Continual extension and modification does little to suggest the Chancellor has a clear plan for the UK economy.
The furlough extension is welcomed and finally the Chancellor is providing some longer-term measures in respect of England’s four week lockdown. However, it would have made more sense to extend the furlough scheme for three months in the first place to give businesses certainty, given the critical winter and festive period.
He should have gone further and announced that the furlough scheme will be in place until June 2021 or even December 2021. He can, of course, review and amend the scheme eligibility and assistance on a monthly basis.
The extension of the furlough scheme has come at a cost for some employers who have been counting on the Job Retention Bonus (JRB). For those businesses that have re-designed their businesses and may not be utilising the furlough scheme going forward, but had accounted for the JRB , this is a further change and blow to cashflow they will have to remodel quickly.
This is yet another example of reactive changes by the Chancellor causing difficulty for UK business. Surely those businesses not accessing the current furlough scheme should still have been eligible for the JRB.
The Chancellor provided little assistance to businesses struggling with funding. Whilst the application dates for Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loans have been extended to 31 January, many businesses have already exhausted the Bounce Back scheme with its limit of £50,000 in exiting the first lockdown.
We are now in a second wave of the virus and businesses will require additional funding to provide working capital to exit this lockdown. The availability and funding limit of these loans need to be reviewed and increased to provide businesses with additional access to finance.
Once again there was no detail provided on the successor loan scheme announced by the Chancellor in his winter statement some weeks ago and whether this will provide the answers to the funding crisis facing businesses.
It would also have been good to hear from the Chancellor about his plans for business rates in 2021 as clearly those businesses in the most affected sectors – primarily hospitality, leisure and entertainment – need further relief in order to be viable.