September’s Financial Update – The Winter Economy Plan
Chancellor Rishi Sunak has set out a series of revamped measures designed to halt job losses and stem
business failures as part of his Winter Economy Plan. Mr Sunak’s statement, delivered in the House of Commons on 24 September, was a last-minute replacement for the planned Autumn Budget which the Treasury had cancelled the previous day. That decision was taken in order to focus efforts on dealing with the short-term economic problems caused by the tightening of coronavirus restrictions. The centrepiece of the Winter Economy Plan was a new scheme to replace furlough, which will run from 1 November. The Job Support Scheme will last for six months and see government subsidise the pay of employees who work at least a third of their normal hours. Under the scheme, employers will pay employees for hours they actually work, with government and the employer each covering a third of the hours staff can’t work. Other announcements included a continuation of the self-employed grant on similar terms to the Job Support Scheme and an extension of the emergency VAT cut for tourism and hospitality until the end of March. In addition, the deadline on coronavirus loan schemes was extended and amended terms
introduced for existing borrowers, while businesses were given more time and flexibility to pay deferred tax bills.
During his statement, the Chancellor stressed that the government’s economic response to the pandemic
was evolving and that his aim now was to cushion a painful adjustment to a new way of living and working. He did
though make it perfectly clear that his emphasis has firmly shifted to protecting “viable” jobs. Despite cancelling the Autumn Budget, the Treasury has confirmed that it still plans to press ahead with a comprehensive spending review that is also scheduled to take place this autumn. SFFS Economic Review_Sep 20