Winter Economic Plan
On Thursday 24 September, the Chancellor announced the Winter Economy Plan – the next phase of the Government's planned economic response to coronavirus, following the Prime Minister’s address to the nation.
The resurgence of the virus presents a threat to the green shoots of recovery we have seen in recent months. We have cause for cautious optimism. It is now important we protect viable jobs and people's wages, rather than laying employees off through a difficult winter.
The new Jobs Support Scheme directly funds businesses and acts to minimise the strains on companies' cashflows so they can focus their resources on supporting employment. As the Employment Minister, I am clear we are working as hard as we can to support people back into work and protect jobs.
These new measures are on top of the extension of our VAT reduction to Spring 2021, to support the tourism and hospitality businesses, new payment plans to allow companies to defer VAT and tax liabilities for a further year, as well as Pay as You Grow, cutting Bounce Back loan repayments by almost half through extending the loans to ten years.
Job Support Scheme
The new Job Support Scheme will target help for those businesses which need it most: companies which have been impacted by coronavirus, helping them keep staff on reduced hours rather than laying them off and protecting people's wages. The scheme will open on 1st November and runs for six months until April 2021.
Companies will continue to pay employees for time worked, but the burden of hours not worked will be shared equally between the employee, employer and government - one third each. Employees need to be working at least 33% of the time to be eligible for the scheme.
All businesses are eligible, not just those who used the furlough scheme. Larger businesses will only be eligible if their revenue has declined. Furthermore, there will be an expectation large companies using the scheme will be constrained in their ability to make dividend payments or capital distributions to shareholders and employees will not be able to be made redundant or given notice whilst on the scheme.
To ensure parity between employees and self-employed, we will also provide a grant extension for self-employed small businesses who used the existing SEISS scheme. Eligibility criteria will be refined to check whether the self-employed trader is still viable and trading and is suffering lower revenues as a result of coronavirus. The grant will match the average grant of the Job Support Scheme and represents 20% of three-month earnings, for November to January.
Employers can use the Job Support Scheme, as well as claim the Jobs Retention Bonus. Employers now have three options: use the £1,000 Jobs Retention Bonus as a reward for bringing people back off furlough, bring people back on shorter hours and claim the wage subsidy under Job Support Scheme, or they can do both – if they bring back an employee who was on furlough, even on shorter hours, and they are still in post by January, we will help pay their wages during that period and provide a £1,000 bonus.
Supporting People to Find Jobs
Over recent months, I have been working with Ministerial colleagues in the DWP, Treasury and Business Departments on our £2 billion Kickstart Scheme, which will give young people the best possible chance of getting a job. The scheme, which launched last week, will directly pay businesses to create new, decent and high-quality jobs for 16-24 year olds at risk of long-term unemployment. Funding for each job will cover 100 per cent of the National Minimum Wage for 25 hours a week, for six months in total, plus an admin fee – for a grant of around £6,500 per placement. There will be no cap on the number of places available and our £2 billion will fund hundreds of thousands of new placements.
As Employment Minister, I have been working closely with our Job Centres to double the number of work coaches and boosting the DWP’s rapid response service to get people back on their feet and into work. We will double the number of Work Coaches through Job Centre Plus to 27,000; provide an additional £150 million into the Flexible Support Fund to remove barriers to work; and help DWP react quickly to large-scale redundancies by expanding the Rapid Response Service. We will also offer a guaranteed foundation of support to all young people on Universal Credit with a new Youth Offer, including 13 weeks of intensive support – including a referral to work-related training or an apprenticeship; new Young People’s Hubs for those who need additional tailored work coach support; and Youth Employability Coaches for those with more complex needs.