Businesses welcome Sunak’s change of tack but say many still ‘left behind’
Business groups have praised Rishi Sunak’s change of course on his winter economic support package, which the chancellor has made more generous to employers hit by Tier 2 restrictions.
Yet organisations said there was a lack of support for companies further down supply chains, for freelancers and for many self-employed people.
Addressing Parliament today, Sunak announced a new grant for struggling hospitality firms worth up to £2,100 a month, which can be backdated to August. And he beefed up grants for the self-employed.
He also overhauled the job support scheme. Businesses will now pay just five per cent of employees’ wages for unworked hours, compared to 33 per cent as originally planned.
Yet Labour said it was obvious two weeks ago that Sunak would have to change his plans. Shadow business secretary Ed Miliband said the chancellor “has been forced to move and patch up his own plan, but thousands of jobs have been lost”.
Sunak’s changes ‘much-needed’
Dame Carolyn Fairbairn, head of the CBI, said the new job support scheme is “welcome and much-needed”.
Workers will now only have to work at least 20 per cent of their normal hours to be eligible.
Jonathan Geldart, director general of the Institute of Directors (IoD), said: “A substantial reduction in the employer contribution is a crucial step, reflecting our members’ concerns”.
He also praised the national approach. He said this will “help to cut through the confusion of different tiering systems and backroom political negotiations”.
Federation of Small Businesses (FSB) chair Mike Cherry welcomed the new grants. He praised the fact that they can be applied retrospectively.
He said this would relieve “thousands of businesses who have been left wondering how they’ll survive”.
London Chamber of Commerce and Industry (LCCI) boss Richard Burge suggested the problems could have been addressed sooner.
“The impact of Tier 2 on hospitality businesses, yet the lack of support available, was clear to see,” he said.
Small company directors and freelancers ‘still left behind’
Cherry said there “are still many who have been left behind”. The FSB and the IoD said small company directors “have been ignored”.
Many small company directors pay themselves through dividends, often for tax purposes. This means they have struggled to access job support. Geldart said it was “deeply frustrating” that the chancellor did not address this issue.
The chancellor also offered “very little” to freelancers and contractors, said Seb Maley, chief executive of tax and insurance specialist Qdos.
“These measures are generous to businesses with premises, firms with employees and many sole traders,” Maley said. “But [they] offer very little – if anything – to millions of independent workers.”
Burge of LCCI highlighted that London’s hospitality sector will still struggle under the government’s rules.
He said it will “be hoping that in light of Tier 2 restrictions, the basis for the 10pm curfew is reassessed”.
Both the LCCI and the Recruitment and Employment Confederation urged the government to “rapidly improve” the test and trace system. Burge said it was “undermining” the economic recovery.