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Chancellor outlines Covid winter economy plan for Scotland

By Calum MacLeod

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Chancellor Rushi Sunak
Chancellor Rushi Sunak

Chancellor Rishi Sunak has outlined additional government support to provide certainty to businesses and workers impacted by coronavirus in Scotland.

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.

The package includes a new Jobs Support Scheme to protect millions of returning workers, extending the Self Employment Income Support Scheme and 15 per cent VAT cut for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.

The announcement comes after additional measures to combat the spread of the virus were imposed across the UK.

Mr Sunak said: “When I visited Scotland last month I saw first-hand how UK Government schemes have protected jobs and businesses in the face of this crisis.

“And I was always clear that I wouldn’t hesitate to act in a creative and effective way to provide even more support should it be needed.

“With the resurgence of the virus and the restrictions imposed as a result now is the right time to provide the people of Scotland with the extra help they need.”

Secretary of State for Scotland Alister Jack said the package was great news for people and businesses in Scotland.

"It will help keep people in jobs, extend crucial support to businesses and giving them the certainty they need. It will give businesses and self-employed people the support they need to get through this difficult situation," he said.

Nearly half a million jobs in Scotland are currently being supported through the furlough scheme, down from a high of more than 930,000 at the end of July.

The Self Employment Support Scheme also helped more than 150,000 self-employed Scots while more than 65,000 businesses in Scotland benefitted from UK Government loan schemes.

The package of measures, which applies to all regions and nations of the UK, includes a new Job Support Scheme which will be introduced from November 1 to protect viable jobs in businesses who are facing lower demand over the winter months due to coronavirus.

Under the scheme, which will run for six months and help keep employees attached to the workforce, the government will contribute towards the wages of employees who are working fewer than normal hours due to decreased demand.

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 per cent of their usual hours. The level of grant will be calculated based on employee’s usual salary, capped at £697.92 per month.

The Job Support Scheme will be open to businesses across the UK even if they have not previously used the furlough scheme.

In addition, the Government is extending the Self Employment Income Support Scheme (SEISS) Grant. 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 per cent of average monthly profits, up to a total of £1875.

An additional second grant will be available for self-employed individuals to cover the period from February 2021 to the end of April.

This is in addition to the more than £13 billion of support already provided for over 2.6 million self-employed individuals through the first two stages of the Self Employment Income Support Scheme – one of the most generous in the world.

As part of the package, the government also announced it will extend the temporary 15 per cent VAT cut for the tourism and hospitality sectors to the end of March next year.

Dame Carolyn Fairbairn, CBI Director-General, said: “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. This is how skills and jobs can be preserved to enable a fast recovery.

“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.

“The Chancellor has listened to evidence from business and acted decisively. It is this spirit of agility and collaboration that will help make 2021 a year of growth and renewal.”

Mike Cherry, national chairman of the Federation of Small Businesses (FSB), said: “The UK’s small businesses are facing an incredibly difficult winter.Today’s support package is the flipside of the coin to Tuesday’s Covid-19 business restrictions.

"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.”

However, there was criticism from Mark Hart, Professor of Small Business and Entrepreneurship at Aston Business School and deputy director of the Enterprise Research Centre, who warned that the Chancellors measures were still leaving millions of UK entrepeneurs high and dry.

“The six-month extension to wage subsidies at a time when the pandemic is still far from over goes nowhere near as far as countries like France and Germany, whose similar schemes have been extended into 2022," he said.

“Let’s remember that, in this same timeframe, businesses are also facing the growing prospect of a fractious and messy end to the Brexit transition period.

“It’s also concerning that the extension to the Self Employment Income Support Scheme (SEISS) is far less generous than earlier, despite more stringent lockdown measures threatening demand across the economy.

“The glaring omission yet again is the plight of the three million early-stage entrepreneurs, freelancers and limited company directors who’ve been left high and dry as their incomes have evaporated."

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