Swindon & Wiltshire Business News

Business groups react to Chancellor's summer statement

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Chancellor of the Exchequer Rishi Sunak has set out a Plan for Jobs that the government says will "spur the UK’s recovery from the Coronavirus outbreak."

His raft of measures includes plans to protect jobs, help younger workers, and encourage spending in the hospitality industry.

Key points included:

  • A job retention bonus to encourage firms to retain furloughed staff with a one-off £1000 payment to employers for every furloughed employee retained to the end of January 2021
  • Support for young workers with a £2 billion 'kickstart' fund to pay for six-month work placements for 16 to 24-year-olds on universal credit
  • A £1.6 billion scale-up investment in employment support schemes, training and apprenticeships to help people looking for a job.
  • A six-month VAT cut for restaurants, hotels and attractions from 20 percent to five percent
  • An Eat Out to Help Out scheme that will see the government pick up 50 percent of the cost of meals served in restaurants on Mondays, Tuesdays and Wednesdays – up to £10 a head
  • A Stamp Duty holiday for homebuyers

He also revealed that spending on the battle against coronavirus has risen to nearly £190 billion – nearly £3,000 for every person in the UK.

Reacting to the announcement, Dr Adam Marshall, director general of the British Chambers of Commerce said: "Businesses will celebrate many of the Chancellor’s announcements today, although it is likely that the scale of the stimulus needed to help the UK economy restart, rebuild and renew will need to be greater still over the coming months."

Hannah Essex, co-executive director of the BCC, added: "In the coming weeks the Government needs to consider taking further bold steps in response to this crisis.

“Businesses face cliff-edges in the autumn as existing support winds down, and so the Government must consider reducing national insurance contributions and extending existing loan schemes.

“Many businesses are concerned about how they will survive in the event of a local lockdown, and we ask the Government to urgently set out what support will be available if that happens.”

Mike Cherry, national chairman at the Federation of Small Businesses, said: "The key now is making sure these positive new measures work for all, especially the small firms that make up 99 percent of our business community and employ 17 million people.

“Whilst the majority of small businesses have been supported by the Chancellor’s emergency measures, some have not.

"We need the Government to spell out how it will help the newly self-employed and company directors who have once again been overlooked this afternoon, and have now been left without help for more than 100 days during this incredibly difficult period. That fact should be recognised once we reach the autumn.”

Dame Carolyn Fairbairn, director general of the Confederation of British Industry, said: "Prevention is better than cure. Many viable firms are facing maximum jeopardy right now.

"The job retention bonus will help firms protect jobs. But with nearly 70 percent of firms running low on cash, and three in four reporting lack of demand, more immediate direct support for firms, from grants to further business rates relief, is still urgently needed.

“The Chancellor must continue to balance the need to invest in a long-term, sustainable recovery while responding to the urgent challenges that companies are experiencing today.”

And Jonathan Geldart, director general of the Institute of Directors, said: “The Chancellor pulled a few rabbits out of his hat today, but many directors will feel like he missed a trick.

"We fully understand the Treasury’s desire to focus on the young, and particularly badly-affected sectors, but coronavirus has crippled many parts of the economy.

“The Chancellor’s greatest strength has been his willingness to adapt as the situation moves. While there were certainly things for businesses to welcome today, there is still a long hard road back to full economic health.”

Matt Griffith, director of policy at Business West, said: "For someone who has only been Chancellor for five months, Rishi Sunak is proving a remarkable calm and capable operator. This is lucky, because never have these qualities been more important.

"This is a critical moment. The withdrawal of furlough payments, amidst deep economic uncertainty and the continuation of social distancing, is a major risk: the UK could see an unprecedented collapse in employment that would do long-lasting damage to our economy.

"It was an impressive array of measures, but it remains a gamble. Are firms confident enough to retain and create enough jobs in the face of such uncertainty? Will the measures be enough to counterbalance the hit to income and capacity that social distancing has given to our hospitality and food & drink industries? Will we see a second spike and local lockdowns to blow events off course?

“The Chancellor has an Autumn budget as fallback in case this statement isn’t enough. But in the meantime, let’s take up his generous offer to help our economy recover – if the Chancellor is buying, it is up to us to help support getting our local economy back on track.”

Meanwhile, Gina Broadhurst, founder of the campaign group Forgotten Ltd – which was formed to champion small limited company directors who are not eligible for grants or other support packages, said: “It makes no sense for the Government to reward companies for bringing employees back from furlough or creating new apprenticeships if those same companies are going out of business.

“This strategy is premised on businesses remaining solvent, but hundreds of thousands of small business owners employing millions of people have received zero support and are on the verge of collapse.

“Small businesses have been abandoned. The cracks in the Government’s support packages are getting wider. And at this rate more businesses will fall into them, never to be seen again.”

For local reaction, see Chancellor's summer statement – local businesses have their say