Nearly three million workers - or 12 per cent of the UK's workforce - are currently on partial or full furlough leave, the BBC reported.
The new Jobs Support Scheme will replace the existing furlough or Jobs Retention Scheme, which saw the government bear the burden of wages for workers sent on furlough, or forced leave, during the peak phases of the lockdown to curb the spread of the coronavirus pandemic.
That scheme is set to end on October 31 and therefore Sunak's new economic plan is intended to cover a six-month period from November, during which time wider restrictions on businesses are likely to remain in place in an effort to control a second wave of the pandemic.
"There has been no harder decision than to end the furlough scheme," said Sunak.
The minister stressed that the scheme provided short term protection during the "acute" phase of the crisis, but it is "wrong" to keep jobs going that can only survive in furlough.
Instead, people should be supported in "viable" jobs, which is where his new set of measures come in.
The new Jobs Support Scheme will support those who are in work "on shorter hours rather than making them redundant".
Employees must work at least a third of their normal hours and be paid as normal and the government will then top up, covering two-thirds of pay lost by reducing hours.
The employee will then keep their job, said Sunak.
He also sought to highlight that the responsibility of bearing the costs of the pandemic cannot be held by the government alone.
It is shared by all and paid by all It is on all of us and we must learn to live with it and live without fear," he said.
All small and medium companies will be able to access the new support schemes, with larger ones also eligible if they can show that their turnover has fallen due to the coronavirus crisis. And, the grant for self-employed workers has also been extended on similar terms.
Further steps include an extension of so-called bounce-back loans for struggling businesses, which will be paid back through a "pay as you grow system extending the loan terms from six to 10 years.
It will enable businesses that are struggling to make interest-only payments or suspend payments completely for six months. Other loan schemes will also have terms extended to 10 years, with a new "successor" loan guarantee programme to begin in January.
Businesses will also be given more time and flexibility on their tax deferrals, with the Value Added Tax bill spread over 11 smaller repayments.
The minister also further extended a VAT cut for the hospitality and tourism section until March next year.
The cut from 20 per cent to 5 per cent which came into force in mid-July had been due to expire on January 12, 2021.
The economic plan comes as the UK Treasury has decided to defer its usual Autumn Budget statement, which was due in the coming weeks, amid the ongoing coronavirus health and economic crisis.
The Opposition Labour Party has broadly welcomed the new set of measures to protect jobs but criticised the government for lagging behind on offering this wage support.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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