5 November, 2020 Open access
5 November, 2020 Open access
Chancellor responds to worsening economic backdrop and the need to give people and businesses security through the winter
The government has announced an extension of the Coronavirus Job Retention Scheme (CJRS) to the end of March 2021, and extra support for the self-employed through the Self-Employment Income Support Scheme (SEISS).
In a statement in the Commons earlier today, the Chancellor Rishi Sunak said -
'... our highest priority remains the same, to protect jobs and livelihoods. That's why we've already decided to extend the job retention scheme to December. But people and businesses will want to know what comes next, how long we plan to keep the scheme open, and on what terms. They want certainty.
The government's intention is for the new health restrictions to remain only until the start of December. But as we saw from the first lockdown, the economic effects are much longer lasting than the duration of any restrictions.
And as the Bank of England have said this morning, the economic recovery has slowed and the economic risks are skewed to the downside. Given this significant uncertainty, a worsening economic backdrop, and the need to give people and businesses security through the winter, I believe it is right to go further ...'
As a result, the Chancellor announced that -
'... the furlough scheme will not be extended for one month, it will be extended until the end of March. The government will continue to help pay peoples wages up to 80 per cent of the normal amount, All employers will have to pay for hours not worked is the cost of employer NICs and pension contributions. We will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more ...'
NB - the Chancellor also said that -
'... I want to reassure the people of Scotland, Wales and Northern Ireland. The furlough scheme was designed and delivered by the government of the United Kingdom on behalf of all the people of the United Kingdom, wherever they live. That has been the case since March, it is the case now, and will remain the case until next March ...'
As a result of the extension of the CJRS, the Chancellor also confirmed that the Jobs Retention Bonus will not be paid in February 2021 as planned, and that the government will redeploy a retention incentive 'at the appropriate time'.
In addition, the government announced extra support for the self-employed. Further to the Chancellor's announcement last week that support delivered through the SEISS will double from 40 to 80 per cent of trading profits for November 2020, the government said today that -
'... the Government is announcing that we are increasing the overall level of the grant to 80% of trading profits covering November to January ... This is £7.3 billion of support to the self-employed through November to January alone, with a further grant to follow covering February to April.'
For more information, see Government extends furlough to March and increases self-employed support from gov.uk