Blake Morgan Chairman comments on the Chancellor’s Winter Economic Plan

Blake Morgan Chairman Bruce Potter comments on today’s Winter Economic Plan as the UK tries to recover from a COVID-19 recession.

“The Chancellor of the Exchequer today (24 September) announced his Winter Economic Plan – both bringing forward and cancelling the autumn Budget at the same time. For businesses, the news will be mixed. Some will have hoped to see furlough extended in the wake of an uncertain second wave and the threat of further restrictions, but the Job Support Scheme will provide some solace as we move into the winter. It’s notably less generous, but it’s cheaper for the government and allows companies to maintain employees – who are relatively well-served by the scheme.

The ‘pay as you grow’ scheme will also provide support by allowing companies to pay back government loans over 10 years, drastically reducing total repayment costs and stabilising finances for a longer period of time – but also hinting at how long lasting the repercussions of the pandemic may be. That’s likely to be a concern in some quarters, but it’s another easy giveaway for the government that’s unlikely to cost the Treasury significantly. Similarly, the introduction of instalment payments for VAT bills is a sensible decision that will benefit large numbers of businesses who’ll want to avoid large bills.

We’re in the early phases of a second wave and much remains unknown. Even if restrictions aren’t as harsh as those brought in during the initial outbreak, business confidence is likely to be rattled going into the winter and today’s measures feel cost-effective and proportionate, but we shouldn’t be surprised if more radical decisions are made later in the autumn.”