UK Chancellor Rishi Sunak has announced changes to the Job Support Scheme (JSS) – set to replace furlough in November.
The government will now pay at least 62% for hours not worked while the employer contribution has been cut from 33% to 5%. He said employees would now take home at least 73% of pay for working a new minimum 20% of hours.
The scheme is open to all UK businesses that can prove that they have been hit by the pandemic.
There are also additional business grants available for businesses in England with additional funding to be released by the treasury for businesses in Scotland shortly, with more details to follow.
The self-employment scheme has also been doubled from 20% to 40% of profits, with a maximum grant now of £3,750 a month.
Here are more details on the changes to the Job Support Scheme.
The JSS starts to operate from 1 November and covers 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 £3,125 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.
Stephen Montgomery, spokesperson for The Scottish Hospitality Group (SHG), has said that a national curfew in Scotland amidst rising COVID-19 transmissions would be “catastrophic for the hospitality industry” after Nicola Sturgeon said yesterday that she couldn’t rule out such a measure.
Said Stephen, who runs The Townhead Hotel, Lockerbie, “A national curfew in Scotland would be catastrophic for the hospitality industry. The current ‘rule of six’ restriction has meant that we are on life support. Further restrictions will flick the switch for many businesses, that once closed will not be able to open their doors again. This will principally hit late night venue owners who have invested significantly to adapt their premises to bar service.”
The First Minister spoke about a curfew for Scotland following UK Government ministers saying that they are considering introducing a 10pm or 11pm curfew on hospitality businesses if local measures don’t bring the spread of the virus under control in England.
She said, “I can’t stand here and rule anything categorically out. We see other countries that have introduced curfews on hospitality, including Belgium, which they think have had an impact.
“These are all things that we have to keep under review. But I don’t want to have to do any of these things. It comes back to the key point – the way to try and avoid further severe restrictions is to abide rigidly to the ones in place right now.”
Stephen Montgomery hopes that the Scottish government won’t take such a “blanket approach” because it would penalise responsible operators that are demonstrating full COVID compliance and because it could encourage illegal gatherings .
He said, “Responsible bar, restaurant and late night venue owners across Scotland have enhanced hygiene measures and controlled physical distancing in place. They are also essential to the effective use of the track and trace system. If people have nowhere to go you are massively increasing the risk of more house parties and irresponsible gatherings, where track and trace is almost impossible.
“The vast majority of bars and restaurants are operating safely. We have been adhering religiously to every regulation that has been introduced by the Scottish Government and we will continue to do so. Compliance and maintaining a unified sector are critical and something that the SHG fully supports, but tighter restrictions may encourage rogue traders which must be avoided at all costs.”
Unemployment in Scotland increased to 4.6% (128,000) between May and July and remains higher than in the rest of the UK where unemployment increased by 0.2% to 4.1% according to the Office of National Statistics. A much larger rise in job losses was prevented by the UK Government’s Job Retention Scheme (furlough) and the Scottish government has repeated calls on the UK government to extend it otherwise Nicola Sturgeon fears it will lead to a “tsunami of redundancies”.
Jamie Hepburn, the Scottish government’s Minister for Business, Fair Work and Skills, said, “These figures only partially show how the lockdown measures needed to suppress coronavirus (Covid-19) have affected our economy and labour market – they still do not reflect the full impact on employment as the Job Retention Scheme will have offered some relief to many employers and employees.
“We continue to call on the UK Government to also play its part and extend the Job Retention Scheme, particularly for sectors such as travel, tourism and hospitality that face significant long-term challenges, likely to remain when the scheme ends next month.”
Matthew Percival, CBI Director of People and Skills, said, “The easing of lockdown restrictions and a more flexible Job Retention Scheme in July have led to the beginning of a recovery in vacancies and hours worked. But rising redundancies, rising unemployment and a record fall in the number of young people in work are clear warning signs of what is to come.
“Looking ahead, a successor to the Job Retention Scheme is needed to protect jobs and businesses.”
ONS director of economic statistics Darren Morgan said, “Some effects of the pandemic on the labour market were beginning to unwind in July as parts of the economy reopened.
“Fewer workers were away on furlough and average hours rose. The number of job vacancies continued to recover into August, too. Nonetheless, with the number of employees on the payroll down again in August and both unemployment and redundancies sharply up in July, it is clear that coronavirus is still having a big impact on the world of work.”
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