CHANCELLOR INCREASES SUPPORT FOR JOBS AND BUSINESSES
Dewsbury MP Mark Eastwood today welcomed the Chancellor's announcement of increased support for jobs and businesses.
Throughout this crisis, the Government's economic priority has remained the same: to protect jobs. But as the crisis evolves: policy evolves.
Today's announcement follows the economic package of support for businesses who are legally required to close, including the expanded Jobs Support Scheme, more generous and frequent cash grants, and more help for the self-employed. But the economic situation is damaging even for some businesses who can stay open. That is why today the Government has announced a package specifically for those businesses which are not forced to close, but face reduced demand due to additional social distancing restrictions:
A more generous Job Support Scheme: employers contributing significantly less, the government a lot more
Cash grants for hospitality and leisure businesses in Tier 2 – worth up to £2,100/month and backdated to August
A doubling of our third self-employed grant from 20 per cent to 40 per cent of self-employed people’s profits
Alongside the Winter Economy Plan, these announcements will give businesses, whether they are open or required to close, the flexibility to adjust and plan over the coming months – and comes on top of the £200 billion packages of support the Government has committed since the beginning of the crisis.
Mark Eastwood MP for Dewsbury said
" I hugely welcome the increased support measures announced today by the Chancellor to support jobs & businesses. These measures will be a huge boost to many individuals and businesses across Dewsbury, Mirfield, Kirkburton and Denby Dale, with self-employed grants doubling to 40%, a more generous job support scheme and support for businesses impacted by tier 2 restrictions being able to claim grants worth up to £2,100 every month."
More detailed information about the key aspects of today's announcement are outlined below:
More help for the self-employed
- The Government recently announced a grant extension for self-employed small businesses who used the existing SEISS scheme. The grant matched the average grant of the original Job Support Scheme, and represents 20% of three-month earnings, for November to January. Eligibility criteria will be refined to check whether the self-employed trader is still trading and is suffering lower revenues as a result of coronavirus.
- TODAY, the Chancellor has increased the value of that grant from 20% to 40% of three-month earnings, for November to January. This will mean the maximum available grant will increase from £1,875 to £3,750. And there will also be a further grant payment, covering February to April, as well. This increase reflects the increase in government contribution to the wages of those who are employed on the JSS, and ensures parity for those who are in self-employment.
- Grants will be available for any self-employed person who has either been ordered to temporarily stop trading, or who is facing significantly reduced demand, regardless of whether they live in a Tier 1, 2 or 3 area. This will bring the total support for the self-employed during this crisis to £13.2 billion.
Information on Cash Grants for Hospitality
- The Government recently announced that businesses forced to close due to national or local restrictions will receive up to £3,000 per month, with payments coming after two weeks instead of three. The Government also extended the scheme to include businesses which have been forced to close on a national rather than a local basis, or which have not been legally able to reopen since the first lockdown in March – such as nightclubs.
- TODAY, the Chancellor is providing additional funding through the Local Restrictions Support Scheme to provide grants to businesses in Tier 2 areas which are not forced to close, but which are facing reduced demand due to social distancing. These grants will be distributed to Local Authorities who will determine exactly which businesses are eligible for grant funding in their local areas, and how much to grant.
- This grant is primarily designed for hospitality and leisure businesses affected by Tier 2 restrictions. Each council will receive an amount of funding based on the number on hospitality, leisure and accommodation businesses in that area.
- These new grants will be equivalent to 70% of the grants given to legally closed businesses and will be backdated until August for areas which have had enhanced restrictions since then, such as Manchester:
- For business properties with a rateable value of £15,000 or under, grants will be worth £934 per month. If the property is forced to close, they can receive £1,334 per month.
- For business properties with a rateable value of between £15,000 and £51,000, grants will be worth £1,400 per month. If the property is forced to close, they can receive £2,000 per month.
- For business properties with a rateable value of £51,000 or over, grants will be worth £2,100 per month. If the property is forced to close, they can receive £3,000 per month.
- Local authorities will also receive discretionary funding to support businesses. Local authorities will also receive a 5% top-up amount to these grant amounts to cover other businesses that might be affected by the local restrictions, but which do not fit neatly into these hospitality or leisure categories, or which may not be in the business rates system.
- Grants will be available from 1 November. Grants will be administered by local authorities, and will remain in place until April 2021, with a review point in January. This funding will apply in England only. If applied across England, this would provide over £250 million support for businesses each month. There are over 150,000 hospitality, hotel, B&B and leisure businesses in England which could benefit from this funding.
Increasing the generosity and eligibility of the Job Support Scheme OPEN
- In September the Government announced the Job Support Scheme OPEN to support companies facing periods of low demand over winter, helping them to keep staff on reduced hours rather than laying them off, and protecting people’s wages. A company will continue to pay its employee for time worked, but the burden of hours not worked will be shared equally between the employee, employer and government – a third each way, with the employer contributing 33% of unworked wages and the employee receiving 67% of their wages for time not worked. The JSS is also designed to incentivise work, so employees need to be working at least a 33% of the time.
- The Chancellor then built on this by then announcing the Job Support Scheme CLOSED. In order to protect jobs in UK businesses whose premises are legally required to CLOSE as a result of local or national coronavirus restrictions, the government will provide a grant for employees unable to work, covering two-thirds of their usual wages. Other than NICs, there is NO employer contribution and no requirement for the employee to work.
- TODAY, the Chancellor is increasing the eligibility and generosity of the Job Support Scheme OPEN. More regions and businesses are moving into Tier 2 restrictions – meaning more businesses that remain OPEN, but experiencing a significant fall in revenues and demand. That is why the government is rebalancing contributions between employer and government, to ensure that the government shoulders the burden of the cost as the virus remains with us for the near future.
- Employer contribution: The employer will now have to pay just 5% of hours not worked – down from 33% previously, as well as NICs and pension costs. This is more generous to the employer than the furlough was in October. These changes will mean the maximum government contribution to employment costs will significantly increase from £697.92 to £1,541.75 per month. A typical furloughed employee in hospitality earns £1,000 a month.
- Employee contribution: The employee must work at least 20% of their usual hours – down from 33% previously. This provides more flexibility to businesses facing reduced demand and will allow more employees to be claimed for. The employer will continue to pay for all hours worked by the employee.
- Payment: For every hour not worked, the employee will be paid up to 67% of their usual salary. The government contribution to wages for hours not worked will therefore increase from 33% to 62% of wages, subject to a cap of £1,541.75 per month. In total, each employee below the cap will receive at least 73% of their reference salary (including hours worked).
- Duration: The changes will begin on 1 November, for a period of six months, and with a review in January. Payments will be available from 8 December. The scheme is UK-wide.
- Job Retention Bonus: Businesses will still be able to benefit from the £1,000 Job Retention Bonus. Taking the Job Support Scheme OPEN and the £1,000 Job Retention Bonus, the average furloughed worker will have around 95% of the total wage costs covered by the government if they are retained until February.
- Eligibility: All small and medium-sized businesses. Larger businesses that have experienced declines in revenue.