Swindon MPs Robert Buckland and Justin Tomlinson have welcomed the Chancellor’s announcement today of a Winter Economy Plan.
The plan is the next phase of the government’s planned economic response to Coronavirus, following the Prime Minister’s address to the nation.
Announcing the plan, Chancellor, Rishi Sunak said that there are reasons to be cautiously optimistic thanks to the government’s comprehensive and generous response in March. The country has seen three consecutive months of economic growth; millions of people have moved off the furlough scheme and back to work and consumer spending is returning. However, the Chancellor warned that a resurgence of the virus threatens our country’s recovery and the economic rationale for the next phase of support needs to be different.
The Winter Economy Plan will focus on dealing with the problems businesses face right now – supporting viable jobs through a time of depressed demand.
The Chancellor announced a new employment scheme – The Job Support Scheme, with targeted support for those businesses that need it the most.
The Job Support Scheme will directly support the wages of people in work, giving businesses who face depressed winter demand the option of keeping employees in a job on shorter hours rather than making them redundant.
The scheme will support viable jobs so employees must be working at least a third of their normal hours and be paid for that work, as normal, by their employer.
The government, together with employers, will increase those people’s wages covering two-thirds of the pay they have lost by reducing their working hours.
Running from November to April, all small and medium-sized businesses are eligible to apply, even if they did not previously benefit from the Furlough Scheme.
Employers retaining furloughed staff on shorter hours can claim both the Jobs Support Scheme and the Jobs Retention Bonus, significantly increasing the incentives to bring back previously furloughed employees.
In order to support the self-employed traders through the winter, the Chancellor announced that he is extending the existing self-employed grant on similar terms and conditions as the new Jobs Support Scheme.
As part of the Winter Economic Plan, the Chancellor also announced that there would be greater flexibility for those repaying loans through the Government’s new “Pay As You Grow” Scheme. All borrowers will now have the option to repay their Bounce Back Loans over a longer time period by extending the term of BBLs to ten years – this will reduce their average monthly repayments by almost half.
There will also be more time for businesses to access a range of government loan schemes. Over 1 million businesses across the United Kingdom have already benefitted from over £57 billion through government business loan schemes and as part of the Winter Economy Plan, the government will be giving businesses even more access to support by extending the deadline for new applications until the end of November for the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), and the Future Fund.
To continue supporting the 150,000 businesses and 2.4 million jobs in tourism and hospitality, the Chancellor announced that the temporary 5 per cent rate of VAT will now be extended until the end of March 2021.
Over half a million businesses have already benefitted from being able to defer Q2 2020 VAT payments until March 2021 – worth over £30 billion to over half a million businesses. In addition to this, a new scheme has been launched today as part of the Winter Economy Plan, which means that businesses can have extra time to pay back the VAT they owe in smaller equal monthly payments, interest-free, until the end of March 2022. On average, this means turning a one-off £60,000 payment into 11 payments of less than £6,000.
The Chancellor also announced more time for self-assessment businesses to pay back. Around 1.5 million businesses who pay through income tax self-assessment have benefitted from the government’s Self-Assessment Tax Deferral. In order to help them further, the Time To Pay Service will be upgraded so that all 11 million self-assessment taxpayers will be able to create a 12-month payment arrangement for up to £30,000 each, and extended under the end of January 2022, which is an 18-month deferral.
Commenting on the Chancellor’s Winter Economic Plan, South Swindon MP Robert Buckland and North Swindon MP Justin Tomlinson said:
“We strongly welcome the Chancellor’s announcement today of a Winter Economy Plan – outlining the next phase of the government's planned economic response to coronavirus.
“The Chancellor has listened to evidence from business and acted decisively.
“These bold steps will save tens of thousands of viable jobs this winter through wage support, tax deferrals and help for the self-employed.”