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Chancellor has failed to provide a stable environment for business

The latest unemployment figures show that the Chancellor has failed to provide a stable economic environment for UK businesses to operate in.

A succession of short-term measures which were then extended and lack of direction on Brexit and fiscal policy has created a vacuum within the business environment which is only going to get worse with more job losses being announced.

It is now time now for the Chancellor to provide a clear plan for 2021, which requires support for the hardest hit businesses and incentives for growth and investment.

The October labour market review by the ONS held no surprises and the predicted spike in redundancies appears to have started and is set to continue.

Whilst the headline number of those out of work and redundancies are below the most recent 2008 recession, there is now clear evidence that the Chancellor’s Job Retention Scheme (JRS) has delayed redundancies, not prevented them.

The rate of increase in redundancies is now at its greatest since mid-2009, and includes data only to August 2020, a point at which the JRS was still at its widest and most generous. The acceleration in redundancies commenced from June some months after the start of the crisis and highlights the delaying measure of the JRS. Data in the coming months is likely to show this trend continuing particularly with the JRS ceasing on 31 October.

Job losses are sadly inevitable and therefore much greater focus and resource is required for job creation. The decision to delay the planned Autumn budget was a missed opportunity by the Chancellor to enhance tax reliefs for investment into private business and encourage entrepreneurialism.

The Chancellor has announced various training schemes targeting, in particular, the 16-24 age group. However, these measures are often complicated and daunting for companies to access and simply reducing the cost of employment for that age group by either providing a holiday for employers National Insurance or a direct grant to cover an element of their salary would achieve a greater impact.

Would you like to know more?

If you would like to discuss any of the above guidance, please contact Richard Churchill or your usual Blick Rothenberg contact.

For any press queries, please contact David Barzilay whose details are to the right.