Chancellor Rishi Sunak has announced a new Jobs Support Scheme to replace the furlough system as part of a winter economy plan.

The support package, which he said needed to "adapt and evolve" from previous measures, includes a similar measure for the self-employed, the extension of deadlines to repay loans, tax bills payable across a longer period and a longer VAT cut for the hospitality and tourism sector.

He said: "I know people are anxious, afraid and exhausted. There are reasons to be cautiously optimistic. We are in a very different position to March."

"The primary goal remains to protect people's jobs but the way we achieve that must evolve.

"Our economy is now more likely undergo a more permanent adjustment and our plan needs to adapt and evolve in response."

Outlining the new Jobs Support Scheme, he said: "There has been no harder choice than the decision to end the furlough scheme.

"We need to create new opportunities and allow the economy to move forward."

"I cannot save every business. I cannot save every job. No chancellor could."

The Jobs Support Scheme will support wages of people who remain in work but are doing shorter hours, enabling employers to keep them on rather than make them redundant.

Employees need to work a third of their normal hours with the Government and employers paying one third each of their remaining hours with a maximum of £697.92 per month.

The scheme, which will run for six months from November 1, will be available for all small and medium businesses and to larger firms which have seen significant losses.

"There will be restrictions on larger companies, in terms of capital distributions to shareholders while they are in receipt of money for their workers on this scheme," he said.

"And indeed they will not be able to make redundancy notices to those workers who are on this scheme throughout its duration."

He said the scheme for self-employed workers will be run on "similar terms".

An initial taxable grant will be provided for those eligible for the Self Employment Income Support Scheme and continuing to trade covering 20 per cent of monthly profits from November to January up to £1,875 a month.

A second grant will be available from February to April.

"These are radical interventions in the labour market," said the Chancellor. "We are protecting millions of jobs and businesses."

The package also announced a "pay as you grow" scheme to enable businesses to spread payments for government guaranteed loans introduced during the coronavirus pandemic.

"Businesses need every extra pound to protect jobs," he said.

The deadline to pay back Bounceback loans and Coronavirus Business Interruption Loans will be extended from six to 10 years, which the Chancellor said would nearly halve the average monthly repayments.

Payments can also be made as interest only or suspended if businesses are "in real trouble" for up to six months with no impact on credit ratings.

The application for all coronavirus loan schemes has been extended until November 30 and the Chancellor said a new loan scheme would be introduced in January.

Businesses who deferred VAT payments will no longer have to pay a lump sum in March bit will be able to split it into 11 interest-free payments over the rest of the year.

Self-assessed Income Tax payers can also spread their bill over 12 months from January.

The final announcement saw the cut in VAT from 20 per cent to five per cent for the hospitality and tourism sectors extended by two months until the end of March.

Steve Gardner-Collins from Visit Gloucestershire said the announcements would be "welcome news from the tourism and hospitality sector and all our colleagues who were worried about their jobs."

CBI director general Dame Carolyn Fairbairn said: "It is right to target help on jobs with a future, but can only be part-time while demand remains flat. This is how skills and jobs can be preserved to enable a fast recovery.

"Wage support, tax deferrals and help for the self-employed will reduce the scarring effect of unnecessary job losses as the UK tackles the virus. Employers will apply the same spirit of creativity, seizing every opportunity to retrain and upskill their workers.

"The Chancellor has listened to evidence from business and acted decisively. It is this spirit of agility and collaboration that will help make 2021 a year of growth and renewal."

And Mike Cherry, national chairman of the Federation of Small Businesses said: "The UK's small businesses are facing an incredibly difficult winter. Today's support package is the flipside of the coin to Tuesday's COVID-19 business restrictions.

"It is a swift and significant intervention, extending emergency SME loans, creating new wage support for small employers and the self-employed, and providing cashflow help on VAT deferrals and new Time To Pay for any tax bills to HMRC.

"We welcome that the Chancellor is ensuring that decisions to protect public health are informed by the need to protect the economy, people's jobs and prospects for young people in our schools and workplaces."

Keep reading Punchline-Gloucester.com for full analysis and reaction to the Chancellor's announcement