The government’s Job Support Scheme (JSS) will be expanded to protect jobs and support businesses required to close their doors as a result of coronavirus restrictions, the Chancellor announced on Friday.
Under the expansion, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work – protecting jobs and enabling businesses to reopen quickly once restrictions are lifted.
The government will support eligible businesses by paying two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
Chancellor of the Exchequer, Rishi Sunak, said: “Throughout the crisis the driving force of our economic policy has not changed. I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves. The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.”
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions, a very small proportion of overall employment costs. It is estimated that around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
The scheme will begin on 1 November and will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via a HMRC claims service that will be available from early December. Employees of firms that have been legally closed in the period before 1 November are eligible for the CJRS.
The scheme is UK wide and the UK Government will work with the devolved administrations to ensure the scheme operates effectively across all four nations.
This comes alongside intensive engagement with local leaders today on potential measures are coming in their areas.
In addition to expansion of the JSS, the government is increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs. These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously. This could benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs, bowling alleys and many more.
The devolved administrations in Scotland, Wales and Northern Ireland will benefit from a £1.3 billion increase to their guaranteed funding for 2020-21 – allowing them to continue their response to Covid-19 including through similar measures if they wish.
These measures will sit alongside the original JSS – which is designed to support businesses that are facing low demand over the winter months – and the £1,000 Job Retention Bonus (JRB) which encourages employers to keep staff on payroll.
They build on the government’s wider package of unprecedented measures to help protect, create and support jobs through the pandemic, to ensure that nobody is left without hope or opportunity.
Joss Croft, CEO, UKinbound said “Once again the Chancellor has ignored the fact that inbound tourism businesses, that deliver £28 billion in export earnings for the UK every year, are on their knees, unable to fund viable jobs as they’ve been excluded from virtually all Government support channels since March. Government has already stopped businesses trading due to measures such as quarantine and previous lockdowns, and it therefore needs to compensate all affected companies, not just those facing these new measures or with an obvious shop front.”
Rustom Tata, Chairman of city law firm DMH Stallard and head of the firm’s employment group, said: “The Chancellor’s announcement of support for those businesses ordered or required to close was very light on detail. The reference to two thirds of wages being paid, will of course again be subject to limits, and there will presumably also be qualifying conditions around when the individual worker needs to have started working for the employer. The further support has been described as an ‘expansion of the JSS’, but we still don’t have the real detail about how the successor to the furlough scheme is to operate. With only three weeks to go, many employers and their staff in across all sectors of the economy will be concerned about the potential for further redundancies.
“Politically, the announcement appears to help clear the way for a likely increase in the number of regional lockdowns ordered. We await detail as to precisely which businesses will be ordered to close. As the First Minister in Scotland has found, describing that clearly isn’t a piece of cake.”
Dame Carolyn Fairbairn, CBI, said: “The steep rise in infections in some areas means new restrictions to curb numbers feel unavoidable. The Chancellor’s more generous job support for those under strict restrictions should cushion the blow for the most affected and keep more people in work. But many firms, including pubs and restaurants, will still be hugely disappointed if they have to close their doors again after doing so much to keep customers and staff safe. In addition to financial support, continual transparency around decision-making is crucial. A consistent and open strategy for living with COVID-19 through the autumn and winter will help protect lives and livelihoods.”