We don’t think too many people were expecting Chancellor Rishi Sunak to wave a magic wand and make everything better with his statement today, but his latest announcements are a grim reflection of the stark reality we all now face – recession.
“Not every job can be saved” is also a very different message to March’s promise to do “whatever it takes…” but perhaps time and perspective have forced the Government to be a little more blunt in their predictions.
This said, the focus of Sunak’s latest address was still on how jobs could be preserved, with the UK set to enter six months of what is essentially a type of ‘Diet Lockdown’.
What does it mean for you? Here’s a summary of what has been said…
With the furlough scheme set to end imminently, a new jobs support scheme will come in to replace it. In this scheme, the Government will ‘directly support’ the wages of people in viable jobs who are working at least a third of their normal hours.
So, what constitutes as a ‘viable’ job?
Put it this way, if you’re still on furlough, there’s a good chance that your job isn’t going to be viable for too long, sorry.
The Government will top up those people they support by paying an additional third of their salary, which obviously means the final third would go unpaid. So, even if you fall into the support bracket, you could find yourself only earning two thirds of your salary.
That is a significant difference.
Starting in November and running for six months, the scheme is said to be eligible for all small and medium sized businesses.
For larger businesses, proof that the pandemic has affected profits will be needed to apply for the scheme. It’s going to get messy, and just like the furlough scheme, this could prove to be rife for opportunists.
In addition, companies will be allowed to “pay as they grow”, meaning that they have up to ten years to pay back the bounce back loans, instead of six, whilst those currently struggling to make repayments will be allowed to make interest only repayments, or suspend payments for up to six months if things become really difficult.
It’s bleak, and it does seem as though many businesses will find themselves putting off the inevitable for the next few months, as sad as that prediction may be.
The hospitality and tourism sector will continue to benefit from the reduced VAT rate of 5% until March 2021, which the Government hope will offset the losses that will come from 10pm closing times.
The ‘magic money tree’ really doesn’t exist, it seems.
Not for Labour on the opposite side of the House, who aren’t offering much by way of opposition, and not for the Conservative Government either, who are effectively trying to hold the paper up without any blu tack…
The Institue for Fiscal Studies have mixed views on the new measures, saying that whilst the offer is “significantly less generous than the furlough scheme”, it is still welcome support.
Welcome support for those who can access it maybe, but we predict heavy numbers in terms of job losses across a range of industries, not least within the music, entertainment and nightlife sectors.
There really doesn’t look to be much relief on the horizon for that sector at all. Rishi Sunak said it himself, he can’t save every job, and it looks as though that will be an industry which suffers greatly, unless new lifelines are announced in the coming days.
This is a worrying time for all of us, and job security has never felt more fragile.
We will be working closely with our clients in the coming weeks and months, to find out what this latest announcement means for them, and we will endeavour to keep you all updated as and when new information comes to light.
To finish, we’d like to reinforce one of our most important values at #TeamCES, supporting the vulnerable.
As jobs are lost, the furlough scheme ends and we endure a ‘second wave’, more people than ever before are going to fall into the ‘vulnerable’ bracket.
We’re not here to take the clothes off their back and kick them when they’re down, and we actively signpost those in need to the correct help.
We ask all our followers to do the same whenever and wherever they can.
This plan from Rishi Sunak is intended to get us all through the winter, but we need to look out for each other within our communities and localities as well, to make sure that we help those who will find help hardest to come by.