Insights

Government expands Job Support Scheme

When the Chancellor unveiled the ‘Winter Economy Plan’ on 24 September, he acknowledged that he might have to introduce further measures to support businesses if the pandemic worsened.

We doubt he was expecting to have to announce extra measures quite so soon.

Today’s extension of the ‘Job Support Scheme’ pre-empts the tighter regional lockdown rules expected to be announced in England on 12 October, which may include the forced closure of businesses such as pubs and restaurants in the worst-affected areas.

Under the expanded Scheme, employees in UK businesses that are legally required to shut due to the government’s lockdown restrictions will receive two-thirds of their pay from the government, up to a maximum of £2,100 per employee per month.

Importantly, and unlike under the latest phase of the soon-to-expire furlough scheme, employers will not be required to contribute towards wages at all – although they will be asked to cover NICs and pension contributions. Businesses will only be eligible to claim the grant while they are subject to restrictions; employees must be off work for a minimum of seven consecutive days to qualify.

The Scheme will begin on 1 November – once the furlough initiative has ended – and will operate for six months, with a review in January.

In addition to the expansion of the Job Support Scheme, cash grants for businesses required to close premises in local lockdowns in England will be increased – up to a maximum of £3,000 per month, payable every fortnight, depending on the rateable value. This compares to the grant of up to £1,500 every three weeks that was available previously.

As always, the announcement is light on detail – politically, the Chancellor had little choice but to announce the new measures before potentially tougher lockdown restrictions come into force – but we can expect more information from the Treasury in the coming days.