The winners and losers from ministers’ new plan to protect jobs
THE impact of Rishi Sunak’s new measures to protect jobs will be uneven, with some workers benefiting while others are left behind. Here we take a look at the winners and losers.
People on or returning from furlough Three million people are still on furlough and millions more have returned to work after initially being put on the Job Retention Scheme.
For many, their positions remain tenuous. The new wage subsidies could convince employers to keep them on at least part-time rather than making them redundant.
However, experts are sceptical. For an employer with two workers, it would be cheaper to make one redundant and pay the other their full wage than to keep both on for half their hours using the new scheme.
(Most) self-employed … up to a point
Freelancers who face reduced demand over the winter months will be able to apply for a grant paying 20pc of their average monthly profits. The maximum payout will be £1,875 to cover earnings lost between November and February. They will then be able to apply for another grant to cover them until the end of April 2021. The Government has not yet said what the maximum for this one will be.
They will also be able to spread out their tax due in January over the following 12 months. However, many self-employed people feel hard done by, only receiving 20pc of their usual pay, while employees will get the majority of theirs.
Small and medium-sized businesses
SMEs will be able to access the Jobs Support Scheme. They will also be able to extend the terms of their Covid loans to up to 10 years. The Government is also developing a new loan scheme, which will be announced in January.
Self-employed people who missed out last time
People who work for themselves and were not eligible for government support via its grant scheme will miss out once again. This includes those who have only recently gone freelance, those who make profits of more than £50,000 a year and company directors who pay themselves via dividends.
Large companies will only be able to make use of the jobs support scheme if their revenue has fallen as a result of the virus. Even those who have been affected may struggle to change redundancy plans at such short notice.
Companies intending to make people redundant at the end of furlough must give them notice on Oct 1. This means businesses have very little time to adapt their plans.
The wage subsidies will be far cheaper than the Job Retention Scheme but will still add billions to the national debt.
Jobs in the arts and sport
Rachael Griffin, of wealth manager Quilter, said: “The outlook for jobs in the performance arts sector is particularly grim as most of the venues which support this continue to be closed with no real prospect of opening for full capacity for many months.”
The same is true for much of sport. If venues are not open, they will not be able to employ people and the new scheme will fall flat.