‘The devil is in the detail’: Will Sunak’s plan save Norfolk jobs?
- Credit: PA
Rishi Sunak has unveiled a measured financial support package as the economy wobbles on the brink of a second potential coronavirus outbreak.
The chancellor’s Winter Economic Plan was delivered in the Commons with Mr Sunak not bowing to pressure to extend the furlough scheme.
Instead Number 11 has chosen to extend certain policies to alleviate the tax burden on businesses, as well as offering to pay a portion of wages to employees who may be impacted by another spike.
MORE: Chancellor reveals plan to save jobs by paying two thirds of lost wages Those whose hours may be hit as a result of an economic downturn will have their reduced hours paid in full by their employer. For the hours they have lost they will be paid a third by the government, and a third by their employer. This is currently offered to small and medium businesses, though the chancellor said it would be extended to larger businesses if they could prove a hit on their turnover.
The scheme will be on offer for the next six months.
The chancellor said that the scheme was partially aimed at the hospitality sector which was rocked this week by the news of a nationally enforced 10pm curfew.
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The support will offer some reprieve to the East’s visitor economy - which includes hospitality, events and attractions - worth £10 billion.
Although Mr Sunak offered a degree of financial backing, he added that he “cannot save every business”. He said: “As the economy reopens it is fundamentally wrong to hold people in jobs that only exist inside the furlough.
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We need to create new opportunities and allow the economy to move forward and that means supporting people to be in viable jobs which provide genuine security.” Mr Sunak also extended the 15pc VAT cut for tourism businesses, and extended the repayment terms for businesses who used bounce back loans from six years to ten. Shaun Davison, manager at accountancy firm Lovewell Blake, said that overall Mr Sunak’s policies had been both “supportive” and “honest”.
MORE: New takeaway bringing ‘potato surprise’ to Norwich “Rishi has said throughout the pandemic that he can’t save every job and every business, but I think the Job support Scheme announced today will save thousands of roles,” he added. “People still stand to lose a third of their salary on the hours they don’t work. There will be some people concerned about how they’re going to put food on the table. As ever, we’ll have to see how the scheme pans out and what happens with the economy.”
But for some businesses paying a third of wages for hours not worked - which may outweigh the amount of hours worked by the employee - it could be a hard sell. “There will be some employers who can’t afford to pay staff for hours they’re not working which will result in losses and redundancies. But I suspect there will be businesses willing to pay that wage to retain their staff,” Mr Davison said.
Chris Sargisson, chief executive of the Norfolk Chambers of Commerce, said that the chancellor may need to go further. “With almost 40pc of firms saying they have three months cash in reserve or less, the extension of business lending schemes, more flexible repayment terms for loans, and tax forbearance measures should lessen the immediate pressure and provide reassurance for many affected firms at a challenging time,” he said.
“The chancellor must remain open to taking additional action to support parts of the economy particularly those in hospitality who face unprecedented challenges over the months ahead.”
People who are self-employed also face a slash to their incomes if they rely on government aid - with the grant being slashed to just 20pc of average monthly profits.
Andy Chamberlain, the director of policy at the Association of Independent Professionals and the Self-Employed (IPSE), said the support for self-employed people is “woefully inadequate”.
He said: “Limited company freelancers and the newly self-employed almost entirely missed out on support in the last lockdown and have faced bleak months of financial devastation.
“Now they face a dark winter ahead unless the government does more for them.” Mr Davison added: “With these things as ever the devil is in the detail. Self-employed people will now only receive a grant of up to £1,875 which is considerably lower than previously and will be a concern heading into the winter months.”