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With many small British businesses in the grip of lockdown, Chancellor Rishi Sunak has announced the furlough scheme will be extended until the end of March 2021 across the UK.
Otherwise known as the Coronavirus Job Retention Scheme, the furlough programme will pay employees up to 80% of their salary up to £2,500 a month. The government will review the scheme in January.
At the same time, the government extended more support to the self employed through the Self-Employment Income Support Scheme, with the third grant covering November to January calculated at 80% of average trading profits, up to a maximum of £7,500.
“It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support,” explained Sunak. “Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.”
The government said the furlough scheme has protected over nine million jobs across the UK.
“There is still more work to do”
Mike Cherry, chair of the Federation of Small Businesses (FSB), said the chancellor’s move to extend the furlough scheme was “bold and much-needed” and would give small business owners “an acutely-needed injection of confidence as they head into the festive period beset by disruption”.
However, Cherry said there were still gaps in the government’s business support programme. “The chancellor has taken a step forward today, but there is still more work to do,” he said.
For instance, he said new business owners, sole traders and entrepreneurs without business premises are “largely excluded from support measures. That urgently needs to change, and local authorities must use discretionary funds to help these groups wherever possible.”
What’s more, Cherry said the cash grants available to small firms “pale in comparison” those provided in the spring, and many businesses are still struggling to make applications to the bounce back loan.
“From here, we need to see gaps in the business support landscape addressed and a concerted effort made at every level of government to ensure guidance for small firms and the self-employed is accessible and crystal clear, especially as rules are being adjusted regularly,” Cherry explained.
Rain Newton-Smith, chief economist at the Confederation of British Industry, also welcomed the chancellor’s announcement, but added that “sectors and supply chains under the greatest strain may need more tailored support in the coming weeks.” The Food and Drink Federation has previously called for “further clarity” that the food supply chain will be sufficiently supported through the lockdown period.
In late October, the chancellor said new discretionary local authority grants aimed at the supply chains of those serving the hospitality industry would be available, following wholesalers’ claims that the sector had not received enough direct support.
In spite of the challenging environment, many in the food and drink industry are seeing bright spots. In a poll at a recent panel session held by the Federation of Wholesale Distributors, attendees said the increase in the popularity of local shops was the most promising development of recent months, along with better cooperation between wholesalers and suppliers. For the speciality food supply chain, the surge of support for local businesses will be crucial in the months ahead.
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