The move comes after the cancellation of the Autumn Budget and will see the replacement of the existing furlough scheme with a Jobs Support Scheme from November 1.
The new scheme will run for six months and see the government contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.
Employers will continue to pay the wages of staff for the hours they work – but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.
This means employees who can only go back to work on shorter time will still be paid two thirds of the hours for those hours they can’t work.
In order to support only viable jobs, employees must be working at least 33% of their usual hours.
The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme.
It is designed to sit alongside the Jobs Retention Bonus and could be worth over 60% of average wages of workers who have been furloughed – and are kept on until the start of February 2021.
Businesses can benefit from both schemes in order to help protect jobs.
The Government is also continuing its support for the self-employed by extending the Self Employment Income Support Scheme Grant (SEISS).
An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus.
The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875.
Companies who took out a Bounce Back Loan will be given more time to pay back the money with the time frame extended from six years to ten.
Coronavirus Business Interruption Loan Scheme lenders will also now extend the length of loans from a maximum of six years to ten years.
Sunak said: “The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery.
“Our approach to the next phase of support must be different to that which came before.
“The primary goal of our economic policy remains unchanged – to support people’s jobs – but the way we achieve that must evolve.”
For full details of the plan click here.