Chancellor announces new raft of COVID support measures

The new measures announced by the Chancellor have been broadly supported, particularly by groups who have been calling for an extension to the loan schemes and those who have warned of the dangers of the impending end to the furlough scheme. However, many organisations suggested more action is needed.

Responding to the announcement, the British Chamber of Commerce director general, Adam Marshall called the new measures “an important shot in the arm” for business and the economy heading into a “challenging and uncertain winter.” 

Welcoming the Job Support Scheme and extensions to lending initiatives, Mr Marshall added: “The Chancellor must remain open to taking additional action to support parts of the economy facing unprecedented challenges over the months ahead.”

While recognising areas of the new support schemes that will provide support for small and medium businesses, the Institute for Fiscal Studies raised some “serious challenges” amongst the measures. These include concerns that some jobs, which may be viable in the long-term, might not be viable in the short-term even on reduced hours, as a result of restrictions on certain sectors or social distancing requirements.

Paul Johnson, director of IFS, said: "The new job support scheme represents a significant new intervention from government to support jobs through the crisis. But it is significantly less generous than the furlough scheme it replaces, though remarkably the Chancellor provided no indication of the likely cost of the scheme." 

Acknowledging the “difficult path” the Chancellor is plotting between supporting viable jobs while not restricting people in jobs that will not be there once the country emerges from the crisis, Mr Johnson cautioned: “With employers now having to pay at least 55% of the normal wages of their employees it is clear that many jobs will be lost over the coming months."

The Federation of Small Businesses also welcomed many of the measures outlined by the Chancellor, calling it “encouraging” that businesses would be able to access the new job support scheme without facing “excessive paperwork” and with a guarantee of support for the next six months.

Meanwhile, the ‘Pay as You Grow’ initiative is set to provide “relief for hundreds of thousands of firms,” said national chairman of the group, Mike Cherry, “giving them the confidence to invest and hire today rather than tomorrow.”

The organisation also welcomed the extension of the self-employed income support scheme, but added that the scheme should be extended to those who had been missed in the first round of support measures.

“We are concerned that the Chancellor had nothing to say today on support for those who were left out of the first round of support measures, not least the newly self-employed and company directors,” Mr Cherry said, adding that an emergency relief package is “urgently needed” for these groups.

Similarly, the Association of Independent Professionals and the Self-Employed (IPSE) said it is “right” that the self-employed support schemes have been extended, but called the support “woefully inadequate.”

Andy Chamberlain, director of policy for IPSE commented: “Limited company freelancers and the newly self-employed almost entirely missed out on support in the last lockdown and have faced bleak months of financial devastation. Now they face a dark winter ahead unless the government does more for them.”