re looking at hundreds of millions a month.”
SAFETY NET FOR WINTER
In a pooled clip to the media he denied that it was just a rebranded furlough scheme, which he said he wouldn’t extend, arguing it was “fundamentally wrong” to hold people in jobs that weren’t viable.
He said: “This is not a universal approach, this is an expansion of the Jobs Support Scheme specifically for those people who are in businesses that will be formally or legally asked to close so in that sense it’s very different.
“I hope this provides reassurance and a safety net for people and businesses in advance of what may be a difficult winter.”
But the Resolution Foundation’s Torsten Bell said: “With infections rising sharply, the Chancellor is right to have brought back a targeted version of the furlough scheme to pave the way for further lockdown restrictions, both local and national, in the weeks to come.
“It will particularly benefit the hospitality and leisure sectors that are most likely to be required to close.”
He said it had been clear for some time now that a local furlough scheme was needed, but the delay will come at “a high price in jobs lost”.
Manchester, Liverpool and Newcastle are expected to see businesses close next week[/caption]
It’s the latest of several statements the Chancellor has had to make to support jobs and workers since the pandemic began.
He’s pumped in £210billion to the furlough scheme already in the seven months it’s been running.
MPs reacting to the announcement said the help was welcome, but the numbers didn’t add up.
Labour’s Lucy Powell said: “Welcome that Government has accepted principle that businesses forced to close need support, as we’ve been calling for.
“But that principle needs making a reality by the numbers adding up. They still don’t unfortunately. And many businesses still closed from 1st time with nothing.”
But Tory MPs rallied around to defend the latest help, denying it was a “u-turn” and return the old furlough.
Minister Brandon Lewis said: “Very pleased that the UK Govt is able to extend this support – it will be particularly valuable for people & businesses in Northern Ireland.
“We have always said we do whatever we can to support jobs and livelihoods across all four nations and that is exactly what we are doing.”
What is the new expansion of the Jobs Support Scheme?
- Two thirds of wages for businesses ordered to shut
- Will pay up to £2,100 a month rather than the previous £2,500 a month
- Have to be on payroll by September 23
- If already on the Job Retention Scheme, you can carry it over from the start of next month
- Employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions
Most read in Politics