UK announces “Winter Economy Plan”

government building

The UK Government announced the “Winter Economy Plan” as some of the previous Covid-19 economic measures are being wound down.

Furlough scheme to close and be replaced.

The existing Furlough scheme to close on 31/10.  The new Job Support Scheme announced to start on 01/11.  The key points of the new scheme are;

  • Employee moves to part time work.
  • Employer pays the employee for the hours worked.
  • Employer and Government share some of the rest of the wages between them.
  • There is a limit on the Government share.
  • Employee is paid less than full time pay but more than the hours worked.
  • Example – you work a third of your normal hours, and get paid for that time.  Between the Employer and the Government, you would also then receive approximately two thirds of the remaining normal pay.  That would mean you would receive 77% of your normal pay.

Other key points.

  • Businesses that took out Government Covid loan schemes now have 10 years to pay back the debt, and can access limited payment holidays if required.
  • The Self Employed will receive a further grant for the period of November to January however this is reduced to 20% of previous earnings, capped at £1,875, and is taxable.
  • The 15% VAT reduction for the tourism and hospitality sector is extended to March.
  • Further time for businesses to pay VAT bills to the Treasury, and further time for self assessment tax payers to pay their tax bills as well.

What do they say?

The Government stated;

“The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery…Our approach to the next phase of support must be different to that which came before.  The primary goal of our economic policy remains unchanged – to support people’s jobs – but the way we achieve that must evolve.”

The Labour Party stated;

“…this comes too late for many people who have already lost their jobs- because the businesses employing them believed there would be no wage support following the end of next month.
Indeed, the deadline for redundancy consultations by large firms before the end of the furlough scheme, came and went last week without a word from this government.
If the package of measures announced today can help people keep their jobs, and can help businesses through hard times, then Labour will of course support them- and there’s much in this statement that we do support.
…we must ensure measures are as effective as possible at keeping workers in employment, getting unemployed people back into work, and keeping viable businesses in operation.”

Want to learn more?

Read the Government press release here.

Find the Labour Party press release here.

Learn more about NewsBrokerUK here.