8‘The devil is in the detail’: Will Sunak’s plan save Suffolk 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.
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.
MORE: Suffolk businesses react to new coronavirus job support schemeThis 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.
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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.
The support will offer some reprieve to the East’s visitor economy – which includes hospitality, events and attractions – worth £10 billion.
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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.
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 15% VAT cut for tourism businesses, and extended the repayment terms for businesses who used bounce back loans from six years to 10.
Shaun Davison, manager at accountancy firm Lovewell Blake, said that overall Mr Sunak’s policies had been both “supportive” and “honest”.
“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.
Paul Simon, head of communication and campaigns at Suffolk Chamber of Commerce, said the plan addresses some of the Chambers’ concerns.
He said: “The new Jobs Support Scheme will help many companies hold on to valued, skilled employees. We and our members will be eager to see the detail and consider whether and how they will be able to access this scheme.
“Our members in the hospitality and tourism sectors that qualify will also welcome the temporary reduction of VAT from 20% to 5% remaining in place until 31 March 2021.”
Chris Starkie, chief executive of New Anglia Local Enterprise Partnership, echoed Mr Simon’s comments.
He said: “We are pleased that the Chancellor has announced this new scheme which many business organisations have been asking for.
“While the support is less generous than under the furlough scheme, with so many firms reporting they have three months of cash reserves or less, this should ease the pressure on them as they head into an uncertain period.
“Our region relies very heavily on the hospitality and visitor sectors, so I am also pleased to see the VAT reduction for these hard-hit areas has been extended to the end of March 2021. However, further aid may be needed if we are to stop many businesses in these sectors from struggling over the winter.”
MORE: Chancellor reveals plan to save jobs by paying two thirds of lost wagesMatthew Cole, employment partner at Prettys solicitors, said: “There are key questions to be answered in the coming days: what happens to National Insurance contributions and pensions contributions? Over what period must the short time working be sustained – one week? One month? What will the thresholds be for large employers claiming the benefit, and what constitutes a fall in turnover?
“The Chancellor also committed to a similar level of support for self-employed workers. Will they be able to deliver this?”
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.”