Rishi Sunak has announced that the UK government will launch a new Jobs Support Scheme that will help businesses to keep people employed through the next six months of increased coronavirus measures.
The Jobs Support Scheme will 'directly support the wages of people in work, giving businesses who face depressed winter demand the option of keeping employees in a job on shorter hours rather than making them redundant'.
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The scheme will only apply to employees who are working at least a third of their normal hours.
This new initiative will last for six months, starting on 1 November when the current furlough scheme ends.
To be eligible for the support, employees must be working for a minimum of 33 percent of their usual hours, and will receive one third of their wages from the hours lost paid by each their employer and the government.
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That means that employees working for 33 percent of their hours will still receive 77 percent of their total pay.
Anyone who is employed as of today will be eligible for the scheme.
The Chancellor of the Exchequer said that while 'the furlough was the right policy to the time we introduced it', new thinking and new strategy is required to match the challenges that present themselves at this stage of the pandemic.
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He continued: "As the economy reopens, it is fundamentally wrong to hold people in jobs that only exist within the furlough.
Sunak admitted: "I cannot save every business, I can't save every job, no chancellor could, but what we must do is deal with the real problems and choices that businesses are facing now."
In addition, Sunak's official account tweeted: "Nearly half a million businesses deferred more than £30 billion of VAT this year.
"Those payments are all due in one lump sum in March. Instead, I'm allowing businesses to spread their VAT bill over 11 repayments, with no interest to pay.
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"This will benefit up to half a million businesses - on average, turning a one off £60k payment in March, into 11 payments of less than £6k."
He also announced: "To give businesses longer to apply for all of our loan schemes, I am extending all the deadlines to the end of the year.
"We are starting work on a new, successor loan programme, set to begin in January."
Businesses are eligible for the new scheme even if they have not previously used furlough.
Featured Image Credit: PA