Rishi Sunak reached out to the House of Commons today to set out his plans to replace the vacation program after it ends in October.
The Chancellor, who canceled this year’s budget to focus on the impact of the pandemic on the economy, announced new financial measures to help individuals and businesses.
Its Winter Economy Plan also reportedly includes VAT cuts, loans to hard-hit businesses, and wage subsidies.
The government and business could share the cost of increasing wages for workers who can only work part-time due to the pandemic.
Here is Chancellor Rishi Sunak’s full statement to MPs
“Mr. Spokesman, thank you very much for giving me permission to make this statement in front of the house today.
“Earlier this week, the Prime Minister outlined the next phase of the government’s health response to the coronavirus.
“Today I want to outline the next phase of our planned economic response.
“The House will be reassured to know that I have plans to protect jobs and the economy over the winter.
“Plans that aim to strike the right balance between fighting the virus and protecting the jobs and livelihoods of millions of people.
“Mr. Spokesman, I know that people are concerned and anxious and exhausted about the prospect of further restrictions on our economic and social freedoms.
“I share these feelings, but there are reasons to be cautiously optimistic.
“We are in a fundamentally different position than in March.
“And we now know a lot more about this virus.
“The public awareness of the risks and their mitigation is far greater.
“And we have kept our promise to give the NHS everything it needs, with significant new funding for NHS capacity and PSA, and I can tell the House today that we now have over £ 12 billion for testing and tracing have provided.
“Economically, we have seen growth for three months in a row, even though our production is well below February.
“And millions of people left their vacation and went back to work.
“But the virus resurgence and the steps we must take to respond to it pose a threat to this fragile economic recovery.
“Our job now is to move to the next stage in our economic plan and encourage recovery by protecting jobs during the difficult winter months.
“Mr. Spokesman, the underlying rationale for the next phase of economic support must be different from the previous one.
“The main objective of our economic policy remains unchanged: to support people’s jobs.
“But the way we do that needs to evolve.
“Back in March we were hoping that we would face a temporary interruption.
“In response, we have deployed one of the world’s most generous and comprehensive economic plans with £ 190 billion in support to people, businesses and public services to protect our economic viability.
“It is now clear, as the Prime Minister and our scientific advisors have said, that the virus and the restrictions will be a fact in our lives for at least the next six months.
“Our economy is likely to see a more permanent adjustment now.
“The sources of our economic growth and the types of jobs we create will adapt to the new normal and evolve.
“And our plan has to adapt and develop accordingly.
“Above all, we have to face the compromises and difficult decisions that the coronavirus brings with it.
“And, Mr. Spokesman, there was no more difficult choice than deciding to end the vacation program.
“Vacation was the right policy when we introduced it.
“It provided immediate, short-term protection for millions of jobs in a time of acute crisis.
“But with the economy reopening, it is fundamentally wrong to keep people in jobs that only exist while on vacation.
“We need to create new opportunities and allow business to move forward. That means helping people create viable jobs that offer real security.
“As I said during this crisis, I cannot save every company.
“I can’t save every job.
“No chancellor could.
“But we can and must address the real problems companies and employees are facing now.
“The problem in March was that we ordered businesses to close.
“In response, we paid people to stay home and not work.
“Today the problem is different.
“Many companies operate safely and profitably, but face uncertainty and lower demand during the winter months.
“These companies need support to get people back to work and protect as many viable jobs as possible.
“That’s why I’m announcing the new Jobs Support Scheme today.
“The government will directly support workers’ wages and enable companies with depression to keep employees in shorter hours instead of firing them.”
“The Jobs Support Scheme is based on three principles.
“First, it will support viable jobs.
“To ensure this, employees must work at least a third of their normal working hours and be paid for this work as usual by their employer.
“The government will then work with employers to raise these people’s wages by reducing their working hours by two-thirds of the wages they lost.
“And the employee will keep his job.
“Second, we will target support to the companies that need it most.
“All small and medium-sized businesses are eligible.
“But bigger companies only if their sales have fallen due to the crisis.
“Third, it is open to employers across the UK even if they have not previously used the leave scheme.
“The program will run for six months from November.
“And employers who keep employees on leave for shorter periods of time can take advantage of both the Jobs Support Scheme and the Job Retention Bonus.
“During this crisis we have sought equal opportunities for workers and self-employed to help more than 2.6 million self-employed small businesses worth more than £ 13 billion.
“So I am expanding the existing self-employed scholarship on similar terms to the new job support program.
“These are radical interventions in the UK labor market. A policy that we have never tried in this country.
“Together with the Job Retention Bonus, the Kickstart program for young people, tens of billions of pounds to create jobs, new investments in training and apprenticeships, we are protecting millions of jobs and businesses.
“If we want to protect jobs this winter, the second big challenge is helping companies with cash flow.
“For the past six months we have supported the business with tens of billions of pounds of tax deferrals and generous government-sponsored loans.
“These guidelines were a lifeline.
“But right now, businesses need every extra pound to protect jobs instead of paying back loans and tax deferrals.
“So today I’m taking four more steps to make this happen.
“First, bounce back loans have given over a million small businesses a £ 38 billion boost to survive this pandemic.
“To give these companies more time and flexibility to repay their loans, we’re introducing Pay As You Grow.
“Loans can now be extended from six to ten years – almost half the average monthly repayment;
“Companies that have problems can now only make interest payments.
“And anyone in real trouble can request that repayments be suspended for up to six months altogether.
“No company that accepts Pay As You Grow is going to hurt its creditworthiness.
“Second, I’m also changing the terms of our other loan programs.
“More than 60,000 small and medium-sized companies have now taken out Coronavirus Business Interruption Loans.
“To help them, I plan to extend the government guarantee on these loans by up to ten years so that lenders can give people more time to repay.
“I am also extending the deadline for all of our loan programs to the end of the year. And we are starting work on a new follow-up loan program due to begin in January.
“Third, I want to give companies more time and flexibility with their deferred tax invoices.
“Almost half a million companies deferred over £ 30 billion in sales tax this year.
“According to current plans, these payments are due in March.
“Instead, I will allow companies to split that VAT invoice into 11 smaller repayments without paying interest.
“And any of the millions of self-assessed income taxpayers who need extra help can now also extend their outstanding tax bill for 12 months from next January.
“The final step I take today will support two of the most affected sectors: hospitality and tourism.
“Under current plans, sales tax rates will increase from 5% back to the standard 20% on January 13th.
“To support more than 150,000 businesses and protect 2.4 million jobs over the winter, I announce today that we will cancel the planned increase and maintain the lower 5% VAT rate through March 31st next year.
“Today’s actions mark an important development in our approach.
“Our lives can no longer be put on hold.
“Since May we have taken steps to liberate our economy and society.
“We did these things because life is more than just existing.
“We find meaning and hope through our friends and family, through our work, through our community.
“People were not wrong to want this meaning, to strive for normalcy, and neither was the government wrong to want this for them.
“I said in the summer that we have to endure the uncertainty of the moment and live with it.
“This means learning our new frontiers as we go.
“Because the truth is the responsibility of fighting the coronavirus, the government cannot take responsibility alone.
“It’s a collective responsibility shared by everyone.
“Because everyone pays the costs.
“We have spoken so many times about this virus in terms of lost lives.
“But the price our country pays is higher.
“The government has done a lot to mitigate the effects of the terrible trade-offs between health, education and employment.
“And when we think about the next few weeks and months, we have to consider all of these costs.
“As such, it would be dishonest to say that there is now a risk-free solution.
“Or that we can dictate behavior to such an extent that we lose all sense of personal responsibility.
“What was true at the beginning of this crisis remains true now.
“It’s up to all of us.
“And we have to learn to live with it and live without fear.
“I recommend this statement to the house.”