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Chancellor Rishi Sunak's job support scheme - everything you need to know
24 September 2020, 14:29 | Updated: 24 September 2020, 16:16
Chancellor Rishi Sunak has announced a raft of new measures in an attempt to save jobs during the latest round of coronavirus restrictions - but what do you need to know?
Mr Sunak was facing growing calls to either replace or extend the furlough scheme which has got the country through the first six months of the Covid-19 pandemic.
But that is due to draw to a close at the end of October, and Britain's economy now needs to be able to survive as the nation deals with the second wave of Covid-19.
On Tuesday, Prime Minister Boris Johnson announced a raft of new measures aimed at curbing the rapidly rising numbers of coronavirus cases, which could last up to six months.
What are the main points of his announcement?
Jobs Support Scheme
The main announcement was the Jobs Support Scheme (JSS) which has been set up to replace the furlough scheme in November.
However, the scheme has attracted criticism that only "viable" jobs will be included in the scheme - meaning those workers who can work at least 33 per cent of their normal hours.
Workers will be paid by their employers for that time.
The employers and the government will then top up their wages by each paying one-third of the pay that the workers will have lost through working less hours.
So ultimately, those working one-third of their hours will receive 77 per cent of their pay.
All small and medium-sized businesses will be eligible for the wage support concept, which starts in November and runs for six months, but larger businesses will have to prove their profits have been hit by the pandemic.
Mr Sunak also said those who are on the JSS will not be able to be made redundant by their employer.
The scheme for those who are self-employed will operate along the same lines.
The Government will only contribute up to one-third of lost wages, meaning both schemes are roughly the same.
VAT cut extended
The temporary reduction of VAT rates from 20 per cent to 5 per cent for the hospitality and tourism sectors will be extended for a further two months, with a new deadline of 31 March 2021.
Business "bounce-back loans" will have a "pay-as-you-grow" element added, giving loanees 10 years rather than six years to repay the money, a move that will slash monthly repayments by almost half, according to the Chancellor.
Those struggling to repay their bounce-back loans will be able to choose to make interest-only payments and "anyone in real trouble" will be permitted to suspend repayments all together for up to six months, said Mr Sunak.
The deadline for taking out a coronavirus business interruption loan will be extended until November 30, with Mr Sunak also increasing the Government guarantee on them for up to 10 years.
Test and Trace gets extra £2 billion
Mr Sunak announced The Treasury will be putting an additional £2 billion into Test and Trace, bringing the current total to £12 billion.
What are the criticisms of today's announcement?
The JSS is certainly not as generous as the furlough scheme was.
At the beginning of the pandemic, the government was paying up to 80 per cent of worker's wages, but the government contribution has now dropped to a maximum of 22 per cent.
The term "viable" jobs has also generated criticism among industries which are not able to go back to work, such as events and arts.
The Institute for Fiscal Studies has warned many could now lose their jobs altogether as the furlough scheme ends.
IFS director Paul Johnson posted online: "This is a v big change from furlough. Less generous. Only open to those who are working a third of normal hours.
"Understandable given need to adapt as economy changes. Can't pay all wages forever. But a lot on furlough now likely to lose their job."