Chancellor Rishi Sunak has announced a new support package to replace the furlough scheme in a battle to stave off mass unemployment during the difficult winter months.
The new “job support scheme” will start in November to replace furlough which ends on October 31.
Furlough has been a safety net to millions during the pandemic but was only temporary as it “wrongly” held workers in jobs that only existed because of the grant, Mr Sunak said.
Instead people should be supported in “viable” jobs and create new jobs that provide genuine security, he added.
Unlike during the Spring lockdown, the vast majority of businesses are open but with reduced demand. The new job support scheme has been created to avoid redundancies for those who are forced to work fewer hours.
What is the job support scheme?
It is designed to prevent employees from being made redundant over the winter months as new restrictions seek to curb the spread of Covid, and will support people who can work but on shorter hours.
Without the scheme it was likely businesses would make some of their staff redundant and keep others full time. Now they can keep employees on part-time, with the Government contributing to wages alongside its £1,000 “job retention bonus” which pays employers to bring people back off furlough.
How will the job support scheme work?
Employees must work at least a third of their normal hours and be paid as normal for what they work.
The Government and the employer will then top up wages for any hours not worked and the employee will have to suffer some loss in income. Employees working 33pc of their hours will receive 77pc of their full-time pay and be able to keep their job, the Chancellor said.
Someone who normally worked 40 hours per week, but now works 14 hours at £10 per hour will get £140 for their work, plus £78 bonus from their employer and £78 from the government for a total of £296. This means they are just £104 short of their usual wage for that week.