LONDON (Reuters) – British finance minister Rishi Sunak announced on Thursday a new jobs support scheme that would help firms employ people on shorter hours, but warned he could not save every business or job.
Following is some early reaction:
BRITISH CHAMBERS OF COMMERCE DIRECTOR GENERAL ADAM MARSHALL
“The new wage support scheme will help many companies hold on to valued employees after furlough ends, and the extension of business lending schemes and tax forbearance will lessen the immediate pressure on cash flow for many affected firms.”
FEDERATION OF SMALL BUSINESSES NATIONAL CHAIR MIKE CHERRY
“Today’s support package is the flipside of the coin to Tuesday’s COVID-19 business restrictions.
“It is a swift and significant intervention, extending emergency SME loans, creating new wage support for small employers and the self-employed, and providing cashflow help on VAT deferrals and new Time To Pay for any tax bills to HMRC.
“We welcome that the Chancellor is ensuring that decisions to protect public health are informed by the need to protect the economy, people’s jobs and prospects for young people in our schools and workplaces.”
CONFEDERATION OF BRITISH INDUSTRY DIRECTOR-GENERAL CAROLYN FAIRBAIRN
“These bold steps from the Treasury will save hundreds of thousands of viable jobs this winter. It is right to target help on jobs with a future, but can only be part-time while demand remains flat.
“Wage support, tax deferrals and help for the self-employed will reduce the scarring effect of unnecessary job losses as the UK tackles the virus. Employers will apply the same spirit of creativity, seizing every opportunity to retrain and upskill their workers.”
THECITYUK CEO MILES CELIC
“The government’s additional package of support is essential to sustaining SMEs and jobs across the country. We are pleased the Chancellor has taken action to address the significant and urgent debt challenge facing SMEs highlighted by our recapitalisation group.”
KALLUM PICKERING, SENIOR ECONOMIST, BERENBERG
“While the wage subsidy scheme should help to reduce a likely spike in redundancies as the current employment subsidy scheme ends on Oct 31, it will only work if the economy avoids a second lockdown.
“In case of a new lockdown, or a serious further tightening of restrictions, the Chancellor may yet need to step up the emergency support, including more generous measures to support jobs.”
KAREN WARD, CHIEF MARKET STRATEGIST, EMEA, J.P. MORGAN ASSET MANAGEMENT:
“Some have argued that these support schemes merely delay a necessary reallocation of resource. But it is far too early to judge what lasting effect COVID-19 will have on behaviours. Experience of the last few months suggests that consumers want to return to leisure facilities and travel when it is safe to do so. A viable vaccine – news of which could arrive any day – would facilitate a return to life much as we knew in 2019. The Chancellor is thus right to ensure that businesses and their employees remain supported until it is clear whether, or not, that medical solution is forthcoming.”
TOM SELBY, SENIOR ANALYST AT AJ BELL
“Taken together, these measures should help ease the pressure currently being felt by businesses and workers up and down the country. However, whether it is enough to prevent a surge in unemployment as we head into winter remains to be seen.
“Given borrowing was already forecast to be around 300 billion pounds higher in 2020/21 than anticipated before COVID-19 hit – and that is before this new support package was accounted for – it is inevitable that at some point the Government will have to address the question of how all this will be paid for.”
BUSINESS ACTION COUNCIL CHAIR MAURICE OSTRO
“By supporting people to remain in work, the new measures will help employers and employees through a challenging winter, and ensure businesses are poised to grow and innovate when the situation improves.”
INSTITUTE FOR FISCAL STUDIES DIRECTOR PAUL JOHNSON, VIA TWITTER
“This is a v big change from furlough. Less generous. Only open to those who are working a third of normal hours.
“Understandable given need to adapt as economy changes. Can’t pay all wages forever. But a lot on furlough now likely to lose their job.”
(Reporting by UK bureau; Editing by Alex Richardson)
Video: A closer look at the Job Retention Scheme (Sky News)