Chancellor Rishi Sunak pledged to provide billions of pounds of additional support to jobs and workers as the UK faces a harsh economic winter
Last week, the government implemented a three-tier system to prevent the spread of coronavirus with a spike in the number of reported cases. However, several businesses are fearing their livelihoods as firms bear the cost. Now, Chancellor Rishi Sunak has announced increased support for jobs and workers hit by the new restrictions after growing concerns from businesses in tier two areas.
The Job Support Scheme (JSS), which will replace furlough in November, is set to undergo mass changes as businesses face profound economic uncertainty, the chancellor said. Under the revised scheme, employers will pay less and staff will be able to work fewer hours with taxpayer subsidy doubled. The major revamp to the JSS, announced only one month after it was first unveiled, aims to provide far more generous state subsidies for jobs where businesses cannot afford to have their staff work full time during the coronavirus pandemic. I know that the introduction of further restrictions has left many people worried for themselves, their families and communities, Mr Sunak told the House of Commons. I hope the government’s stepped-up support can be part of the country pulling together in the coming months.
This comes after companies in tier two areas demanded more support amid the increased restrictions which have drastically affected their businesses. Many of these businesses, such as restaurants and eateries, said they would be better off with tier three restrictions. In response, Mr Sunak declared: “It is clear that they require further economic support.”
Under the new changes, employers will pay for a minimum of 20% usual hours worked and 5% of hours not worked. The government will now fund 62% of wages for hours not worked, doubling the maximum payment to £1,541.75 a month. The scheme, which is available across the UK, will be open to small and larger businesses that have their revenues impacted because of the coronavirus restrictions.
Employers have commended the government’s support to businesses during this difficult time, giving companies the added flexibility and reassurance during these difficult times. Commenting on the new changes, Philip Richardson, partner and head of employment law at Stephensons Solicitors, said: This latest intervention from the Government will be broadly welcomed by many businesses who were concerned about the affordability of keeping staff members on and provides extra reassurance to employees, particularly those working one or two days a week. Of course, what remains to be seen is the impact of the current furlough arrangements ending on October 31st. That will be the real litmus test to see whether the various support packages announced by the government will prevent a surge in redundancies this November.
Nigel Morris, employment tax director at MHA MacIntyre Hudson, praised the Treasury for the extra help to businesses but expressed concerns over firms who have seen a steady turnover, as the scheme will disadvantage larger businesses who had decent recovery over the summer months.
Today’s announcement of additional support for businesses crippled by Tier 2 lockdowns shows the genuine desire of the government to aid businesses, he said. However, a persistent issue dogging all these measures is the need to continually change and update them. Businesses had just got their heads round the new JSS scheme and now further layers of complexity have been created. We could be heading towards a situation where we see dozens more revisions over the next six months. The result will be a backlog of errors and over-claiming that embroils companies who don’t adapt to rule changes fast enough.
A second problem is that large firms affected by Tier 2 lockdowns will still need to show they’ve seen decreasing turnover to access the latest JSS support. This will disadvantage large firms who have had a decent recovery over the Summer, but are now in Tier 2 lockdowns and running into difficulties as Winter sets in.
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