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UK Government Announces Emergency Jobs Scheme

United Kingdom Chancellor Rishi Sunak said the government is rolling out a job support plan, which will replace the country’s furlough plan as a continued form of COVID-19 support.

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The new plan will provide workers with 75% of their normal salary for six months and it aims to stop mass job cuts by organizations. Currently, about 12% of the UK’s workforce are on partial or full furlough leave, according to UK officials.

Sunak said the new scheme would “support only viable jobs” as opposed to jobs that only exist because the government is continuing to subsidize the wages. According to the BBC, Sunak declined to comment on what qualifies as a viable job.

“It is not for me to sit here and make pronouncements on every individual job,” Sunak said. “What I want to be able to do is to provide as much support as possible given the constraints we operate in. We obviously can't sustain the same level of things that we were doing at the beginning of this crisis.”

The government's contribution to workers' pay will fall sharply compared to the furlough scheme. Under furlough, it initially paid 80% of a monthly wage up to £2,500 — under the new scheme this will drop to 22%.

The new scheme begins Nov. 1 — the furlough scheme runs out on Oct. 31 — and it will cost the government an estimated £300m a month. Companies who use it can also still claim the Job Retention Bonus, where the government pays £1,000 for every furloughed employee who comes back to work until at least the end of January.

Other details of the Job Support Scheme are:

  • Under the scheme, the government will subsidize the pay of employees who are working fewer than normal hours due to lower demand
  • It will apply to staff who can work at least a third of their usual hours
  • Employers will pay staff for the hours they do work
  • For the hours employees can't work, the government and the employer will each cover one third of the lost pay
  • The grant will be capped at £697.92 per month
  • All small- and medium-sized businesses will be eligible for the scheme
  • Larger business will be eligible if their turnover has fallen during the crisis
  • It will be open to employers across the UK even if they have not previously used the furlough scheme
  • The scheme will run for six months starting in November.

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