Sunak Unveils Winter Jobs Scheme; Unemployment Still Expected to Rise

Chancellor of the Exchequer Rishi Sunak has announced a winter jobs scheme designed to assist struggling workers during the pandemic by paying them a portion of lost hourly wages.

The winter jobs scheme was created to boost employee retention and will be replacing the furlough scheme.

This autumn, unemployment is expected to rise when the furlough scheme ends in October and more vigorous restrictions will be implemented as COVID-19 cases climb. The winter jobs scheme is Sunak’s fundamental plan for keeping struggling workers’ heads above water during the expected worsening of the pandemic and heightened economic restrictions. 

How Does the Winter Jobs Scheme Work?

The winter jobs plan works by supplementing income for workers losing wages during the pandemic, The Guardian reported. Many employees will be working fewer hours due to pandemic restrictions, so the government will cover one-third of workers’ hourly salary for each hour lost.

The jobs scheme will be in operation for six months, starting 1 November, and was constructed to conserve employee positions in companies that are challenged with lower demand this winter as a result of the coronavirus pandemic. The winter jobs plan is designed to keep more employees from losing jobs if employers are struggling to keep them. 

Firms will still pay employees for the hours worked, but the cost will be split to keep costs down for struggling businesses: The employer will pay a portion and the government will chip in a portion. The employee will face a wage reduction but will be able to keep their job.

For lost hours, the government will pay 33% of wages up to a cap, and the employer will also be contributing 33%. Employees will be guaranteed at least 66% of their wages.

Who is Eligible for the Winter Jobs Plan?

According to The Guardian, to be eligible for the winter jobs plan employees cannot have been given a redundancy notice. Employees must work at least a third of their normal hours for the first three months of the winter jobs scheme. After three months, the government will access whether or not to extend the threshold further.

Employees who benefit from the winter jobs scheme will be allowed to periodically go on and off the jobs scheme and there are no requirements about working the same schedule every month. However, each short-term working schedule must cover at least seven days.

All small and medium-sized enterprises with a British bank account and are part of PAYE, HM Revenue and Customs’ system to collect income tax and national insurance, will be qualified for the winter jobs plan.

In order to be eligible, large businesses will have to prove their business has been negatively affected by the coronavirus pandemic by showing their turnover has been fallen by 33%, according to The Guardian.

Is the Job Scheme Foolproof?

In spite of the winter jobs plan, people still have concerns.

If businesses are forced to close due to coronavirus constraints, workers may not be able to work any hours, and in that case, the jobs scheme will be of no help.

According to the BBC, the Resolution Foundation warns Sunak’s jobs scheme will likely slow the rate of job loss, but stopping the unemployment rise could be near impossible.

The chancellor said he has high hopes for the new scheme, stating that it may “benefit large numbers” of employees, but it will not “save every job,” the BBC reported.

But the warnings of the Resolution Foundation assert that if companies have to still pay employees for unworked hours that they will not have any incentive to use the jobs scheme. Therefore, firms may just let employees go instead. 

Do you think the winter jobs plan will reduce unemployment? Share how you feel in the comments.

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