Revised Winter Economy Plan
As the UK enters a second lockdown, the Chancellor has had to tweak his previous Winter Economy Plan for carrying the economy through till the Spring. Perhaps the most important change would’ve been the withdrawal of the furlough scheme at 31 October and the introduction of the Jobs Support Scheme(JSS).
Schemes such as the Kickstart programme and the Job Retention Bonus were intended to keep the level of unemployment from creeping upward with the latter providing companies with a one-off £1000 payment for bringing staff off furlough. The Kickstart scheme was meant to increase employability opportunities for individuals aged 16-24 claiming universal income as the government would pay the entirety of minimum wage and employer’s National Insurance Contributions.
The chancellor announced an array of new measures with many U-turns in response to the new month-long lockdown.
However, as the coronavirus situation has worsened and a second lockdown became increasingly imminent, plans have undergone significant modifications to minimise business failure and prevent people from being exposed to the prospect of long-term unemployment. The furlough scheme has now been extended until 31 March 2021 with the government subsidizing 80% of the workers’ income. Albeit a review of the furlough scheme is due in January 2021, to assess the level of government support-the percentage of the wage subsidized by the government-based on the situation concerning coronavirus. The decision is estimated to cost the treasury an additional £5 billion per month.
The coronavirus has deteriorated public finances at an unprecedented pace, last seen during the 20 century.
The self-employment income support scheme has also been revised to 80% of average profits up to £7500 and is expected to cover profits for the period November till January. This is a much more generous percentage than the previous 20%,later revised to 40%, which is evident of the increasingly worsening economic environment spawned by the pandemic. Applications for the grant are expected to open on 30 November 2020. The tentative cost to the Treasury of £1.4 billion per month is expected deal a further blow to fiscal stability and public finances.
Nevertheless businesses, where appropriate, have had time to digitalize their operations and increase their flexibility, resilience and adaptability over the last few months to sudden government announcements and localized lockdowns which should allow for a smoother transition this time around to working from home. Strengthening software to prevent the risk of fraud and increased time spent working from working from home could lead to fewer barriers being faced since employees better accustomed to the ‘new normal’ which was unfathomable to many less than a year back.
