The British Chambers of Commerce’s (BCC) Director General, Adam Marshall, has welcomed the Chancellor Rishi Sunak’s announcement of a Winter Economic Plan, including a new raft of measures to support businesses and the economy as the pandemic continues.
Dr Marshall said: “The measures announced by the Chancellor will give business and the economy an important shot in the arm. Chambers of Commerce have consistently called for a new generation of support to help protect livelihoods and ease the cash pressures faced by firms as they head into a challenging and uncertain winter.
“The Chancellor has responded to our concerns with substantial steps that will help companies preserve jobs and navigate through the coming months. The new Jobs Support Scheme will help many companies hold on to valued, skilled employees. Businesses will be eager to see the detail and consider whether and how they will be able to use the scheme.
“The Chancellor has listened to our consistent calls for an extension of business lending schemes, more flexible repayment terms for loans, and tax forbearance measures. With almost 40% of our firms saying they have three months cash in reserve or less, this will lessen the immediate pressure and provide reassurance for many affected firms at a challenging time.
“The Chancellor must remain open to taking additional action to support parts of the economy facing unprecedented challenges over the months ahead. Chambers of Commerce across the UK will continue to work with Government to ensure the benefits of these schemes are delivered to firms on the ground.”
The new Jobs Support Scheme will be launched on November 1 to replace the furlough scheme when it ends on October 31. The Chancellor said the Government and firms would top up workers’ wages (up to a cap) covering up to two-thirds of their hours for the next six months.
Employees will need to work for at least a third of their normal hours to qualify. So for someone on £2,000 a month working half their hours, they would receive £1,000 normal pay plus £333 extra from their employer and £333 from the Government.
The similar self-employed support scheme will also be extended by six months from November 1.
In addition, the Chancellor announced:
- A new ‘Pay as you Grow’ Scheme enabling firms which took Government-guaranteed loans to extend them from six to 10 years to lower monthly repayments. Six months payment breaks also introduced
- VAT cut for hospitality and tourism companies will be extended until March. The cut from 20% to 5% VAT – which came into force on July 15 – had been due to expire on January 12 next year
- Companies that deferred their VAT bill will no longer have to pay a lump sum in March. They will have the option to repay it in smaller amounts over 11 months