In recognition of the challenging times ahead, the Chancellor said he would be increasing support through the existing job support and self-employed schemes, and expanding business grants to support companies in high-alert level areas.
Chambers have been campaigning for greater support for businesses experiencing big falls in demand as a result of new restrictions, and a number of the steps announced yesterday, including the lowering of employer contributions and the number of hours worked needed to qualify for the scheme, respond directly to our calls.
Backdated grants for hospitality firms in tier two and enhanced grants for the self-employed will go some way to alleviating pressure on many of those who have been particularly vulnerable to the economic impact of the pandemic which hopefully we will avoid.
Chambers have also called for support to be truly commensurate with the restrictions imposed on businesses as part of our five tests for Coronavirus measures. The true test of these reforms will be whether they help businesses on the ground get through the difficult months ahead. Chambers of Commerce will continue to work with the Treasury to ensure that support is responsive and preserves businesses and livelihoods.
Key enhancements announced yesterday:
- Open businesses which are experiencing considerable difficulty will be given extra help to keep staff on as government significantly increases contribution to wage costs under the Job Support Scheme, and business contributions drop to 5%
- Business grants are expanded to cover businesses in particularly affected sectors in high-alert level areas, helping them stay afloat and protecting jobs
- Grants for the self-employed doubled to 40% of previous earnings.
Job Support Scheme (JSS)Recognising the pressure businesses in some sectors and areas are facing, the announcement lightens the burden of keeping on staff.
When originally announced, the JSS – which will come into effect on 1 November - saw employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours.
Yesterday’s announcement reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hour requirements to 20%, so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.
Employers will continue to receive the £1,000 Job Retention Bonus. The Job Support Scheme Closed for businesses legally required to close remains unchanged.
The Job Support Scheme Open Factsheet can be accessed here and the HM Treasury Stakeholder Info Pack here.
Business GrantsThe Chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas. These grants will be available retrospectively for areas who have already been subject to restrictions, and come on top of higher levels of additional business support for Local Authorities moving into Tier 3 which, if scaled up across the country, would be worth more than £1 billion.
The Local Restrictions Support Grant (Tier 2) scheme can be accessed here.
Yesterday’s announcement increases the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.
This is a potential further £3.1bn of support to the self-employed through November to January alone, with a further grant to follow covering February to April.
The Self-Employment Income Support Scheme Grant Extension can be found here.