Watch with Rishi: Chancellor answers questions from public on Covid and the economy in soft-focused sit down
- Rishi Sunak answered questions from members of the public in Twitter session
- The Chancellor was probed about ‘whose money the government is spending’
- He discussed fresh financial package which follows the Covid furlough scheme
The Chancellor today addressed the country’s burning questions as he discussed his fresh financial package in a Twitter Q and A session.
Rishi Sunak turned on the public spending taps again last week when he announced an emergency bailout for businesses and the self-employed that will cost up to £22billion.
But today he was grilled by members of the public who felt they’d been left in the dark ahead of what is set to be a gruelling winter for their businesses.
How the New Job Support Scheme will work
Workers at firms legally forced to close by coronavirus regulations will receive two-thirds (67 per cent) of their salary under expanded Job Support Scheme (JSS).
This is all paid for by the Treasury to the company, capped at £2,100 per worker.
Now employers will only face paying National Insurance and pension contributions, but the treasury believes this will impact only a very small number of firms.
Businesses will be able to claim the grant when they are subject to restrictions and employees are off work for at least seven consecutive days.
To be eligible you have to have been on the PAYEpayroll at the firm on September 23 this year.
The scheme will launch on November 1 and run for six months, with a review in January. Details of how businesses can apply are yet to be revealed.
The Government said that it would cover ‘businesses that are required to provide only delivery and collection services from their premises, or food and drink outdoors from their premises.
The Government’s original furlough scheme is due to end later this month and saw the Government pay 80 per cent of a worker’s wages up to a monthly cap of £2,500
The original JSS plan saw firms eligible to pay staff all of their wages for time they worked and a third of their wages for time they were off, with the Treasury covering another third, or 22 per cent of the total.
To be eligible, workers would have to work at least a third (33 per cent) of their regular hours. In this scenario, a worker would receive 77 per cent of their total wages, with the firm picking up 55 per cent. The Government contribution would have been capped at £697.92 a month.
So, if a bar worker earns £10-per hour and works 40 hours a week, he or she usually takes home £400 before tax.
Under Rishi Sunak’s original JSS scheme they would have to work a minimum of 13 hours a week. For those 13 hours they would be paid £308. Of that, their employer pays £220 and the Treasury £80.
Under the new revised scheme, they would be paid £268, all paid by the Treasury, for as long as the business remains closed.
Mr Sunak was probed about ‘whose money the government was spending’ and asked what he will do to protect the livelihoods of those in the events industry.
The Chancellor was asked by Twitter user Sara Zigman, ‘Whose money are you spending?’
Mr Sunak responded: ‘Excellent question! The simple answer is, your money!’
He continued: ‘The government is not some entity that has its own money, the government only has money because people pay taxes and we borrow money – that’s how we fund what we do.
‘That’s why I’m careful with how we spend money. It’s why often I will say, look, we can’t do absolutely everything that people want.
‘There are obviously limits. We have done a lot this year, we have spent an enormous amount, we have borrowed an enormous amount on everyone’s behalf.’
The Chancellor added: ‘I never foresaw having to do anything like this when I got this job.’
Using the hashtage ‘#AskRishi’, people were invited to submit their question to the Chancellor.
Josh Skorczewski asked: ‘Why are we over a week into tier 3 local restrictions with still no support at all for businesses who have closed or lost most of their work due to the restrictions?’
Gary Langlands, who works in the events industry, said: ‘We have been unable to work since March and not eligible for hardship grants or any further grants PLUS no furlough from 1st November.
‘We can’t work due to gatherings restrictions so no 20% from new JSS. £84bn sector and 1.5m people in sector!’
As he pointed towards the support scheme, Mr Sunak responded: ‘I know how difficult a time this is for your industry, and what an amazing industry it is.
‘We all are looking forward to a time when we’re thriving again with events and conferences, festivals etc – I think that will be a great day.’
Last week, Mr Sunak announced his emergency bailout to keep business afloat and head off a jobs bloodbath this winter.
The Chancellor’s fresh financial package was hailed a lifeline for firms under Tier 2 lockdowns such as London which were previously ineligible for Government support.
In a statement to the House of Commons, he unveiled the three-pronged funding blizzard.
Mr Sunak said grants of up to £2,100 a month will be offered to Tier 2 companies that are not forced to close but are struggling to be commercially viable.
Some 150,000 businesses are estimated to qualify for the payments, which could cost the Treasury £1.2billion.
The Job Support Scheme, which will replace furlough, will be extended to firms that are legally allowed to open.
It will be made more generous so employers will only have to pay 5 per cent of staff wages, while the minimum threshold for hours worked will be slashed to just one day.
If two million people enroll, the pledge could cost the Treasury £6billion.
Mr Sunak was probed about ‘whose money the government was spending’ and asked what he will do to protect the livelihoods of those in the events industry
Finally, Mr Sunak increased grants given to self-employed workers to 40 per cent of the average profits, up to a maximum of £3,750 a month, which could cost about £3billion.
The Chancellor prepared to dip deeper into the Treasury’s coffers as Government borrowing was revealed to be running at £1billion a day during the pandemic.
Explaining why he has been forced to introduce extra measures just weeks after setting out his winter economy plan, Mr Sunak told MPs that even businesses which can stay open are facing ‘profound economic uncertainty’.
The Chancellor said hospitality chiefs have given a clear message that ‘the impact of the health restrictions on their businesses is worse than they hoped’.
In the Commons, Mr Sunak acknowledged the strain the second wave of the virus had placed on communities living under coronavirus curbs and warned of ‘difficult days and weeks ahead’.
The Chancellor today addressed the country’s burning questions as he discussed his fresh financial package in a Twitter Q and A session
Who can apply for the bailout schemes and how?
Jobs Support Scheme
The scheme will be open from 1 November until the end of April 2021.
Employers will be able to make a claim online through Gov.uk from December.
The subsidies for wages will be paid by the government on a monthly basis, in arrears.
They will be issued with grants after payment to the employee has been made and reported to HMRC via an RTI return.
The grants to the self-employed are being provided through HMRC, and they are running a claiming service.
To be eligible people must have completed a 2018 to 2019 Self Assessment tax return, and have trading profits of no more than £50,000.
If individuals are not eligible based on the 2018-2019 tax return, previous years can be considered.
The next grant will cover from November to January, and after that from the start of February until the end of April.
The first will be set at 40 per cent of average profits, up to the ceiling, and HMRC will review the level of the second grant ‘in due course’.
The grants are subject to Income Tax and National Insurance Contributions.
Firms will be able to apply to local authorities for grants of up to £2,100 per month if they have been ‘severely impacted’ by lockdown curbs, but not formally closed.
Town halls will receive funding based on the number of hospitality, hotel, B&B, and leisure businesses in their area.
For properties with a rateable value of £15,000 or under, grants will be £934 per month; rateable values of between £15,000 and £51,000 will receive £1,400 per month; and at £51,000 grants will be £2,100 per month.
That is equivalent to 70 per cent of the grant amounts given to legally closed businesses.
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