Chancellor reveals new jobs support scheme and cashflow support for businesses
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Chancellor Rishi Sunak has revealed his plans to support businesses and jobs through the winter.
He revealed a new jobs support scheme and the relaxation of some tax and loan repayments for businesses.
Sunak, who only became Chancellor in February, acknowledged he “cannot save every business, cannot save every job” but said he wanted to deal with the problems businesses are facing now.
He said: “Our task is to move to the next stage of our economic plan, by nurturing the recovery by protecting jobs through the difficult winter months.
“The primary goal of our economic policy remains unchanged – to support people’s jobs. But the way we achieved that must evolve”.
The jobs support scheme “will support viable jobs”, the Chancellor said, and is being brought in as a follow-up to the furlough scheme which ends next month.
However he said it is “fundamentally wrong” to keep people in jobs that only exist because of the furlough scheme.
The jobs support scheme will require employees to work at least one-third of their hours and to be paid as normal, and the Government and employers will cover the remaining two-thirds. The details will be provided in Government guidance that will be released shortly.
The scheme can be accessed by all SMEs and by larger businesses that have seen their turnover fall during the Covid-19 crisis, even if they haven’t previously used the furlough scheme.
The Chancellor is also extending the self-employed grant “on similar terms and conditions” to the new jobs support scheme.
There were also measures announced to help businesses with cashflow.
Tax bills which had been deferred to March 2021 will no longer need to be paid in full by the end of the financial year, but can now be spread over 11 smaller repayments.
There was also targeted support for the hospitality and tourism sectors. The lower 5% VAT rate will now be extended from January 13 to March 31, 2021.
Bounceback loan repayment periods will be extended from six to 10 years, with repayment holidays available. The Government guarantee for CBILS loans will also be extended to 10 years, giving lenders flexibility.
He also revealed there are plans for a successor loan programme that is set to begin in January.
CBI director-general Dame Carolyn Fairbairn, who met with Sunak and TUC general secretary Frances O’Grady before the Chancellor’s statement in Parliament, said: “These bold steps from the Treasury will save hundreds of thousands of viable jobs this winter.
“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.
“The Chancellor has listened to evidence from business and unions, acting decisively. It is this spirit of agility and collaboration that will help make 2021 a year of growth and renewal.”