Chancellor reveals plan to save jobs by paying two thirds of lost wages

Rishi Sunak has launched a new initiative to save jobs. Picture: PA Wire/PA Images/Stefan Rousseau

Rishi Sunak has launched a new initiative to save jobs. Picture: PA Wire/PA Images/Stefan Rousseau - Credit: PA

Rishi Sunak has taken to the House of Commons today to set out a new plan to save jobs in the face of a second wave of the coronavirus. The chancellor outlined today that the new job support scheme will provide financial aid to those whose work is at risk.

Employees must work a third of their normal hours, with the government topping up the wages equivalent to two thirds of lost hours.

MORE: Prosecco brunches and curfew menus: Hospitality’s answer to curfew This will only be offered to small and medium-sized businesses, though he said big firms will also be supported if or when their turnover plummets.

The scheme will run from November 6 for six months.

The news will be particularly welcomed by the East’s hospitality sector, which was told this week it would have to close by 10pm under a new national curfew. In addition, he has also extended the self-employed scheme under its current guidelines. On extending the furlough initiative Mr Sunak said it is “fundamentally wrong” to hold people in jobs that only exist inside furlough.

He told the Commons: “The Jobs Support Scheme is built on three principles.

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“First, it will support viable jobs. To make sure of that employees must work at least a third of their normal hours and be paid for that work as normal by their employer. The Government, together with employers, will then increase those people’s wages covering two-thirds of the pay they have lost by reducing their working hours, and the employee will keep their job.

“Second, we will target support at firms who need it the most. All small and medium-sized businesses are eligible but larger businesses only when their turnover has fallen through the crisis.

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“Third, it will be open to employers across the United Kingdom, even if they have not previously used the furlough scheme.

“The scheme will run for six months starting in November and employers retaining furloughed staff on shorter hours can claim both the Jobs Support Scheme and the Jobs Retention bonus.”

He added: “And our plan needs to adapt and evolve in response. Above all, we need to face up to the trade offs and hard choices coronavirus presents and there has been no harder choice than to end the furlough scheme.

“The furlough was the right policy at the time we introduced it, it provided immediate short-term protection for millions of jobs through a period of acute crisis.

“But as the economy re-opens it is fundamentally wrong to hold people in jobs that only exist inside the furlough.”

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