Chancellor increases financial support for businesses and workers

Chancellor Rishi Sunak

The government is to increase the reach of its existing job support and self-employed schemes, and expand business grants to support companies in high-alert level areas.

This builds on agreements reached with Local Authorities moving to Alert Level very high, with extra support for businesses, jobs and the economic recovery.

Chancellor of the Exchequer Rishi Sunak said: “I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today. These changes mean that our support will reach many more people and protect many more jobs.

“I know that the introduction of further restrictions has left many people worried for themselves, their families and communities. I hope the government’s stepped-up support can be part of the country pulling together in the coming months.”

Job Support Scheme (JSS)

When originally announced, the JSS – which will come into effect on 1 November – saw employers paying a third of their employees’ wages for hours not worked, and required employers to be working 33% of their normal hours.

Today’s announcement reduces the employer contribution to those unworked hours to just 5%, and reduces the minimum hours requirements to 20%, so those working just one day a week will be eligible. That means that if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.

Employers will continue to receive the £1,000 Job Retention Bonus. The Job Support Scheme Closed for businesses legally required to close remains unchanged.

Self-employed grant

Today’s announcement increases the amount of profits covered by the two forthcoming self-employed grants from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.

This is a potential further £3.1 billion of support to the self-employed through November to January alone, with a further grant to follow covering February to April.

Business Grants

The Chancellor has also announced approved additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert level areas. These grants will be available retrospectively for areas who have already been subject to restrictions, and come on top of higher levels of additional business support for Local Authorities moving into Tier 3 which, if scaled up across the country, would be worth more than £1 billion.

These grants could benefit around 150,000 businesses in England, including hotels, restaurants, B&Bs and many more who aren’t legally required to close but have been adversely affected by local restrictions nonetheless.

Amanda Dorel, regional director for the West Midlands at Lloyds Bank, said: “The Chancellor’s decision to extend the Jobs Support Scheme will provide a welcome boost for a number of businesses in the West Midlands, particularly as more areas begin to move into Tier 2 restrictions, including Coventry and Stoke from this weekend.

“The climate remains uncertain and it’s important that businesses continue to receive the support they need. We will continue to work with firms across the West Midlands to provide the guidance and financial support to help them navigate this turbulent period.”

Businesses West has welcomed the boosts to job and self-employment support announced by the Chancellor. Business West Managing Director Phil Smith said:

“Today the Chancellor announced last minute changes to the Job Support Scheme (JSS) and Self Employed Income Support Scheme to help employers and unincorporated businesses weather the storm.

“By reducing the contribution employers need to make to retain their staff for their non-working hours on part time hours on the Job Support Scheme from 33% to 5% more businesses will be able to afford to use the scheme for their workers incomes to be protected. The number of hours each employee on JSS needs to work for their employer has also been reduced from 33% of their contractual hours down to 20%, helping businesses use the scheme where demand for their goods and services is lower due to the impacts of COVID-19. The take home salary of the employees under JSS remains unchanged at 67% or higher – the government has increased the share borne by the government, and the maximum contribution rises to £1,542 per employee per month.

“However, there was no help for businesses who are not able to operate at all, such as the events sector, but are not required to close under local lockdowns under Tier 2 and 3. All areas of the South West remain in Tier 1, and are therefore not eligible for new grants based on hospitality businesses who are impacted by restrictions brought into other areas such as in the North West and London.

“Unincorporated businesses in the region will also be breathing a sigh of relief as the Self Employment Income Support Scheme (SEISS) grant from 1 November onwards is doubled to 40% of profits (previously 20%), but eligibility remains what it was from the scheme’s inception and the generosity is still considerably lower than 70-80% of profits earlier this year.

“More help is welcomed by Business West to help embattled businesses across our region but there is a long winter to come for firms remaining between the gaps in the various schemes.”