Local MP, Gagan Mohindra, welcomed the Chancellor’s announcement today of additional financial support for businesses to help protect jobs.
Job Support Scheme (JSS)
The JSS supports the wages of employees working in businesses that are open but facing reduced demand. There will be two changes to how the JSS works. There will be a significant reduction in the employer contribution to employee wages, and there will also be a reduction in time required for an employee to be in work. These changes will benefit employers, provide greater flexibility and help protect more jobs.
Secondly, additional funding has been made available to councils in Tier 2 areas, so they can give cash grants to businesses to protect jobs. These grants are primarily aimed at hospitality, leisure and accommodation business premises, and are worth 70% of the value of the grants provided to closed businesses in Tier 3.
The start date for the JSS remains the same. It is available to employers from 1 November 2020 for 6 months, with the scheme reviewed in the new year. Further guidance will be published in the coming weeks. Employers will be able to make a claim on a monthly basis online through GOV.UK from early December 2020.
Self-Employed Income Support Scheme (SEISS)
The Government has provided significant support to self-employed people through the Self-Employment Income Support Scheme (SEISS), government-backed loans and changes to Universal Credit. The SEISS has been extended for those self-employed who continue to trade. The SEISS Grant Extension, combined with the up to £15,000 worth of support in SEISS 1 & 2, is amongst the most generous schemes for the self-employed in the world. Small business owners will also benefit from the Local Restrictions Support Grant scheme. Self-employed traders with employees will also be able to claim the JSS in respect of their employees, under the same terms as any other employer.
The Chancellor has announced that SEISS generosity levels will be increased to 40% of average monthly trading profits capped at £3,750 in total for the first instalment, covering a three-month period from the start of November 2020 to the end of January 2021. Any self-employed person is eligible as long as they were eligible for the original SEISS grant and are either currently actively trading and impacted by reduced demand, or were previously trading, intend to continue trading, but cannot currently trade due to coronavirus.
Local Restrictions Support Grants
Businesses have been through a very challenging time in recent months and it is right that support is made available for businesses in areas with additional local restrictions. The Local Restrictions Support Grant scheme will provide businesses which have legally been required to close with grants of up £3,000 per month, paid on a two-week basis. In line with the Job Support Scheme, from 1 November these grants will also be available to businesses which have been required to close on a national basis, or which have not been able to reopen since the first lockdown was introduced in March.
Councils in Tier 2 will be given additional funding for grants to businesses which can remain open, but which are nonetheless severely affected by the restrictions on, for example, indoor household mixing. Local Authorities will receive funding equivalent to paying all hospitality, leisure, hotel, and B&B areas 70% of the amount which legally closed businesses can receive, plus an extra 5% top up.
The JSS and SEISS are elements of a comprehensive package of support for individuals and businesses including rental support, mortgage holidays, and extra funding for the welfare safety net to help those unable to access other forms of support. The Chancellor has extended access to finance support, including extending four of the temporary loan schemes (CBILS, CLBILS, BBLS and the Future Fund) and providing flexibility to repay these loans and deferred VAT.
Early in 2021, for every eligible employee brought back from being on the CJRS, the Government will also pay businesses a Job Retention Bonus (JRB). This bonus will be available for workers whose jobs are supported by the JSS, as long as they still satisfy the requirements of the JRB.
Additionally, welfare measures include a £20 per week increase to the Universal Credit standard allowance and Working Tax Credit basic element. The Local Housing Allowance rates for Universal Credit and Housing Benefit claimants have been increased, and the Universal Credit minimum income floor has been relaxed.
Our economic priority is to protect jobs. The way we do that needs to evolve as the pandemic, and our health response, evolves. The Winter Economy Plan and this generous Job Support Scheme is the next step in protecting businesses, jobs and the livelihoods of the British people.