There has been a general welcome for a new scheme to try and protect jobs as the Government's furlough scheme is phased out.

The Chancellor of the Exchequer Rishi Sunak has revealed a job support scheme which will come into place at the end of October when the Job Retention Scheme comes to an end.

Workers will need to work at least a third of their normal hours to qualify. Their employer will pay normal wages for those hours.

Of the remaining two-thirds of each worker’s usual pay, the employer will pay 33 per cent and the Government will pay 33 per cent, meaning that the worker will receive 77 per cent of their usual monthly wage in total. The Government will be paying 22 per cent, capped at a maximum £697.72 a month. The employer will pay 55 per cent.

The new job support scheme will be targeted at small and medium-sized firms, with larger companies only eligible if turnover has fallen due to the crisis.

The existing self-employed grant will be extended on similar terms and conditions as the new job support scheme.

The temporary 15 per cent VAT cut for tourism and hospitality will be extended until the end of March.

A new payment scheme will give more breathing space for more than £30 billion of deferred VAT payments, allowing businesses to make 11 interest-free payments in 2021 to 2022 rather than a lump sum at the end of March.

A "pay as you grow" measure will extend the repayment terms for bounceback loans from six to 10 years.

Firms which have taken out coronavirus business interruption loans will see the Government guarantee extended for up to 10 years.

All loan schemes will be extended until the end of the year.

Cumbria Chamber of Commerce chief executive Rob Johnston said: “We were very worried about the end of the furlough scheme. South Lakeland and Eden had the highest proportion of furloughed workers in the country so Cumbria is really exposed.

“A British Chambers’ survey revealed that a third of businesses were planning to shed workers when the scheme ends. Cumbria’s already seen unemployment double since lockdown and it would certainly have gone a lot higher.

“The new scheme isn’t as generous but it’s a lot better than doing nothing and it will reduce job losses. It won’t save businesses beyond the point of no return but it will help those that have a future to make a go of it.

“There are a lot of self-employed businesspeople in Cumbria so we’re pleased that he’s extended the Self-Employment Income Support Scheme.

“The tweaks to the loan schemes and the extra time to repay deferred tax will help with cashflow, which is probably the number one issue for businesses.

“And extending the five per cent VAT rate for hospitality until March 31 – it was due to end in January – will help the sector get through what’s going to be a tough winter.

“Overall, we’re relieved that he’s acted and welcome what he’s done. It works particularly well for Cumbria. However, he will need to do more if the Government tightens lockdown restrictions further.”

Jason Berry, co-director of the Odd Frog Tapas and Live Lounge, in Duke Street, Barrow, said it had about nine members of staff currently on flexible furlough. 

“I was expecting it to end at the end of October so we had prepared for that,” he said.

“It is good that they are doing it and it’s important to tail it off. It’s probably the right thing to do in difficult times.

"It’s one of those things where we need to look at other ways rather than staying on furlough. Probably what we are going to see is people shifting between sectors and moving from one to another - I think that’s inevitable.”

Stephen Hargreaves, chief executive of Hargreaves Enterprises, which incorporates Bowness bars the Fizzy Tarte, Baha and the Lake View Garden bar, welcomed the move on VAT and loans. 

However, he said the job support scheme would do little to get staff back into work in venues that were either closed already or were operating at a reduced capacity and did not need the workers. 

His bars currently have no staff on furlough. 

However, he said in the quiet winter season the company may be able to open venues on a reduced number of days and use the scheme to pay staff for this time. 

"It might be cost effective to open on busy days and close on quiet days and use the scheme a little bit to cover your costs," he said. 

Gill Haigh, managing director of Cumbria Tourism, said: “The devil is in the detail, but we are pleased that today’s statement acknowledges the very specific challenges for the tourism sector, given that businesses were unable to open for almost four months in the usually buoyant summer season and are now facing the longer-term impact of a £1.5billion loss to Cumbria’s tourism industry amid continuing restrictions and uncertainty.

“Initial responses from our member businesses suggest the new measures should have a positive effect on cashflow for many tourism operators.

"The continued reduction in VAT will be particularly welcomed, there is good news for those who have taken out Coronavirus Business Interruption Loans and it’s great to see employers being actively supported to bring people back to work.

"We are certainly looking forward to hearing more detail about today’s announcement, particularly around the new successor loan scheme planned for January.

“At the same time, we need to recognise that there are concerns it may be too late for some businesses, and some will continue to find it difficult to access the new measures. There is also a question mark over what happens if there is another national lockdown and this is something we will be monitoring closely.

“Cumbria Tourism’s research team will be continuing its in-depth business tracker research over the coming months to ensure we have strong, up-to-date information about the impact of the new measures.

"We can then use this evidence to directly inform national decision-makers and make the strongest possible case for Cumbria if additional targeted support is needed further down the line.”

Henri Murison, director of the Northern Powerhouse Partnership, said the measures would help "avoid the worst excesses of viable job losses due to the crisis".

“This will play a critical role in helping many people and businesses across the country but will not be enough to achieve true economic rebalancing, which is key to turning levelling-up into a reality - rather than simply rhetoric.

"More commitment to long-term investments, such as decarbonisation through small modular reactors or transport infrastructure like Northern Powerhouse Rail, will be crucial.

"Boosting confidence and certainty on projects such as these are necessary to underpin and unlock vital private investment."