Emergency measures to boost the South West's vital hospitality and economy have been broadly welcomed but there are fears the raft of measures outlined by Chancellor Rishi Sunak do not go far enough.
Julie Hawker, Board Director of Exeter Chamber of Commerce, said that many businesses, including the night-time bars and clubs, effectively face a pause on income during the winter months.
She said: "While undoubtedly the new schemes will help in the immediate future, there is a concern they won’t go far enough to protect otherwise viable businesses and their employees.
“This, coupled with the end of the Brexit transition period, should be a key focus for Government to support the economy over the longer term.
“It continues to be vital for the Chamber, that all sectors in the Greater Exeter area are supported through the winter period ahead and will continue to lobby and provide support wherever we can."
While hospitality and its suppliers will be hardest hit, all business sectors will be affected, said Mrs Hawker.
She said: “The next six months will be critical for all business sectors with a very challenging combination of Covid related restrictions and Brexit. Indeed, latest stats from ONS show that the economy has shrunk by 11.7% compared to pre-lockdown and British Chambers of Commerce state that, due to Covid crisis, there’s been little time to plan for Brexit with just 38% of businesses saying they’ve done a risk assessment for change in trading conditions in January."
Support outlined in Sunak's Winter Economic Plan include a new Job Support Scheme, the cut in VAT for hospitality, the extension of self-employment income support and more flexible pay back terms on business loans.
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Patrick Tigwell, Partner at said that the South West business community will now be breathing a 'collective sigh of relief'.
He said: "This has been a particularly tense period with the Coronavirus Job Retention Scheme (JRS) due to finish at the end of October. The recent announcement of further restrictions has added to the pressures many businesses face."
Chancellor's support measures for the economy in brief
Chancellor Rishi Sunak has announced fresh measures to replace the furlough scheme and help the 海角视频 economy to continue to recover during the second wave of coronavirus infections.
Here are the changes at a glance:
– The Jobs Support Scheme (JSS), a form of wage subsidy for “viable” jobs, will replace the furlough scheme, which will be wound down next month.
– The JSS will allow staff to be paid by their employer for working at least a third of their usual hours, with the Government topping up part of their salary that would have otherwise been lost due to working reduced hours.
– The Treasury said the Government would pay a third of an employee’s equivalent salary, capped at £697.92 per month, meaning a third will go unpaid.
– All small and medium-sized businesses will be eligible for the wage support concept, which starts in November and runs for six months, but larger businesses will have to prove their profits have been hit by the pandemic.
– The current self-employed grant will be renewed on similar terms to the new Jobs Support Scheme, the Chancellor said.
– The temporary reduction of VAT rates from 20% to 5% for the hospitality and tourism sectors will be extended for a further two months, with a new deadline of March 31 2021.
– Business “bounce-back loans” will have a “pay-as-you-grow” element added, giving loanees 10 years rather than six years to repay the money, a move that will slash monthly repayments by almost half, according to the Chancellor.
– Those struggling to repay their bounce-back loans will be able to choose to make interest-only payments and “anyone in real trouble” will be permitted to suspend repayments all together for up to six months, said Mr Sunak.
– The deadline for taking out a coronavirus business interruption loan will be extended until November 30, with Mr Sunak also increasing the Government guarantee on them for up to 10 years.
The most significant development is the launch of the Job Support Scheme. Starting on 1 November, it following the Job Retention Scheme (furlough scheme) on 31 October.
Mr Tigwell said: "The name of the Job Support Scheme gives a subtle message as to how it differs from the JRS. The Chancellor emphasised that it is designed to protect viable jobs. It is not intended to keep people in jobs that only now exist because of Government support. It is designed to allow employers to put staff on reduced hours, which could be especially helpful for our region’s seasonal hospitality businesses over the winter."
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The Government will fund up to a third of an employee’s lost wages if their hours have been reduced as a result of the pandemic. Another third would be matched by the employer. So, for example, an employee who usually earns £2,000 and is working half of their usual hours would receive £1,000 as normal pay, £333 from the Government and £333 from the employer.
It is open to any small or medium-sized business (SME), regardless of sector. This is good news for the South West, where our economy is largely dependent on SMEs. Larger businesses will need to prove lost turnover as a result of the Covid-19 crisis in order to quality.
Employers can use the scheme for any employees, regardless of whether or not they have previously been furloughed.
It will run from 1 November until April 2021.
The Chancellor also announced more time to repay loans and launch of Pay as you Grow. The repayment period for bounce back loans has been extended from six to ten years. The Pay as you Grow initiative will also offer interest only payments and payment plans for businesses that have been especially hard hit.
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Businesses can now apply for bounce back loans or Coronavirus Business Interruption Loans (CBILS) until 31 December. This could be a good opportunity for those businesses that did not need this finance earlier in the pandemic but are now faced with difficulties.
Businesses that deferred their VAT payments as a result of the pandemic will now not need to pay a lump sum at the end of March. Instead, businesses can now spread these payments over 11 smaller sums, with no interest.
And the region’s hospitality businesses, including restaurants and hotels, can now also benefit from the extension to the , which was introduced in July. This was due to finish on 13 January but will now run until 31 March.
Mr Tigwell said: "Although these initiatives may not provide every business with a lifeline, they are likely to be widely welcomed. Overall, I see today’s announcement as providing South West businesses with positive news. As always, the devil will be in the detail."