What Is The Winter Economy Plan? (Furlough 2.0)

There’s just one month left of the furlough scheme, which will come to a close at the end October.

However with rising cases of coronavirus, and the new lockdown measures being put into place, jobs are massively at risk once again.


The Winter Economy Plan

Rishi Sunak announced today his Winter Economy Plan, which businesses are hoping will acts as a furlough 2.0.

The furlough scheme has been widely used by businesses during the coronavirus pandemic.

Many have expressed that the schemes closure will impact jobs, and have pleaded for ongoing support over the winter.

Therefore the Chancellor decided to scrap his November Budget due to the uncertainty moving forward, and instead announce his Winter Economy Plan.

But is the new scheme actually a type of Furlough 2.0?


Furlough 2.0?

The Winter Economy Plan isn’t something brand new: it draws from German influences, and will bear similarities to the Furlough Scheme.

The multi-billion pound plan will see the government subsidise wages for workers who can only return to work on a part-time basis.

If a member of staff is able to work 33% (minimum) of their usual hours, then the government have pledged that they will pay a third of the remaining wages.

The Winter Economy Plan essentially is a continuation of the Furlough model, but less generous, with the government pledging to pay less than they are currently.

The new Job Support Scheme will be available to small and medium sized businesses, but larger ones will have to prove that the coronavirus pandemic is impacting their profits.


What Other Support Is Available?

Rishi Sunak didn’t stop there. He offered out lots more support for the coming months as part of his Winter Economy Plan.

We plan to write more but, for now, here’s a summary of the other aspects of the Winter Economy Plan:

VAT For Hospitality & Travel

  • VAT will remain at 5% for hospitality and travel until March 2021.

Self Employed Income Support Scheme

  • An extension of the Self Employed Income Support Scheme (which will function on the same terms as the new Job Support Scheme).

Bounce-Back Loans

  • An extension of the bounce-back loan schemes from 6 years, to 10 years. There will also be an option to make interest-only payments on these loans, or (for anyone in serious trouble) the option to suspend payments for 6 months.

Coronavirus Business Interruption Loan

  • The deadline for taking out a Coronavirus Business Interruption Loan will be 30th November 2020. The guarantee for these loans has been increased to 10 years.

 

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