Industry welcomes ‘Winter Economy Plan’
1 October 2020
Plans for a new Job Support Scheme starting in November have been warmly received by the manufacturing industry, with experts suggesting it will save many thousands of jobs.
The new support scheme forms the centrepiece of the government’s Winter Economy Plan, which was unveiled by Chancellor Rishi Sunak at the end of September. The plan sets out how the government will continue to protect jobs and support businesses following the closure of the furlough scheme at the end of October.
The Job Support Scheme will run for six months from 1 November to protect “viable” jobs in businesses facing lower demand over winter months due to COVID-19.
Under the scheme, the government will contribute towards the wages of employees who are working fewer than normal hours. Employers will continue to pay wages for the hours worked, but for the hours not worked for the government and the employer will each pay one-third of the employee’s equivalent salary.
To be eligible, employees must be working at least a third of their usual hours. The government’s contribution will be based on the employee’s usual salary and capped at a maximum of £697.92 per month. The scheme can be used alongside the Job Retention Bonus, which is a one-off payment of £1,000 for every furloughed employee who remains in employment through to the end of January.
Other measures in the Winter Economy Plan include a new payment scheme to give businesses more breathing space on paying their VAT bills, and more flexibility on repayments for those who secured a government-backed Bounce Back Loan.
Stephen Phipson, Chief Executive of Make UK, commented:
“I warmly congratulate the Chancellor for taking decisive action that will help avoid the significant redundancies we were facing had there been a cliff edge end to government support. The priority right now has to be saving as many jobs as possible and this is a bold and brave move which industry will welcome.”
Geraldine Bolton, Chief Executive of the Confederation of British Metalforming (CBM), said:
“A lot of our members are heavily involved in the automotive and aerospace sectors and these are two of the worst affected industries. The furlough scheme has been a great success, but the October deadline is fast approaching and our members are starting to plan for future staffing levels against the reality of sales they are expecting.
“The Job Support Scheme will give them more time to look at new revenue streams, whilst providing flexibility to get people back into work at reduced hours.”
Photo: Chancellor Rishi Sunak presenting his Winter Economy Plan. (Credit: Pippa Fowles/No 10 Downing Street)