Rishi Sunak announces new furlough plan where workers get 77% pay for doing 1/3 of their hours

RISHI Sunak today announced his new six-month furlough replacement scheme to save thousands of jobs – with the Government paying a chunk of lost wages.

The Chancellor unveiled his Winter Economy Plan to help the nation through a tricky few months ahead – with plans to extend state support until next May.

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The Chancellor announced a new furlough scheme today to replace the old one


The Chancellor announced a new furlough scheme today to replace the old oneCredit: AFP or licensors


What is Rishi Sunak’s Job Support Scheme, who is eligible and how do I apply?

  • To be eligible, employees must be working at least a third of their contracted hours and be paid for those hours in full by their employer
  • For the two thirds of the other hours not worked, the Government will pay a third – so 22 per cent of their overall wages
  • The employer will have to pay the other third of it. It means with the third they are already paying, they will have to fork out 55 per cent of the total wages
  • The scheme will start on November 1 – the day after the other furlough scheme ends
  • It’s open to all small and medium sized businesses, even if they didn’t use the furlough scheme beforehand
  • The Jobs Support Scheme will only help those on the PAYE pay roll. Self-employed workers have been given more time to pay their tax bill and extra grant help
  • It’s likely that employees won’t have to apply – and the employers will do the work for them
  • Employees must be on an employer’s PAYE payroll on or before 23 September 2020 to take part
  • Employees will be able to cycle on and off the scheme and do not have to be working the same pattern each month


Boris Johnson and the Chancellor have stressed the furlough scheme can’t continue in its current form forever – where 80 per cent of people’s wages are paid by the Government up to a cap of £2,500 a month.

Millions of workers are still on part-time ‘flexible furlough’ and getting help through the scheme, which ends at the end of October.

Today Mr Sunak warned of six months of pain to come, which is why he is extending several types of economic support to help millions of workers and businesses stay afloat.

As The Sun revealed today, businesses will be able to get a large chunk of help to pay people’s wages through what is being called the “jobs support scheme”.

Employees must work at least a third of their normal hours, and the Government and the employer will top up their wages.

Of the remaining two thirds, the Government will pay a third (22 per cent of the total wages) and the employers will have to pay the other third to qualify.

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The Government’s chunk of the support will be capped at £697.92 per month, and it means workers who are currently working a third of their normal hours will get 77 per cent of their normal wages.

The support will be a particular boost to those working in the beleaguered hospitality industry, which has been hard-hit by covid-19, but many businesses may decide they can’t afford to pay such high chunks of people’s wages when they’re not doing their full hours.

The new scheme will be open to employers across the UK – even if they haven’t used the old furlough scheme before. It will start on November 1.

Firms can still claim the existing £1000 job retention bonus in the new year if they keep on staff.

Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee either – meaning people are likely to stay in their jobs for longer if they are at risk of being made redundant.


He's ditched this year's Budget over the ongoing situation over coronavirus


He’s ditched this year’s Budget over the ongoing situation over coronavirusCredit: PA:Press Association

Mr Sunak said today: “The Government stands with the British people and British business.

“It is now clear, as the PM and our scientific advisers have said, for at least the next six months, the virus and restrictions are going to be a fact of our lives.

“Our economy is now likely to undergo a more permanent adjustment, the sources of our economic growth and the kinds of jobs we create will adapt and evolve to the new normal. Our plan needs to adapt and evolve.”

The Chancellor also announced:

  • A VAT cut for the hospitality and tourism industry will continue March next year – meaning cheaper meals out will continue
  • The coronavirus emergency loans for businesses would be extended until the end of the year – and loans can be repaid over ten years in a new ‘Pay as you Grow’ scheme
  • Businesses who are struggling to pay back their loans can make interest-only payments
  • Self-employment grants will be extended
  • Firms can spread their VAT bill over 11 smaller payments to make it easier for them to cough up the cash owed – and no interest
  • People making self-assessment claims can extend their tax bills for another year

Boris Johnson – who was on a visit to a police station this lunchtime and wasn’t by the Chancellor’s side – said today Mr Sunak was being “totally realistic with people about the prospects of the economy”.

“I fully support the package of measures we have jointly drawn up,” he said.

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“We are continuing to do everything we can to support the workforce, jobs, livelihood throughout the crisis.

“It’s a very creative and imaginative proposal from the Chancellor.”


Labour claimed the news was a “u-turn” for the Treasury on extending the current furlough scheme – which they have repeatedly called for.

The CBI welcomed the news and said it would save “thousands of jobs”.

Dame Carolyn Fairbairn, CBI Director-General, said: “It is right to target help on jobs with a future, but can only be part-time while demand remains flat.

“This is how skills and jobs can be preserved to enable a fast recovery.”

And Mike Cherry from the Federation of Small Businesses said it would help the UK’s smaller firms with an “incredibly difficult winter”.

He added: “We welcome that the Chancellor is ensuring that decisions to protect public health are informed by the need to protect the economy, people’s jobs and prospects for young people in our schools and workplaces.”

But others were less supportive of the package and said it didn’t go far enough to stop jobs being lost.

And there was no hint of how new jobs will be created, either.

Helen Barnard, Director of the independent Joseph Rowntree Foundation said the Chancellor had “failed” to be as bold and compassionate as the previous support.

She said: “Jobs that have been viable in the past and will be again in the future need specific support to get through the current crisis. But the design of this scheme risks undermining its success and leading to more job losses by creating an unnecessary disincentive to employers to make use of it.”

And she called on the Government to launch a retaining scheme to help people get into new jobs rather than be “pulled further into poverty” during the course of the year – and for them to promise to keep the Universal Credit boost.


Miatta Fahnbulleh, Chief Executive of the New Economics Foundation, said: “Only providing a 22% wage subsidy for non-working hours the government is asking many people to take a painful hit to their income that many simply can’t afford.

“The Chancellor was right to say that life is about more than just existing – but this plan will not support the many people struggling to exist in the most basic ways. If we are to avoid further unemployment and an income crisis for many families this winter, we need a better plan.”

The latest bailout plan comes as confirmed new coronavirus cases soared above 6,000 yesterday— the highest daily number since May 1.

Boris and Rishi have promised “creative” schemes to make sure businesses are still supported throughout the pandemic.

There is already some targeted help for businesses in lockdown areas – who can claim grants to help keep them going.

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Pubs, restaurants and cafes which have been ordered to shut down will be able to claim for extra cash as a “safety net” to help them cope through local lockdowns.


The statement for extra economic help for the nation comes after Boris revealed his new lockdown measures this week – designed to prevent another full shutdown like in March.

Pubs and restaurants will have to shut at 10pm and boot customers out. People have been told to work from home again if they can.

But the PM has said a full lockdown could be on the cards if these measures don’t stop the spread.

One business owner – who is operating in a lockdown area in the North East – told Radio 4 today that his profits were down nearly 50 per cent on the week before after he was told he had to implement a 10pm curfew.

It came as the Office for National Statistics painted a grim picture of the nation’s finances – with the economy still 11% smaller than before the pandemic.

Just half the amount of jobs are now being advertised, compared to earlier in the year before covid struck.

The largest quarterly decline during the 2008 recession was 2.1 per cent.

And the young have been the worst hit – with half of people on furlough being ages 16 – 24.

Boris visiting a police station in Northamptonshire today


Boris visiting a police station in Northamptonshire todayCredit: PA:Press Association

Today Sir John Timpson, chair of Timpsons stores, said the Chancellor should consider targeted support for other businesses that have “really been hung out to dry” such as the night time economy or wedding suppliers.

Businesses such as nightclubs still have yet to reopen due to the ongoing pandemic – and look unlikely to be allowed to do so as restrictions are set to remain in place for another six months.

This morning Cineworld warned it may need to raise more money in the event of more coronavirus restrictions – and posted a £1.3billion loss for the six months to June.

Their branches will have to shut at 10pm from tonight, hurting sales further – though people will be able to stay until the end of their film if it starts before the cut off.


Boris Johnson promises ‘creative and imaginative schemes’ when Rishi Sunak ends coronavirus furlough cash



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