In a speech in the Commons on 5 November, the Chancellor of the Exchequer announced that the government would offer “significant extra support to protect jobs and livelihoods in every region and nation”. The headline announcement in this speech was the further extension of the Job Retention Scheme (JRS). At the weekend, an extension until the end of December had already been announced, but now the government has gone further and extended the scheme until the end of March 2021.
As it operated earlier in the year, for those on furlough leave, the government will pay 80% of an employee’s earnings, up to a cap of £2,500 per month. Employers will need to pay the employers National Insurance contributions and pension auto enrolment contributions. They can also pay their employees more than the government furlough payment, if they choose. Flexible furloughing will still be available, so there is no minimum furlough period required.
This decision will be reviewed in January 2021 to see if the level of support is still appropriate, and if employers should be asked to contribute more.
The extension of the JRS means that the previously announced Job Support Scheme will no longer be introduced. The Job Retention Bonus, which was intended to be paid in February to firms that retained previously furloughed staff, will also now no longer be paid.
In addition to the measures above, the government has also announced:
- An increase in the Self-Employed Income Support Scheme grant payable. This will now cover 80% of average trading profits, capped at £7,500, for the three months from November to January.
- Another grant will be paid covering the period from February to April, the level of which is yet to be announced.
- Grants of up to £3,000 per month, payable to businesses that are forced to close due to national or local restrictions.
- Plans to extend the government loan schemes on offer to businesses struggling due to the pandemic.