CHANCELLOR Rishi Sunak has announced fresh measures to replace the furlough scheme and help the UK economy to continue to recover during the second wave of coronavirus infections.

As part of a package of measures the Chancellor said the new jobs support scheme was aimed at protecting “viable” roles rather than all posts which have been kept going as a result of state support under the furlough programme.

Under the terms of the new scheme, the Government will top up the wages of people working at least a third of their normal hours.

They will be paid for that work as normal, with the state and employers then increasing those wages to cover two-thirds of the pay they have lost by working reduced hours.

It will cost the Treasury an estimated £300 million a month for every million workers who take up the scheme.

The Chancellor told MPs: “The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery.”

And he acknowledged “we can’t save every business” and “we can’t save every job”.

The Chancellor warned that the economy may be permanently changed as a result of the pandemic.

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He acknowledged that people were “anxious, afraid and exhausted” at the prospect of further restrictions but insisted there were reasons to be “cautiously optimistic” about the country’s ability to cope.

But he said that while in March it was hoped there would be a “temporary period of disruption” to the economy, it now appeared there would be a “more permanent adjustment”.

“The sources of our economic growth and the kinds of jobs we create will have to adapt to the new normal,” he said.

Here are the changes at a glance:

  • The Jobs Support Scheme (JSS), a form of wage subsidy for “viable” jobs, will replace the furlough scheme, which will be wound down next month.
  • The JSS will allow staff to be paid by their employer for working at least a third of their usual hours, with the Government topping up part of their salary that would have otherwise been lost due to working reduced hours.
  • The Treasury said the Government would pay a third of an employee’s equivalent salary, capped at £697.92 per month, meaning a third will go unpaid.
  • All small and medium-sized businesses will be eligible for the wage support concept, which starts in November and runs for six months, but larger businesses will have to prove their profits have been hit by the pandemic.
  • The current self-employed grant will be renewed on similar terms to the new Jobs Support Scheme, the Chancellor said.
  • The temporary reduction of VAT rates from 20% to 5% for the hospitality and tourism sectors will be extended for a further two months, with a new deadline of March 31 2021.
  • Business “bounce-back loans” will have a “pay-as-you-grow” element added, giving loanees 10 years rather than six years to repay the money, a move that will slash monthly repayments by almost half, according to the Chancellor.
  • Those struggling to repay their bounce-back loans will be able to choose to make interest-only payments and “anyone in real trouble” will be permitted to suspend repayments all together for up to six months, said Mr Sunak.
  • The deadline for taking out a coronavirus business interruption loan will be extended until November 30, with Mr Sunak also increasing the Government guarantee on them for up to 10 years.