The chancellor announces the “winter economy plan” to replace the job retention scheme (JRS), which was introduced in March and covered 80% of the wages of temporarily laid-off workers. Commonly known as the furlough scheme, at one point the JRS supported more than 9 million employees.
Rishi Sunak says it will be replaced by a German-style wage subsidy programme to cover two-thirds of wages for staff working shorter than usual hours. Known as the job support scheme (JSS), it offers to cover 33% of pay and employers would contribute 33%. It was designed to replace the JRS from 1 November.
Sunak also announced an extension in the self-employed income support scheme (Seiss), offering to cover 20% of average monthly profits between November and January.
Sunak announces additional support for businesses forced to close their doors. The furlough replacement becomes a two-pronged system: JSS: open and JSS: closed. The latter is designed to pay 67% of wages without employer contributions. Bigger cash grants are also announced for businesses required to close.
Sunak is again forced to tweak his plan. Amid rising pressure from rebellious northern Tory MPs and a rapidly deteriorating economic outlook, the chancellor drastically cuts the level of employer contribution on the JSS: Open to 5%, from 33% previously.
He also launches new grants scheme for businesses hit by local lockdowns, with cheques worth up to £3,000 a month made available. He also doubles the level of support on Seiss to 40% of trading profits.
Boris Johnson’s decision to launch a four-week lockdown in England comes with an extension of furlough UK-wide to cover the period. It is announced just five hours before furlough is due to end.
Sunak moves to give self-employed workers similar support, doubling the support to 80% of trading profits – the same level as it had been in the first lockdown. He also extends the deadline for state-backed business loans until 31 January.
The chancellor extends the furlough scheme until 31 March, covering 80% of workers’ wages. Support for the self-employed is also increased from November to January to a similar level.