Govt expands business support and overhauls job scheme

Govt expands business support and overhauls job scheme

Chancellor Rishi Sunak has introduced further grants and lowered the contributions employers must make under the government's coronavirus Job Support Scheme as part of a new round of economic support.

Speaking to the House of Commons today (October 22) Mr Sunak said he would help "open but struggling businesses" operating in areas under tier 1 and 2 coronavirus restrictions, and pledged to increase the government's financial support to employers forced to close in tier 3 areas. 

He extended the Jobs Support Scheme to include businesses which can open but have witnessed a fall in demand, by lowering the required hours employees have to work to qualify for the support down from 33 per cent of normal hours to 20 per cent. 

The chancellor also revealed a dramatic cut in the level of employer contributions under the scheme. Businesses are now expected to cover just 5 per cent of employee hours not worked, rather than the 33 per cent initially announced last month. 

The support scheme will apply to eligible businesses in all tier levels. 

Mr Sunak said: "These changes mean more employers can access the scheme and more jobs will be protected.

"We have made this the most generous versions of a short-time work scheme anywhere in the world. It is better for businesses, better for jobs and better for the economy."  

The Chancellor also introduced a new grant scheme for businesses impacted by a drop in demand, even if they are not legally required to close. He said funding would be available to pay every hospitality, leisure and accommodation business in tier 2 areas up to £2,100 for each month the restrictions apply. 

The grants will be paid to local authorities in these areas, which will then be expected to distribute the funds amongst local business. They will be backdated to August for areas under enhanced restrictions since that date.

The government had announced its Job Support Scheme in September to replace the Coronavirus Job Retention Scheme, which after a number of extensions is set to end at the end of this month. 

Prior to today the Job Support Scheme was intended to offer two levels of financial support.

It covered funds for employees working part-time as a result of coronavirus restrictions in tier 1 and 2 areas and those businesses forced to close completely in tier 3 areas. 

In September Mr Sunak confirmed the scheme would be open to employees who work at least a third of their normal hours and initially required businesses to contribute 55 per cent of wages to qualify for the government's 22 per cent top up. 

Earlier this month he enhanced the scheme to include businesses legally forced to close as a result of coronavirus restrictions, in tier 3 areas, over the next six months. 

In these areas employers are only required to cover the cost of NICS and pension contributions with no obligation to contribute towards wages under the scheme. 

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