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Wage plan under fire

FM blasts Sunak for cash shortfall in new scheme

Rishi Sunak at Tory conference 2020

Rishi Sunak: new measures

First Minister Nicola Sturgeon has criticised Chancellor Rishi Sunak for failing to offer Scotland any further cash to support his new package of measures for businesses.

Employers welcomed the new scheme which will see their contribution to staff wages sharply cut.

But there was also no extra cash for the devolved administrations in Scotland, Wales and Northern Ireland to help pay for the extra support.

Ms Sturgeon tweeted: “The Chancellor has told the Scottish Government that today’s announcements won’t deliver any upfront extra cash for Scotland beyond the (welcome) £700m announced recently – & he won’t confirm the range of extra spending (beyond business support) that it’s expected to pay for or for how long.

“Businesses in England have been given, rightly, an open ended commitment to support for as long as needed.

“The Scottish Government will be expected to match that for Scottish businesses, with no confirmation that the money will be there to pay for it (& no borrowing powers to raise it).

“It is an intolerable and unacceptable position – and deeply unfair to Scottish businesses who deserve the same open ended commitment given to counterparts in England.”

Mr Sunak announced changes to the Job Support Scheme, coming into effect on 1 November, which will mean the employer contribution to unworked hours is reduced from a third to just 5%, and the minimum hours requirement falls from 33% to 20%.

Those working just one day a week will be eligible for support.

For someone 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 for businesses legally required to close remains unchanged.

He has also offered more help for the self-employed and expanded business grants to support companies in high-alert level areas.

However, there was criticism that individuals operating through their own limited company were once again overlooked.

Self-employed grant

Today’s announcement increases the amount of profits covered by the two forthcoming self-employed grants from 20% to 40%, 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, with a further grant to follow covering February to April.

Business Grants

The 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.

In England, 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.

These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who aren’t legally required to close but have been adversely affected by local restrictions nonetheless.

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Mr Sunak said: “I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today. These changes mean that our support will reach many more people and protect many more jobs.

“I know that the introduction of further restrictions has left many people worried for themselves, their families and communities. I hope the government’s stepped-up support can be part of the country pulling together in the coming months.”

Pubs and restaurants in much of Scotland will remain closed for another week, Nicola Sturgeon said yesterday.

The First Minister said restrictions introduced at the beginning of October – which were intended to last for two weeks – would continue for a third week. 

Pubs hit out at ‘lack of consultation’ on shutdown

The latest measures come amid growing frustration over the rules which many are finding too confusing.

The officer leading the police response to the pandemic in England yesterday admitted he did not know the lockdown rules.

Owen Weatherill told MPs the new three-tier system was too confusing and the public needed simpler messages.

Latest package of support

JOB SUPPORT SCHEME – OPEN

  • The JSS starts to operate from 1 November and coves all Nations of the UK. For every hour not worked, the employee will be paid up to two-thirds of their usual salary.
  • The government will provide up to 61.67% of wages for hours not worked, up to £1541.75 per month (more than doubling the maximum payment of £697.92 under the previous rules). The cap is set above median earnings for employees in August at a reference salary of £3125 per month.
  • Example: a typical full-time employee in the hospitality industry is paid an average of £1,100 per month. Under the Jobs Support Scheme for open businesses, they will still take home at least £807 a month. All the employer needs to pay is a total of £283 a month or just £70 a week; the government will pay the rest. 
  • Employers using the scheme will also be able to claim the Job Retention Bonus (JRB) for each employee that meets the eligibility criteria of the JRB. This is worth £1,000 per employee. Taking JSS-Open and JRB together, an employer could receive over 95% of the total wage costs of their employees if they are retained until February.

SELF EMPLOYED

  • The Government will provide two taxable SEISS grants to support those experiencing reduced demand due to COVID-19 but are continuing to trade, or temporarily cannot trade.
  • It will be available to anyone who was previously eligible for the SEISS grant one and grant two, and meets the eligibility criteria.
  • Grants will be paid in two lump sum instalments each covering 3 months. The first grant will cover a three-month period from the start of November 2020 until the end of January 2021. The Government will pay a taxable grant which is calculated based on 40% of 3 months’ average trading profits, paid out in a single instalment and capped at [£3,750.]
  • The second grant will cover a three-month period from the start of February until the end of April 2021. The Government will review the level of the second grant and set this in due course.

BUSINESS GRANTS

  • We are providing additional funding to allow Local Authorities (LAs) to support businesses in high-alert level areas which are not legally closed, but which are severely impacted by the restrictions on socialising. The funding LAs will receive will be based on the number of hospitality, hotel, B&B, and leisure businesses in their area.
  • LAs will receive a funding amount that will be the equivalent of:
  • For properties with a rateable value of £15k or under, grants of £934 per month
  • For properties with a rateable value of between £15k-£51k, grants of £1,400 per month
  • For properties with a rateable value of £51k, grants of £2,100 per month
  • This is equivalent to 70% of the grant amounts given to legally closed businesses (worth up to £3,000/month).
  • Local Authorities will also receive a 5% top up amount to these implied grant amounts to cover other businesses that might be affected by the local restrictions, but which do not neatly fit into these categories.
  • It will be up to Local Authorities to determine which businesses are eligible for grant funding in their local areas, and what precise funding to allocate to each business – the above levels are an approximate guide.
  • Businesses in Very High alert level areas will qualify for greater support whether closed (up to £3,000/month) or open. In the latter case support is being provided through business support packages provided to Local Authorities as they move into the alert level. The Government is working with local leaders to ensure the Alert Level very high packages are fair and transparent


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