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Chancellor Rishi Sunak has announced a new wage scheme that will replace furlough support for workers.
To be eligible for the Jobs Support Scheme, employees in "viable" jobs must work a minimum of 33% of their hours.
They will then be paid two-thirds of their wages for the remaining hours, with the employer and government covering one-third each.
The Treasury says someone working 33% of their hours will receive at least 77% of their pay.
Bosses will be able to keep employees on for shorter hours, instead of making them redundant.
The scheme forms part of Rishi Sunak's Winter Economy Plan to deal with the impact of coronavirus.
However, only businesses that can prove they have been adversely affected by coronavirus will be able to apply.
The Chancellor also extended the self-employed grant on similar terms.
He told MPs: "Our economy is now likely to undergo a more permanent adjustment. The sources of our economic growth and the kinds of jobs we create will adapt and evolve to the new normal.
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"And our plan needs to adapt and evolve in response. Above all, we need to face up to the trade-offs and hard choices coronavirus presents and there has been no harder choice than to end the furlough scheme.
"The furlough was the right policy at the time we introduced it, it provided immediate short-term protection for millions of jobs through a period of acute crisis.
"But as the economy re-opens it is fundamentally wrong to hold people in jobs that only exist inside the furlough."
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Sunak unveiled a "pay as you grow" scheme for businesses which took government-guaranteed loans during the pandemic.
He added: "Loans can now be extended from six to ten years nearly halving the average monthly repayment.”
The planned increase of VAT from 5% to 20%, due to come into effect in January, has been cancelled.
The lower rate of 5% will remain in place until March 31 next year.
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