UK coronavirus live: government to support wages and help firms employ people on shorter hours | Politics

This is from Sky’s Tom Boadle, quoting from the Treasury briefing on the new job support scheme. The grant per worker will be capped at £697.92 per month, it says.

Paul Johnson, the head of the Institute for Fiscal Studies think-tank, says Rishi Sunak’s new support package won’t prevent many furloughed workers from being laid off.

Johnson fears that many jobs will now be lost once the furlough scheme ends in October, because struggling companies can’t justify bringing them back part-time.

He has tweeted that Sunak’s new scheme is less generous than the furlough scheme, and will mean job losses.

There are thought to be around three million people still furloughed (the ONS said this morning that 12% of workers were using the scheme, either part or full-time)

Back in the Commons Stephen Crabb, the Tory former work and pensions secretary, asks for an assurance that the increase to universal credit announced at the start of the crisis will be made permanent.

Sunak avoids giving that commitment, although he stresses what the government has done already, and he says that a Treasury distributional impact assessment published earlier in the year showed that low income families were benefiting most from its support measures.

This is from Frances O’Grady, the TUC general secretary.

The CBI has welcomed Rishi Sunak’s job support package.

CBI director-general Carolyn Fairbairn (who joined the photocall outside 11 Downing Street with the chancellor this morning) says it should save hundreds of thousands of jobs.

“These bold steps from the Treasury will save hundreds of thousands of viable jobs this Winter.

It is right to target help on jobs with a future, but can only be part-time while demand remains flat.”

“Wage support, tax deferrals and help for the self-employed will reduce the scarring effect of unnecessary job losses as the UK tackles the virus. Further business rates relief should remain on the table.

Alison Thewliss, the SNP Treasury spokeswoman, says Sunak did not tell the finance ministers in the devolved administrations he was cancelling the budget. Does he realise what impact this has on those administrations, which need to know what is in the UK budget?

Sunak says the chief secretary to the Treasury regularly speaks to the devolved administrations. But he says there is no reason why the UK government has to set its budget before they set theirs.

Having warned that he cannot save every business or every job threatened by the pandemic, Rishi Sunak has outlined a four-point plan to help the economy through a tough winter.
1) A new wage subsidy scheme, to encourage struggling firms to keep people on short-term hours [corrected], rather than making them redundant.

It’s designed to protect viable jobs over next six months after the furlough scheme ends in October. Employees must work at least third of their hours, and be paid for them.

Then, they’ll be paid two-thirds of their pay for the remaining hours (with the employer and the government paying one-third each). So people will still see lower take-home pay – with the Treasury saying someone who works 33% of their hours would get 77% of their wages.

But, this won’t help companies who don’t have enough work to bring staff back part-time (such as in the leisure and hospitality industry).

Notably, all small and medium-sized firms are eligible – but large firms are only eligible if their turnover has fallen in the pandemic.

2) A “Pay as you grow scheme” to help businesses whose trading has been hurt by the pandemic. Small firms can extend their bounceback loans for a decade, from 6 years, which should halve their monthly repayments, and make interest-only payments if needed. That’s an indication of the long-term damage from the pandemic.

3) More help for the hospitality sector, which has been worst hit by the crisis. Extending the cut in the VAT rate to 5% until March 31 2021 will let them retain more revenue.

4) Deferred VAT bills, with the chancellor letting businesses spread out their VAT bill over eleven smaller payments. That avoids a cash crunch in March next year, which could have hit the economy.

Sunak is responding to Dodds.

He says Labour has repeatedly changed its position on extending the furlough scheme. He says that is not the sort of consistency that business needs.

He says the new scheme will incentivise short-term working.

Details will be published in due course, he says.

He says conditionality will apply. Support will aimed where it is most needed. Large firms will only get access to the scheme subject to certain conditions.

Firms will not be allowed to make staff redundant while they are on the scheme, he says.

He says the government published a £30bn plan for jobs in July. The Kick Start scheme is a key part of that, he says. He says employers are using that now.

He says Labour wanted the furlough scheme extended. But they did not say for how long. Then they wanted it replaced. But they did not say with what. Then they said they wanted it targeted. But they did not say for whom.

He says he is willing to work with Labour – if they can decide what they want.

Yesterday Sir Keir Starmer called for a plan B, he says. But the opposition don’t even have a plan A, he says.

Anneliese Dodds, the shadow chancellor, is responding for Labour.

She says Labour has repeatedly called for an extension of wage support beyond October.

Will the scheme incentivise short-term working?

Will it incentivise training and re-training? The German scheme does, she says.

Labour welcomes many elements of what the chancellor is announcing. But Sunak only mentioned training once, she says.

Sunak says Britain can no longer go on putting its life on hold.

The country must learn to live with coronavirus, he says.

Today’s measures mark an important evolution in our approach. Our lives can no longer be put on hold. Since May we have taken steps to liberate our economy and society.

We did these things because life means more than simply existing. We find meaning and hope through our friends and family, through our work and our community.

People were not wrong for wanting that meaning, for striking towards normality, and nor was the government wrong to want this for them.

The truth is the responsibility for defeating coronavirus cannot be held by government alone. It is a collective responsibility shared by all because the cost is paid by all …

We must learn to live with [coronavirus], and live without fear.

Sunak says the VAT cut for hospitality and tourism has been extended to the end of March next year.

The final step I’m taking today will support two of the most affected sectors, hospitality and tourism.

On current plans, their VAT rates will increase from 5% back to the standard rate of 20% on January 13.

So to support more than 150,000 businesses and help protect 2.4 million jobs through the winter, I’m announcing today that we are cancelling the planned increase and will keep the lower 5% VAT rate until March 31 next year.

Sunak is announcing the extension of other loan and support schemes.

UPDATE: Sunak said:

I am extending the existing self-employed grant on similar terms and conditions as the new jobs support scheme …

He said bounce back loans have given more than one million small businesses a £38bn boost to survive, adding a “pay as you grow” scheme would be introduced to give these firms more time to repay the loans.

This means loans can now be extended from six to 10 years, nearly halving the average monthly repayment.

Businesses who are struggling can now choose to make interest-only payments and anyone in real trouble can apply to suspend repayments all together for up to six months.

No business taking up pay as you grow will see their credit rating affected as a result.

Sunak says the government has never tried anything like this.