New Support For Business Announced - Has Anyone Been Left Out In The Cold?

Chancellor Rishi Sunak today announced his ‘new winter economy plan’ to support businesses and jobs as Covid19 restrictions come into play, probably for six months.

By restricting the movement of the public to contain Covid19 and try to ease the second wave of the virus, the impact on the economy, and certain sectors, is likely to be even more profound. It was clear that something would need to be done to help business owners survive. 

One key phrase which the Chancellor repeated several times was  ‘viable jobs’.  It was not clear yet what the criteria will be to decide what makes a job ‘viable’. 

Opposition MPs warned though that the devil was in the detail and there was little comment on whether new measures would help those who have, to date, been excluded from support or have been only able to access very small business grants eg. the self employed who are directors of limited companies, those who have just started in business in the last year and others. 

For many business owners who are paid through dividends they have had no income from their businesses and – in spite of the furlough scheme – have had to take out CBILs or bounce back loans just to keep going. The theme of borrowing their way out of trouble has been extended. 

Here are some of the announcements: 

• A new Jobs Support Scheme  from November 1 for six months – where ‘viable jobs’ will be supported with government top ups to wages which will be at a much lower rate. An employer must be able to employ staff for a third of their normal hours and the government will then help an employer to top up that salary to two-thirds of their normal income (up to a cap).
• This will be open to any medium or small business even if they have not previously used the furloughing scheme. 
• The self-employed support scheme will continue along similar lines. 
• Bounce Back Loans will be subject to more flexible pay-back terms over ten years and will be pegged to the principle of ‘pay as you grow’. 
• Business Interruption Loans will extend pay back terms to ten years and business owners can apply for a loan up to December 31 this year. 
• Deferred VAT bills which were due to be settled in March can now be repaid over a longer period (11 months). 
• VAT for the hospitality and tourism sectors will remain at 5 per cent until March 31 2021. 

The Chancellor once again made it clear that the Government could not save every business or every job. Reaction has swift. 

Fiona Scott, is the South West representative of the national organisation #forgottenltd. She said:

“There is nothing here for directors of limited companies to cover their losses, many have earned nothing personally for six months. If these individuals cannot pay their bills then they will go under and no scheme will save any people they employ. 

“Don't worry though, I’m sure the Chancellor will class all of those jobs as unviable.” 

Julianne Ponan is the CEO of Creative Nature, a company which offers snack products and superfoods which are free from the top 14 allergens. The company was named UK Small Business of the Year by the FSB two years ago. 

“There is still no clear plan for businesses who have carried on going through coronavirus and have been able to do so. We need to know what the plan is and when is this money going to have to be paid back and how? Are we going to be subjected to much higher taxes later? 

“During this period I have not furloughed any staff and we have kept on working with our contractors to support them. We have had to adapt to put measures in place to keep going. We saw snack sales plummet and then baking mix sales soar – so we’ve had to flex accordingly, we’ve not been making lots of extra money.  Suddenly are we going to be hit with high taxes instead of a reward for keeping going and keeping people in work and not using the government furlough scheme?"  

Caroline Peyton, is a nutritional therapist with clinics in Wiltshire & Gloucestershire and she also works from home. She has not qualified for any government support so far. 

“I have run my business successfully for ten years and I’ve had no support because I’m the director of a limited company, I’ve just had to keep going. The track & trace app is, it was openly said today, is unreliable with a 33 per cent chance of giving a false positive. If you get one of those false results you have to self isolate and you have to run a business too? I find it disgraceful on top of being a business owner who has been excluded from financial support when many others have had at least a portion of their wages covered.”