By Elishya Perera
London (CWBN)_Chancellor Rishi Sunak announced that employees who work for firms which would be forced to shut down due to COVID-19 restrictions will be paid two thirds of their wages by the government. Starting 1st November, the scheme will be available for six months, with a review in January.
“We are pleased that the government has listened and recognised that any new system of restrictions must come with a substantial package of financial support,” mayors of Liverpool, North Tyne, Sheffield and Greater Manchester said in a statement.
The expansion of the scheme was announced just two weeks after Sunak announced his winter economy plan in September.
Winter Economy Plan
The Winter Economy Plan was announced last month, outlining the government support measures for business and employees through the uncertain months ahead, as UK continued to battle the pandemic. Starting 1st November, the scheme targeted businesses that are facing lower demand over the winter months due to Coronavirus. Accordingly, the firms were expected to pay the employees for the hours worked, while the burden of the hours not worked will be split between the government, employer, and employee.
Delivering a speech in Parliament, Sunak announced the support measures on 24th September. However, two weeks later, with the prime minister set to make a statement to MPs on Monday (12th October), giving details of new restrictions, the Chancellor announced an expansion of the scheme to protect firms and workers who are forced to shut down during Coronavirus lockdowns this winter.
Job support scheme
Under the expanded scheme, the government will support eligible businesses by paying 67% of wages up to a maximum of £2,100 a month. However, firms must still pay workers’ national insurance and pension contributions. The scheme will apply UK-wide. It is also noteworthy that the scheme does not require any contribution from employers, as opposed to the Coronavirus job retention scheme, commonly known as the furlough scheme, which is due to close at the end of October. Under the furlough scheme, the government made a 60% contribution for employee wages, while a 20% contribution was made by the employer.
Who is eligible?
The scheme will apply to businesses whose premises are legally required to shut down, as part of a local or national government COVID restrictions, including businesses that are forced to close their premises, but continue to provide only delivery and collection services. However, businesses that choose to shut because of the broader impact of COVID restrictions and businesses such as a restaurant’s suppliers that lose work as a result of places like these closing would not be entitled for the scheme.
In order to be eligible, the employee must be off work for a minimum of seven consecutive days, and must have been on the firm’s payroll since at least 23 September. They can be moved on and off the scheme, or work different hours. However, each working arrangement must cover at least seven days. Workers cannot be made redundant or put on notice while a Jobs Support Scheme grant is being claimed on their behalf.
In addition, businesses forced to close in England will also be entitled to increased business grants, with up to £3,000 a month paid every fortnight.
Details on new restrictions expected on Monday
Meanwhile, Prime Minister Boris Johnson is expected to make a statement to MPs tomorrow (12th October), giving details of the new restrictions that are to be implemented. Accordingly, pubs and restaurants could be closed in parts of northern England and the Midlands, where some of the highest numbers of cases are occurring.
Downing Street’s chief strategic adviser Sir Edward Lister said that the restrictions that are to be implemented “present difficult choices. We must seek to strike the right balance between driving down transmission, and safeguarding our economy and society from the worst impact”.
According to deputy director of Public Health England’s national infection service, the number of cases has been rising all over the country, but more quickly in the North East, North West and Yorkshire and Humber, as opposed to the South.
