Chancellor to announce 'Winter Economy Plan' as Autumn Budget scrapped

By James McAllister

- Last updated on GMT

Chancellor Rishi Sunak to unveil 'Winter Economy Plan' Coronavirus furlough VAT cuts loans

Related tags: Coronavirus, Government, Restaurant, Chancellor of the exchequer, Job Retention Scheme, Furlough

Chancellor Rishi Sunak is to unveil a 'Winter Economy Plan' later today (24 September) that is expected to include a wage subsidy programme to help protect workers still furloughed.

It comes as the Treasury confirmed that plans for an Autumn Budget this year have been scrapped, by the Chancellor, because of the Coronavirus pandemic.

Sunak says this latest package of support, which he will announce in a statement to the House of Commons at lunchtime, will 'continue protecting jobs through the winter'.

Various reports​ suggest the centrepiece of the package will be a scheme, modelled on one in Germany, in which taxpayers subsidise the wages of workers returning to work part time after being furloughed.

The new wage subsidy programme would replace the current Coronavirus Jobs Retention Scheme (JRS), which is set to close at the end of October.

It is also expected that the current VAT cut to 5% for the hospitality and tourism industries will be extended from next January until the end of March.

As reported earlier this week​, the Treasury’s UK-wide programme of business support loans is also likely to be extended until the end of November, with the terms increased from six to 10 years to reduce monthly repayments.

Calls for the Government to announce a further package of support to help struggling restaurants and pubs have grown exponentially within the sector this week, following the decision by Westminster and the devolved governments to impose a 10pm curfew on all hospitality venues​. 

Yesterday (24 September), trade bodies the British Beer & Pub Association (BBPA), UKHospitality and the British Institute of Innkeeping (BII) unveiled new findings showing that almost a quarter (23%) of their members think their businesses will fail by the end of the year without further Government support.

The findings, from a survey of members of all three trade associations conducted by hospitality market research company CGA before the new restrictions were even announced, reveal the high level of concern about the future of the pub and wider hospitality sector.

On average, businesses believe their workforce will be 25% lower by February 2021 compared to February this year – a decline of 675,000 jobs lost from the sector in a year.

One in eight hospitality staff have already been made redundant, with many more expected once the JRS comes to an end.

Only 7% of respondents said they were feeling optimistic about the prospects of the hospitality sector over the next 12 months, down from 23% in August and 19% in July when respondents were previously asked the same question.

As well as an extension to the VAT and business rates holiday for the sector, the trade bodies have called for a sector-specific employment support package, but there are currently no suggestions this will be included in today's announcement by the Chancellor.

Responding to news of the Chancellor's 'Winter Economy Plan', UKHospitality chief executive Kate Nicholls tweeted​: ”With significant additional restrictions on hospitality and many businesses fully closed by law, it is vital this is not a one size fits all subsidy and proportion of wages covered flexes to take account of restrictions. Hospitality workers substantially worse off.”

Related topics: Business

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