Chamber calls for more details on new jobs support scheme

The Chancellor has unveiled a winter economny plan aimed at protecting 'viable' jobs and supporting businesses in bringing people back to work.

The jobs scheme will help keep people at work on shorter hours rather than see theme made redundant. It will come into effect after the current furloughing finishes at the end of October.

Employers will meet the cost of a third on an employee's normal hours with the Government meeting the other two-thirds of pay.

Black Country Chamber of Commerce chief executive Corin Crane said: “The Chancellor’s new 'winter economy plan' comes after increasing pressure from business groups, including the British Chambers of Commerce, MPs and unions to extend the furlough scheme amid fears the new restrictions will damage the economy.

“However, we need to see more details on the new job scheme, as this is significantly less generous than the Furlough scheme and further details on the self-employed support.

“With regards to the loans support this is a major win for the chamber network, we have been calling for an extension to CBILs and BBLs, extending the payment terms and a commitment to a new loan scheme in 2021.”

Greater Birmingham Chambers of Commerce said that despite promises from the Prime Minister earlier this week, there was little comfort from Rishi Sunak for many sectors, including sport and expos.

Paul Faulkner, GBCC’s chief executive, promised that the chamber would continue to support members and the wider community by lobbying for additional support where needed.

“The Chancellor made his intentions clear from the outset of his announcement this afternoon –the business landscape has completely altered since the start of March and the new measures announced today reflect the underlying fragility we face as a society as the Government attempts to revive the economy whilst also containing the spread of Covid-19.

“It’s pleasing to see the Chancellor has listened to the concerns shared by thousands of businesses across the country and recognised that strong measures needed to be taken to avoid a disastrous escalation of the unemployment rate over the winter months.

“Firstly, the flagship wage subsidy plan forms the backbone of Mr Sunak’s winter plan and whilst we await on the specific policy details, it’s reassuring to see that the scheme will help preserve viable jobs and offers a degree of reassurance to those employers facing the harsh prospect of either retaining staff or making them redundant.

“The wider eligibility of the plan (compared to the original furlough scheme) is also good to see given the number of businesses which fell through the cracks and weren’t able to access the original programme.

“Prolonging the loans schemes and lengthening their payment terms along with extending the VAT Deferral Scheme also makes complete sense – as data from our Quarterly Business Report regularly highlights, firms across the region are facing severe issues related to finance and levels of debt and hopefully this policy will help to alleviate these concerns in the medium term.

“Nevertheless, the Chancellor could have gone further in tackling these structural issues and hopefully we will see a reduction in the employer National Insurance Contributions along with a reform of our outmoded corporate tax system in the near future.

“From a broader perspective, it’s also disappointing to see a lack of reference to the large scale interventions which are required for the sectors which have been hardest hit, despite the promises made by the PM earlier in the week," he said.

Gareth Prince, West Midlands partner at profesional services group Begbies Traynor, said: “Amid difficult circumstances, the Chancellor was under pressure to bridge the gap and avoid a cliff edge once the furlough scheme ends. On the face of it, this new package of measures provides a helping hand to get people back into the workplace on reduced hours. However, the lion’s share of responsibility now shifts to the employer who will have to find 55 per cent of an employee’s pay for working just one third of their usual hours.

“The proposals are clearly designed to support viable jobs and businesses, but will pull the rug from under so-called ‘zombie’ companies. It remains to be seen if it is enough to safeguard viable jobs and stem the tide of inevitable redundancies.

“The pressure on businesses is coming in waves, as Government measures are withdrawn or reduced. The extension to loan repayments and extension to VAT payment deferrals will therefore be welcome, but the fact remains that at some point the debts and VAT deferral need to be repaid and that will be especially difficult for many businesses that are still struggling to reach pre-pandemic activity or that are subject to ongoing local lockdown restrictions.

“Perhaps there will be more detail to come, but we didn’t hear too much for those who have already lost their jobs in the form of skills and training packages. This is vital for the long-term health of the economy.”