Chamber Reacts to Chancellor's Extension of Furlough Scheme
Commenting on the Chancellor’s decision to extend the Coronavirus Job Retention Scheme, Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce, said: "Breaking the recent trend of last-minute interventions to offer measures to mitigate the adverse economic impacts of COVID-19, the Chancellor today unveiled weighty additions to the package of support available to businesses.
"Notable amongst them is the extension to the Coronavirus Job Retention Scheme, which will now be available until March 2021 on the 'August 2020' terms, under which the government will continue to pay up to 80% of workers' wages and employers covering the cost of Employer NICs and pension contributions. Reportedly, these were hotly debated topics within Whitehall but the fact this additional support has now been offered is great news.
"We at Greater Manchester Chamber welcome today's announcements. Along with the enhanced income support grant for the self-employed, today's package is an important step in providing certainty to business not just for the duration of the second lockdown, but through the festive trading period and into 2021.
"Greater Manchester Chamber’s sixth GM COVID-19 Recovery Tracker survey, covering the first three weeks of October, found that customer demand has decreased since September. There was an associated worsening in cash positions for many businesses. Diminished cash reserves and poor business confidence will likely thwart any expansion in productive capacity, so investment prospects are likely to be subdued. Under these circumstances, the business community needs clarity and assurance that the government will provide support to avert business failure and unemployment.
"Since August, Greater Manchester Chamber has consistently called for support to be commensurate with the restrictions imposed on businesses. We have also had reservations about piecemeal extensions to support measures and urged the government to chart a longer-term recovery plan. That plan should include concrete steps to prevent further spread of COVID-19, which might necessitate yet another lockdown. That means the government should utilise the four-week lockdown period as an opportunity to radically improve the Test, Track and Isolate system. Let us be clear: there is no substitute for a fully functioning economy.
"It is certain that COVID-19 will remain unpropitious to the economy, business growth and employment for many more months. Today's intervention by the Chancellor, the seventh since March, may not be the last. Had the extension to the furlough scheme been made in September, it is likely that some jobs would have been saved. Yet, late as it may be, we know that businesses across the country will have sighed a breath of relief this afternoon. Better early than late but better now than later, or never."