RISHI Sunak has been warned that his new six-month coronavirus job support scheme will not be enough to stop many jobs being lost.

The new billion pound programme, which will ultimately replace the Government’s furlough scheme, will see the state and employers jointly top up the wages of staff.

But the plan, which comes into force in November, will be targeted at small and medium-sized firms with fewer than 250 employees. Larger companies will only be eligible if they can show their turnover has been hit as a result of coronavirus. And, crucially, it will only be workers in “viable” jobs.

Under the scheme, an employee doing a third of their normal hours will still receive 77% of their usual pay, up to a cap.

A third of their wages (33%) will be paid by their employer, with the remaining 44% split evenly between the company and the Government.

However, the Treasury’s contributions will be limited to £697.92 per worker per month.

It’s far less generous for workers, and far less costly to the Treasury than the current furlough scheme which runs out at the end of October.

Sunak said yesterday that the Tory Government found it “fundamentally wrong” to keep people in jobs that can only exist due to state funding.

Other measures in the package include an extension of the VAT cut for tourism and hospitality and more flexible terms for the repayment of Government-backed loans.

The Chancellor also extended the self-employment income support scheme and suggested a similar grant will be introduced.

A “pay-as-you-grow” plan will see the repayment period for business loans, including the Bounce Back and Coronavirus Business Interruption Loan Scheme, extended.

New plans are due in January, and firms will have up to 10 years to pay off the debt.

The temporary cut in VAT from 20% to 5% for food, non-alcoholic drinks and accommodation, which was due to end on January 12, will now be extended until the end of March.

The Chancellor told MPs: “Our economy is now likely to undergo a more permanent adjustment. The sources of our economic growth and the kinds of jobs we create will adapt and evolve to the new normal. And our plan needs to adapt and evolve in response. Above all, we need to face up to the trade-offs and hard choices coronavirus presents and there has been no harder choice than to end the furlough scheme.

“The furlough was the right policy at the time we introduced it, it provided immediate short-term protection for millions of jobs through a period of acute crisis.

“But as the economy re-opens it is fundamentally wrong to hold people in jobs that only exist inside the furlough scheme.”

He said the scheme will cover “two-thirds of the pay they have lost by reducing their working hours”.

Labour Shadow chancellor Anneliese Dodds said the package of measures “comes too late for many people who have already lost their jobs”.

The SNP’s Treasury spokesperson Alison Thewliss said her party was glad that the Tories had finally accepted the need to extend support.

“He is coming very late in the day to do this,” she added. “And it is little comfort to those who have already lost their jobs due to the impending ending of the furlough scheme.”

“Coronavirus is not done with us yet,” she warned. “Hospitality, travel and tourism, aviation, exhibitions, culture and performing arts and even travelling showpeople, and a host of others, cannot go back to normal work because this Government has placed restrictions on their businesses.

“Those jobs, those businesses are viable and it’s not for him to decide the viability of businesses.”

Paul Johnson, the director of the highly respected IFS think tank, said the new support scheme was “a significant new intervention from Government”.

But he warned that it might not be enough. He added: “It is significantly less generous than the furlough scheme it replaces, though remarkably the Chancellor provided no indication of the likely cost of the scheme.

“He is trying to plot a difficult path between supporting viable jobs while not keeping people in jobs that will not be there once we emerge from the crisis. With employers now having to pay at least 55% of the normal wages of their employees, it is clear that many jobs will be lost over the coming months.”

Boris Johnson wasn’t in the Commons for the statement, raising speculation he disagreed with his Chancellor. In a later interview he insisted there was no difference of opinion over the proposed measures: “Of course I fully support the package of measures we’ve jointly drawn up,” he said.