Sunak announces furlough scheme replacement. Is it any good?
After he served up this little howler – and pushed up Covid-19 infections massively, Rishi Sunak needs to make a good impression with his plan to replace the furlough scheme for jobs affected by Covid-19. Has he managed it?
Tory Chancellor Rishi Sunak has announced a new “job support scheme” to replace the “furlough” programme he has been running since lockdown began in March.
This new scheme will run for another six months until the end of April 2021.
What is it?
Rishi Sunak announces a new "Jobs Support Scheme"
The gov't will directly support the wages of people in work.
It will support viable jobs – employees must work at least a 3rd of their normal hours – gov't will cover 2/3 of pay.
All SME's eligible and will run for 6 months. pic.twitter.com/P4NKm9GVOf
— Lee Harris (@addicted2newz) September 24, 2020
A six-month scheme starting on November 1.
To be eligible, employees must work a minimum of 33 per cent of their normal hours.
For the remaining hours not worked, the government and employer pay one-third of the wages each.
So employees working 33 per cent of their hours will receive at least 77 per cent of their pay.
Where will employers get the extra money?
According to BBC News:
Sunak announced a “pay as you grow” scheme for businesses which took government guaranteed loans during the crisis.
“Loans can now be extended from six to ten years nearly halving the average monthly repayment,” he said.
They can also move to interest only payments or suspend payments if they are “in real trouble” for up to six months.
He said no credit rating will be affected.
Coronavirus Business Interruption Loans will also be extended for up to 10 years.
There will also be a new loan scheme in January, the chancellor says.
He is also extending the scheme for self-employment on “similar terms” to the existing job support scheme.
The scheme is mainly for small and medium-sized firms. Only large firms that can prove they have been harmed by Covid will be eligible for the Job Support Scheme.
What about VAT?
2/ Any of the millions of self-assessed income taxpayers who need extra help, can also now extend their outstanding tax bill over 12 months from January.
— HM Treasury (@hmtreasury) September 24, 2020
Sunak is also cancelling the planned increase of VAT from five per cent to 20 per cent, which was due to come into effect in January.
Instead, the lower rate of five per cent will remain until 31 March next year.
Viable jobs?
Sunak said the new scheme is intended to support “viable” jobs only – and that should ring alarm bells:
Rishi Sunak talking about “viable jobs” but the truth is that while covid-19 restrictions in place we can’t tell what’s viable.
— Faiza Shaheen (@faizashaheen) September 24, 2020
Good that business can defer debt repayments and tax, but that’s a lot of debt that will be hung over to 2021/22 which will depress investment. The chancellor will need a plan for this
— Faiza Shaheen (@faizashaheen) September 24, 2020
Great point from @AnnelieseDodds about training and skills.
Rishi Sunak seems to be divorcing short term measures to longer term change – a Chancellor with foresight would use this time to create stepping stones for people to get into jobs when economy doing better— Faiza Shaheen (@faizashaheen) September 24, 2020
Rishi Sunak didn’t even call the relevant people in the devolved nations to tell them the budget was cancelled. That is poor, and says a lot about how much this government thinks about and respects those running other parts of the nation
— Faiza Shaheen (@faizashaheen) September 24, 2020
Of course – Tories being Tories – certain extremely rich people are enjoying the continuation of their own subsidies at the same level:
As Rishi Sunak tells workers they’ll have to forego a third of their income, the government promises the Queen she won’t lose a penny. https://t.co/CBnYC8vw0R
— Lester Holloway (@LesterJHolloway) September 24, 2020
Have YOU donated to my crowdfunding appeal, raising funds to fight false libel claims by TV celebrities who should know better? These court cases cost a lot of money so every penny will help ensure that wealth doesn’t beat justice.
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