Four key things in Rishi Sunak’s announcement you need to know about

Chancellor Rishi Sunak has today, September 24, announced the government’s “winter economy plan”.

Speaking in the House of Commons, the Chancellor outlined the plan to deal with the next stage of their economic plan to deal with the coronavirus crisis.

This involves nurturing the recovery by protecting jobs through the difficult winter months.

Mr Sunak explained: ”The underlying rationale for the next phase of economic support must be different to what came before.

"The primary goal of our economic policy remains unchanged – to support people's jobs – but the way we achieve that must evolve."

Here are four key things in Mr Sunak’s announcement you need to know about.

Jobs Support Scheme

One of the biggest wins was that he confirmed plans for the state to top up the wages of workers forced to cut their hours due to the pandemic.

The jobs protection scheme is aimed at protecting “viable” roles, rather than all the roles which had been kept going due to the furlough scheme.

Under the new scheme, the government will top up the wages of people working at least a third of their normal hours.

Their employer will pay for the hours they work, and the government will cover two-thirds of the pay they have lost.

Mr Sunak added that the support would be targeted at “firms that need it the most”, and it will be open to all employers, even if they didn’t use the furlough scheme previously.

Self Employed Scheme grant extended

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The Chancellor has also said that the Self Employed Income Support Scheme grant will be extended.

Mr Sunak told MPs: "Throughout this crisis we have sought parity between employees and the self employed, providing more than £13billion of support to 2.6million self-employed small businesses.

"So I am extending the self-employed grant on similar terms and conditions as the Jobs Support Scheme."

Pay as you Grow scheme

Sunak has also unveiled a "pay as you grow" scheme for businesses which took government-guaranteed loans during the pandemic.

He said: "Loans can now be extended from six to ten years nearly halving the average monthly repayment."

The Pay as you Grow loans will be introduced to give these firms more time to repay the loans, up to 10 years.

The government is also starting work on a new guarantee loan programme to begin in January.

All state-backed loan schemes will be extended until the end of November 2020.

VAT cut extended

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VAT will be kept at 5% for hospitality and tourism, instead of the planned increase to 20%.

Speaking in parliament, he said: ”The final step I'm taking today will support two of the most affected sectors, hospitality and tourism.

“On current plans, their VAT rates will increase from 5% back to the standard rate of 20% on January 13.

“So to support more than 150,000 businesses and help protect 2.4 million jobs through the winter, I'm announcing today that we are cancelling the planned increase and will keep the lower 5% VAT rate until March 31 next year.”

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