Chancellor announces updated support measures
Rishi Sunak has announced that the government will increase its winter support scheme in a bid to protect jobs and help contain Covid-19. The chancellor is increasing support through the existing Job Support and self-employed schemes, and expanding business grants to support companies in high-alert level areas.
Job Support Scheme
When originally announced, the Job Support Scheme (JSS) – which will come into effect on 1st November – saw employers paying a third of their employees’ wages for hours not worked, and required employees to be working 33% of their normal hours. The recent announcement reduces the employer contribution to those unworked hours to 5% and reduces the minimum hours requirements to 20%, so those working one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer £44.
The government will provide up to 61.67% of wages for hours not worked, up to £1,541.75 per month. The cap is set above median earnings for employees in August at a reference salary of £3,125 per month. Employers will continue to receive the £1,000 Job Retention Bonus. The JSS Closed for businesses legally required to close remains unchanged.
The chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector which may be adversely impacted by the restrictions in high-alert level areas. These grants will be available retrospectively for areas who have already been subject to restrictions, and come on top of higher levels of additional business support for Local Authorities moving into tier three.
The government has increased the amount of profits covered by the two forthcoming self-employed grants from 20% to 40%, meaning the maximum grant will increase from £1,875 to £3,750.
“This is a hugely generous package of support and very welcome news just when we needed it,” said UKHospitality chief executive Kate Nicholls. “The changes to the Job Support Scheme will help to safeguard hundreds of thousands of jobs and the grant support will provide a crucial lifeline for businesses struggling with low footfall and ongoing costs. It is excellent that the grant has been backdated to when the restrictions began to bite.
“This gives businesses a much-enhanced chance of being able to overcome the challenges and survive into 2021, so they can begin to recover next year and play a vital role in helping boost the economy. It is encouraging to see the government listening to and understanding the plight of hospitality, which is dire. It is important now that grants are processed as quickly as possible, as businesses are on the brink after weeks of curfew and severe restrictions.
“There is still a long way to go and we will be in close contact with the government to make sure that our members, and the whole of hospitality, gets the support it needs and deserves. This is a significant step forward for us, though, and a hugely valuable lifeline for businesses to stay afloat and keep as many staff as possible in their jobs.”