The Chancellor, Rishi Sunak has today announced new measures for businesses which are a significant change and which will give businesses and people across the UK certainty over winter months.

THE JOB RETENTION SCHEME (KNOWN AS THE FURLOUGH SCHEME) WILL NOW BE EXTENDED UNTIL THE END OF MARCH – PROTECTING MILLIONS OF JOBS ACROSS ALL NATIONS

Workers across the United Kingdom will benefit from increased support with a five-month extension of the furlough scheme into spring 2021, the Chancellor announced today, 5^th November.  Employees will receive 80% of their current salary for hours not worked.

There are currently no employer contribution to wages for hours not worked.  Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked.  For an average claim, this accounts for just 5% of total employment costs or £70 per employee per month. This extension will be reviewed in January 2021.

NEW EXCLUSIONS:

• The Jobs Retention Bonus (JRB) will not be paid in February and the government will redeploy a retention incentive at the appropriate time. The purpose of the JRB was to encourage employers to keep people in work until the end of January. However, as the Furlough Scheme is being extended to the end of March 2021, the policy intent of the JRB falls away.
• The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the Furlough Scheme ends.

REDUNDANCIES:

Companies who made staff redundant now have the opportunity to bring back redundant employees and re-Furlough them.  This applies to employees who were made redundant after the 23^rd September 2020.  This could put some businesses into a better situation if they can be fully operational in the spring of 2021, by having employees available.

THE GOVERNMENT ALSO ANNOUNCED:

• cash grants of up to £3,000 per month for businesses which are closed worth more than £1 billion every month
• £1.1 billion is being given to Local Authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly
• plans to extend existing government-backed loan schemes and the Future Fund to the end of January, and an ability to top-up Bounce Back Loans
• an extension to the mortgage payment holiday for homeowners
• up to £500 million of funding for councils to support the local public health response.
• Support for millions more workers through the Self-Employment Income Support Scheme (SEISS) will be increased, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
• The next self-employed income support grant will also increase from 55% to 80% of average profits – up to £7,500

FURTHER INFORMATION:

• More information on today’s policy announcements can be found here: economic support factsheet(PDF, 143KB, 5 pages).