A new jobs support scheme will launch in November to replace the outgoing furlough scheme, the Chancellor has announced.
Employees who work - and are paid - at least a third of their normal hours will be able to apply to have two thirds of their wages paid for by the Government.
The scheme will run from November for six months.
All small to medium business are eligible to apply. Larger firms can only do so if they can prove their turnover has fallen.
Rishi Sunak also said that VAT is going to stay at 5% for hospitality and tourism until the end of March, and business loans can be extended.
Speaking in the House of Commons, Chancellor Mr Sunak said:
"It is now clear for at least the next six months the virus and restrictions are going to be a fact of our life. The economy is likely to undergo a permanent adjustment. Our plan needs to adapt in response.
"There has been no harder choice then to end the furlough scheme.
"We need to create new opportunities. I cannot save every business, I cannot save every job. No chancellor could. But what we can and must do is deal with the real problems businesses are facing now."
The Jobs Support Scheme is open to all employees across the UK, including those who have not previously used the furlough scheme.
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