Delivering a speech in Parliament, the chancellor announced a package of measures that will continue to protect UK manufacturing jobs and help industry firms through the uncertain months ahead.
The package includes a new Jobs Support Scheme to protect millions of returning workers and help for businesses in repaying government-backed loans.
The announcement comes after the prime minster Boris Johnson set out further measures to combat the spread of coronavirus over the winter, while preserving the ability to grow the economy.
Under the scheme, which will run for six months and help keep employees attached to the workforce, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
Employers will continue to pay the wages of staff for the hours they work - but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.
This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can’t work.
Employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme. Further guidance being published soon, the government says.
This includes extending the length of the loan from six years to 10, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses. These measures hope to protect jobs by helping businesses recover from the pandemic.
The government also intends to give Coronavirus Business Interruption Loan Scheme lenders the ability to extend the length of loans from a maximum of six years to 10 years if it will help businesses to repay the loan.
In addition, the chancellor also announced he would be extending applications for the government’s coronavirus loan schemes that are helping over a million businesses until the end of November.
As a result, more businesses will now be able to benefit from the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund. This change aligns all the end dates of these schemes, ensuring that there is further support in place for those firms who need it.
“Building on this, we must also recognise that there are some sectors of manufacturing where there is still not enough demand to even drive part time work. These are viable, often world leading firms, facing a sustained but temporary absence of demand. The aerospace and automotive sectors in particular, along with their supply chains, are leading edge high skill areas which will be the growth sectors of the future.
“I know that the Chancellor shares our concerns and we look forward to discussing what further measures can be brought forward to support these vital sectors for our economy which will be the engines of our future economic success.”
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