Chancellor sets out the Winter Economic Plan

The Chancellor of the Exchequer has launched the Winter Economy Plan to Parliament on Thursday 24 September 2020 to outline how the government will support jobs and the economy over the coming months.

The Chancellor has outlined additional government support to provide certainty to businesses and workers impacted by coronavirus across the UK.

Delivering a speech in Parliament, the Chancellor announced a package of measures that will continue to protect jobs and help businesses through the uncertain months ahead as we continue to tackle the spread of the virus. The package includes a new Jobs Support Scheme to protect millions of returning workers, extending the Self Employment Income Support Scheme and 15% VAT cut for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.

The announcement comes after the Prime Minster set out further measures to combat the spread of the virus over the winter, while preserving the ability to grow the economy.

Welcoming the new measures, James said -

"This is a very difficult time for business in North West Norfolk and these measures will help support firms and protect jobs.  Tourism and hospitality is an important part of our local economy which is why I have championed it and I'm pleased the Chancellor has listened to my call to extend the cut in VAT to 5%.

Businesses in West Norfolk have been working incredibly hard in very difficult circumstances, and these new measures will help support them through this winter."

So far the government have provided over £190 billion of support for people, businesses and public services, including paying the wages of nearly 12 million people, supporting over a million businesses through grants, loans and rates cuts and announcing the Plan for Jobs in July.

The package of measures, which applies to all regions and nations of the UK, includes:

1. A new Job Support Scheme from 1 November to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus. For six months, the government will contribute towards the wages of employees who are working fewer than normal hours. Employers will continue to pay the wages of staff for the hours they work - but for the hours not worked, the government and the employer will each pay one third of their equivalent salary. In order to support only viable jobs, employees must be working at least 33% of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.
2. Extending the Self Employment Income Support Scheme (SEISS). An initial taxable grant will be provided to those who are currently eligible for SEISS and are continuing to actively trade but face reduced demand due to coronavirus. The initial lump sum will cover three months’ worth of profits for the period from November to the end of January next year. This is worth 20% of average monthly profits, up to a total of £1,875. And an additional second grant, which may be adjusted to respond to changing circumstances, to cover the period from February 2021 to the end of April.
3. 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.
4. A New Payment Scheme, which gives them the option to pay back -deferred their VAT billsin smaller instalments. Rather than paying a lump sum in full at the end March next year, they will be able to make 11 smaller interest-free payments during the 2021-22 financial year; 
5. An 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, by around 11 million self-assessment taxpayers,will now not need to be paid until January 2022
6. A new Pay as You Grow flexible repayment system for businesses that took out a Bounce Back Loan, including extending the length of the loan from six years to ten, that will cut monthly repayments by nearly half. Interest-only periods of up to six months and payment holidays will also be available to businesses.
7. Plans to give Coronavirus Business Interruption Loan Scheme lenders the ability to extend the length of loans from a maximum of six years to ten years if it will help businesses to repay the loan.
8. An extension for applications for the government’s coronavirus loan schemes 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. This change aligns all the end dates of these schemes, ensuring that there is further support in place for those firms who need it.

In addition, the government have pledged major investment in public services such as the £68.7 billion of additional funding approved by the Treasury so far, including £24.3 billion since the Summer Economic Update in July. 

This funding has helped ensure the procurement of PPE for frontline staff, provided free school meals for children while at home and protected the country’s most vulnerable. In addition, the £12 billion funding to roll-out the Test and Trace programme has played a key role helping to unlock the economy, enabling businesses like restaurants and bars to serve customers again.

As announced earlier this year, the Treasury has also guaranteed the devolved administrations will receive at least £12.7 billion in additional funding. This gives Scotland, Wales and Northern Ireland the budget certainty to for coronavirus response in the months ahead.