Workers’ wages in ‘viable’ jobs will be topped up by the Government in a new scheme to replace furlough, the Chancellor Rishi Sunak has announced.

Chancellor of the Exchequer Rishi Sunak with Dame Carolyn Julie Fairbairn, Director General of the CBI, and Frances O'Grady, General Secretary of the TUC, outside No 11 Downing Street with his Winter Economy Plan. Picture: PA WireChancellor of the Exchequer Rishi Sunak with Dame Carolyn Julie Fairbairn, Director General of the CBI, and Frances O'Grady, General Secretary of the TUC, outside No 11 Downing Street with his Winter Economy Plan. Picture: PA Wire

Speaking in the Commons today (Thursday, September 24) he said the new Job Support Scheme would top up salaries in firms that can’t take employees back full-time.

To be eligible, employees must work at least one-third of their normal hours and of their remaining hours, they would be paid 33 per cent by the Government and 33 per cent by their employer, meaning they would receive around three quarters of their usual salary.

He also extended the self-employment income support scheme and 15 per cent VAT cut for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.

So far there has been a mixed response to the announcement in North Devon, with Selaine Saxby welcoming the measures.

North Devon Liberal Democrats ‘cautiously welcomed’ the plans but said there should be specific support for areas such as hospitality, manufacturing and the arts as well as more help for the three million or so self-employed across the country who would not receive anything.

Ms Saxby said: “I was particularly pleased to see the extension of the five per cent rate of VAT for tourism and hospitality businesses, which was a specific request within my recent backbench debate on tourism.

“The Jobs Support Scheme will see viable jobs be supported, particularly in smaller and medium sized businesses, of which we have so many in North Devon.

“There has been an extension to the self-employed grant scheme ensuring those who are self-employed are able to access similar support to those in employment.

“I have met with business leaders locally who have been concerned about the repayment of loans and am sure they will be as pleased as me with today’s announcement to ‘Pay as you Grow’ for bounceback loans, and other government coronavirus support loans which have seen their repayment terms dramatically extended.

“VAT payments have also been deferred, and all of these measures should ensure more of our North Devon businesses survive this winter.”

Research by the Liberal Democrats shows that 14,400 of the 40,400 eligible North Devon workforce are on furlough – 36 per cent.

Six per cent claim Universal Credit and 3,275 people in North Devon are now unemployed (as of August 2020) - a 241 per cent increase on this time last year.

Spokesman Alex White said: “The research we conducted made for difficult reading. Figures show already the number of unemployed people in the area up significantly between February and August this year.

“Those figures are a stark reminder that whilst these new measures are welcome, there are so many real people, with families and responsibilities, who have slipped through the cracks. Where are the job creation plans?

“Whilst I cautiously welcome the government’s last-minute U-turn, we are still calling for targeted sector support - hospitality, manufacturing and the arts especially - the areas where activity have stopped or demand is reduced due to government restrictions.

“I also want to raise the issue of the three million people excluded from these schemes through no fault of their own - the newly self-employed, those on parental leave in self-employment, those self-employed with profits of more than just £50,000, directors of limited companies, and more besides. The Government must do more for them.”

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The Chancellor’s new measures

- The new job support scheme, which will be targeted at small and medium-sized firms, with larger companies only eligible if turnover has fallen due to the crisis.

- The existing self-employed grant will be extended on similar terms and conditions as the new job support scheme.

- The temporary 15 per cent VAT cut for tourism and hospitality will be extended until the end of March.

- A new payment scheme will give more breathing space for more than £30 billion of deferred VAT payments, allowing them to make 11 interest-free payments in 2021-22 rather than a lump sum at the end of March.

- A “pay as you grow” measure will extend the repayment terms for bounceback loans from six to 10 years.

- Firms which have taken out coronavirus business interruption loans will see the Government guarantee extended for up to 10 years.

- All loan schemes will be extended until the end of the year.