On Thursday 24 September, the Chancellor announced the Government's Winter Economy Plan – the next phase of our planned economic response to coronavirus, following the Prime Minister’s address to the nation.
There are reasons to be cautiously optimistic about the country's economic outlook: thanks to the Government's comprehensive response in March, we have seen three consecutive month of economic growth, millions of people have moved off the furlough and back to work, and consumer spending is returning.
But the resurgence of the virus threatens our recovery. Now it is clear we have to live with coronavirus for months to come, this means the economy cannot return to exactly as it looked in March and the economic rationale for the next phase of support must be different to that which came before.
So the Government is focussing on dealing with the problems businesses face right now – supporting viable jobs through a time of depressed demand:
- The Government's Job Support Scheme directly funds businesses to protect these viable jobs and people’s wages, rather than laying employees off through a difficult winter.
- The Government have also acted to minimise the strains on companies’ cashflows so they can focus their resources on supporting employment. Pay as You Grow will cut Bounce Back loan repayments by almost half by extending the loans to 10 years, the extension to our temporary VAT cut to Spring 2021 will support vulnerable hospitality and tourism businesses, and our new payment plans will allow companies to defer VAT and tax liabilities for a further year.
As of Thursday 23rd, October additional support has been announced. This will significantly increase the generosity and reach of its winter support schemes to ensure livelihoods and jobs across the UK continue to be protected in the difficult months to come, supporting jobs and helping to contain the virus.
- open businesses which are experiencing considerable difficulty will be given extra help to keep staff on as government significantly increases contribution to wage costs under the Job Support Scheme, and business contributions drop to 5%
- business grants are expanded to cover businesses in particularly affected sectors in high-alert level areas, helping them stay afloat and protecting jobs
- grants for the self-employed doubled to 40% of previous earnings
Further information on the specific schemes can be found on the relevant pages and on the gov.uk website. See here