James Brokenshire has welcomed the Winter Economy Plan announced by the Chancellor which sets out additional government support to provide certainty to businesses and workers impacted by coronavirus across the UK.
The package includes a new Jobs Support Scheme which directly funds businesses to protect viable jobs and people’s wages rather than laying employees off through a difficult winter. Under this scheme, businesses will continue to pay its employee for time worked, but the burden of hours not worked will be shared equally between the employee, employer and government–one third each way. The scheme is focused on viable jobs, so employees need to be working at least a 33% of the time, and this % will move up over time. The Scheme will open from 1 November and run for six months until the end of April 2021.
To ensure parity between employees and self-employed, the Chancellor also announced an extension to the Self Employment Income Support Scheme. The extension will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period. The grant will match the average grant of the Job Support Scheme, and represent 20% of three-month earnings, for November to January.
The Chancellor also announced an extension to the temporary 15% VAT cut for the tourism and hospitality sectors to the end of March next year. This will give businesses in the sector - which has been severely impacted by the pandemic - the confidence to maintain staff as they adapt to a new trading environment.
In addition, up to half a million businesses who deferred their VAT bills will be given more breathing space through the New Payment Scheme, which gives them the option to pay back in smaller instalments, rather than paying a lump sum in full at the end March next year. On top of this, around 11 million self-assessment taxpayers will be able to benefit from a separate additional 12-month extension from HMRC on the “Time to Pay” self-service facility, meaning payments deferred from July 2020, and those due in January 2021, will now not need to be paid until January 2022.
The Winter Economy Plan also included measures that give businesses flexibility to pay back loans. The burden will be lifted on more than a million businesses who took out a Bounce Back Loan through a new Pay as You Grow flexible repayment system. This includes extending the length of the loan from six years to ten, which will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses. In addition, the Chancellor also announced he would be extending applications for the government’s coronavirus loan schemes that are helping over a million businesses until the end of November. As a result, more businesses will now be able to benefit from the Coronavirus Business Interruption Loan Scheme, the Coronavirus Large Business Interruption Loan Scheme, the Bounce Back Loan Scheme and the Future Fund.
Commenting, James said:
“I welcome the Chancellor’s Winter Economy Plan which sets out the bold next phase of our planned economic response to coronavirus. It is right to focus on dealing with the problems businesses face right now and supporting viable jobs through the uncertain months ahead.”
“I am aware that many businesses, employees and self-employed people in Old Bexley and Sidcup have relied and benefitted from the government schemes throughout coronavirus and I am therefore pleased to see the introduction of the Job Support Scheme, an extension to the Self Employment Income Support Scheme, as well as the extension of the temporary VAT cut which will be crucial to enable a fast recovery and support our local economy.”