Rishi Sunak has today (24 September) outlined 'radical interventions' that will support workers on reduced hours and extend the reduced 5% VAT cut until 31 March 2021
The Chancellor laid out plans that he believes give reason for workers to be 'cautiously optimistic' amid the current coronavirus pandemic.
Talking in parliament today, he outlined two specific announcements that he claims will help save jobs and businesses, including those in the hospitality sector, over the winter period.
'I've been developing plans to protect jobs over the winter period,' he explained to the house. 'For at least the next six months the virus and restrictions are going to be a fact of our lives. Our economy is now more likely to undergo a... permanent adjustment.'
The announcement comes in the wake of the recent 10pm curfew imposed on businesses, as well as the impending end of the furlough scheme, of which Sunak claimed 'there has been no harder choice'.
The new measure specific to hospitality are:
- A new Jobs Support Scheme: This will support the wages of people in work, giving businesses who face depressed demand the chance to keep employees in work on shorter hours. Employees must work at least one-third of their normal hours, which will have to be paid by their employers. The government and the employer will then cover one-third each of the hours not worked, and employees will keep their jobs. It will be open to employers who both have and have not used the furlough scheme and will be in place for six months starting in November.
- 5% VAT cut extended: The original date of VAT returning to normal was 12 January 2021, but the Chancellor has now extended it until 31 March 2021.
Sunak also announced plans for a Pay-As-You-Grow scheme, which will see bounceback loans for businesses extended from six to 10 years, while business interruption loans will also be extended to 10 years.