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Government job support scheme

Published: Monday 28th September 2020

The government has announced a new job support scheme in response to the ongoing pandemic. Chancellor Rishi Sunak announced the scheme as the next phase of the Government’s economic plan regarding Coronavirus. Millions of people have moved off the furlough scheme in recent months. This has occurred as more people return to work and the economy has opened more. The new measures came with a warning from Chancellor Sunak that the economy was, “now likely to undergo a more permanent economic adjustment.”

Lifebuoy floating in the ocean to highlight the new government job support scheme

What is the new job support scheme?

The new job support scheme aims to help companies keep employees on shorter hours instead of making them redundant. Employees must work a third of their ‘normal’ hours. These hours will be paid for by employers. The government will then pay employees for a third of the time they are not working, up to a limit of £697.92 per month. This means that in total, employees will receive 77% of their usual pay.

The new jobs support scheme is aimed at helping small and medium-sized businesses. The new scheme will only be available for large-sized companies that have seen turnover fall by a third or more. The scheme is also open to companies that have not applied for furlough before. This new support will begin in November and run for six months.

Signpost with conflicting messages to highlight the new government job support scheme

Too little too late?

However, the new scheme has already come under fire before it has begun. A number of flaws have been highlighted by groups examining the new scheme. The Resolution Foundation, a British independent think tank, revealed it would cost a company £1,500 to employ one fill-time worker on £17,000, but over £2,000 a month for two half-time workers on the same salary. Tony Wilson, head of the Institute for Employment Studies, said the measures where not enough to stop rising unemployment, remarking, “It is going to make for some difficult decisions between managers and unions over the coming months.”

The Labour party has accused the government of throwing one million job on the scrapheap. It claims the new measures ignore many sectors as it was “impossible” for them to meet the ‘working for a third of normal hours’ requirement. These sectors include those relying on mass gatherings, such as events, sports venues and theatres. Lucy Powell, the shadow minister for business and consumers, criticised the new scheme. She said, “Even for those who can access it, the job support scheme is badly designed and could lead to a wave of job losses, because the chancellor’s sums do not add up for businesses. He must think again, before the jobs crisis reaches tipping point.”

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