Chancellor Rishi Sunak has announced a raft of new measures in his Winter Economic Plan in parliament to help save jobs from a second coronavirus wave this winter.
Andrew Moorby, managing partner of MHA Tait Walker, commented: “The Chancellor announced this week that the proposed Autumn Budget would not now take place. Instead he delivered a relatively short economic update in which he announced some significant new measures in the fight to retain jobs during the pandemic.
“The measures announced are targeted to retain viable jobs and businesses. For all SMEs and for large companies suffering a decline in turnover, there is a new Job Support Scheme. If employees are retained and work 1/3rd of their full equivalent hours, their pay would be boosted. Hence an employee who would normally receive £1,000 but works 1/3rd reduced hours would receive £770 with £220 of this being paid for by the Government. This will last six months from 1 November.
“Other announcements include help for the self-employed similar to the Job Support Scheme, targeted VAT help for the travel and hospitality sectors and help with cash flow, primarily linked to longer repayment terms for existing scheme borrowings.
“The various provisions have been largely welcomed although some have queried why the provisions could not have been announced sooner. Others would have liked to see more conditions attached to the funding to promote issues of wider economic benefit, such as training.
“Given the uncertainties that we face, both in our day-to-day lives but also with our economy, it is not surprising that the Chancellor has decided not to hold a full Budget and announce long-term plans.
“Instead he has reacted to the worsening pandemic with short-term measures. Only time will tell whether the new schemes achieve their desired aims. The furlough scheme has cost £39bn, so preserving jobs is not a cheap exercise. Ensuring that we get value for money is an essential part of the proposals, but it is not easy to introduce highly targeted measures when the help is needed now.
“Whilst it is worth noting that Budgets have typically been held in March in prior years, so a postponement would not normally be an issue. This year however we must remember that the Brexit transition period ends on 31 December. The Autumn Budget was therefore important for many seeking to get some clarity about what was expected next year to allow them to plan accordingly. This opportunity has now been removed.”