Chancellor's Winter Economy Plan

A raft of new measures aims to prevent huge job losses after the withdrawal of the furlough scheme

The Chancellor announced yesterday the next stage in the support package to help companies survive the economic crisis created by the pandemic. In doing so, he stressed that: “The primary goal of our economic policy remains unchanged - to support people’s jobs - but the way we achieve that must evolve.”

Firstly, the new Jobs Support Scheme provides help to all small and medium-size businesses to retain employees in viable jobs. Larger businesses are also included, provided they can demonstrate a reduction in revenue. The scheme requires employees to work a minimum of one third of their normal hours, with the government and the employer each covering one third of the wages for the hours not worked. This equates to at least 77% of the employee’s normal wage, although the government grant will be capped at ￡697.92. 

This scheme will be available in addition to the Jobs Retention Bonus and will be open to companies even if they haven’t furloughed employees. It was also confirmed that the Self-Employed Income Support Scheme would be extended on the same basis, which will initially be worth 20% of average monthly profits, up to a total of ￡1,875, from November to the end of January. 

More time has been given for business that have taken advantage of the government’s loan schemes and tax deferral options. The application deadline for all coronavirus loan schemes – including the Future Fund - has been extended to 30 November to ensure that more businesses can benefit.

Included in the measures announced was an extension to the repayment period for the bounce-back loans from six to ten years. The ‘Pay as you Grow’ initiative nearly halves average monthly repayments, while allowing businesses "in real trouble" to move to interest-only payments or suspend payments for up to six months, without affecting their credit rating. 

In addition, the government guarantee on loans taken out through the Business Interruption Loan Schemes has been extended for up to ten years, making it easier for lenders to give people more time to repay.

If today’s announcements affect you or your business and you would like to discuss them further, please contact your St. James’s Place Partner.