Chancellor Rishi Sunak has used his Budget speech to set out plans to save jobs and stop businesses collapsing as the country emerges from the coronavirus crisis which has seen it facing the biggest national debt for half a century.
Key highlights for businesses include:
- An extension of furlough to September, paying up to 80 per cent of staff wages, a scheme he said he was “one of the most generous of its kind” in the world.
- A £5bn grant scheme to help struggling High Street shops and hospitality firms in England reopen. Grants would be worth as much as £18,000 per firm,
- Nearly 700,000 shops, restaurants, hotels, hair salons, gyms and other businesses will be eligible for the so-called “restart grants.
- Tens of thousands of small businesses will be offered free MBA-style management training to help them boost productivity growth, the Chancellor has said. Under the so called “Help to Grow” scheme, the government will plough £520m into free online courses from top business schools.
- A £126m traineeship scheme, which sees the government pay employers who give young people work placements. Currently the government pays firms £2,000 per trainee, but this will rise to £3,000. He’ll also create a new “flexi-job” apprenticeship in England that will enable apprentices to work with a number of different employers in one sector.
Response was immediate and mixed. James Mcleod, VP EMEA at future work experts, Faethm, said the furlough extension “poses as many questions as it answers”. He added: Yes, it will continue to provide critical stimulus for the economy, but it remains a short-term lifeline for businesses. Questions around the long-term impact of the pandemic on unemployment remain unanswered.
“How will the government ensure jobs remain for those who have been furloughed? How do we ensure returning workers have the skills required to fulfil these roles? Or to generally remain employable?
The Chancellor also needs to think about job support over the long-term and not just for now
Nigel Morris, MacIntyre Hudson
“The Chancellor has emphasised that the government is ‘throwing absolutely everything’ at the problem of unemployment, but tackling the source of the problem – skills – rather than working around it, is the solution.”
And Nigel Morris, employment tax director at MHA MacIntyre Hudson, said extending furlough was the right call but should go hand-in-hand with a return of the Job Retention Bonus scheme and a scaled back, more permanent furlough scheme on the continental model.
“Employers need further incentives to get furloughed employees back to work. The Chancellor also needs to think about job support over the long-term and not just for now,” he added.
Jason Oakley, CEO of Recognise Bank, Britain’s newest SME lender, said: “Britain’s growing businesses are a tough and confident bunch, and the bosses I talk to say they are looking forward to things opening up in the Spring and getting back to business. But many have been hit hard by restrictions and lockdown, with almost half of all small hospitality companies telling us they wanted the furlough scheme to continue beyond the spring.
Pranav Sood, VP of Small Business at GoCardless, said: “Covid-19 and Brexit have created a tough environment for small businesses, so the Government’s Help to Grow scheme couldn’t have come at a better time.
“The widespread adoption of technology will fuel the next wave of growth in this sector and unlock significant gains in productivity. However, there are two major obstacles to achieving this. One is a lack of awareness of the tools and software available to help SMEs. The other is the sense of apprehension many businesses feel when it comes to integrating new technology into their day-to-day operations. The type of training proposed in the Government’s scheme should help to overcome these hurdles.”
Liron Smadja, Senior Director of Global Brand Marketing & International Expansion at Fiverr, said: “The Chancellor’s budget has outlined a new wave of £7,500 grants for the self-employed. Whilst it is positive that this important sector of the economy has been specifically acknowledged, the possibility that the scheme could end by September is concerning.
“Over the coming year, we’ll likely see continued restrictions on the economy and businesses. It is crucial that the Government ensures there is proportionate support for this country’s freelancers and self-employed. Throughout the pandemic and lockdown, many freelancers have slipped through the net and been unable to access support. The government has a responsibility to ensure that all people who have been forced out of work due to the lockdown are afforded the funds they need to get on with their lives.
“Our hope is that the government has taken these actions with a long-term focus on the challenges that freelancers and the self-employed face.”
Oliver Prill, Tide CEO said: “We welcome the fact that today’s was a budget for SMEs and that Government support now goes beyond COVID restrictions ending in June.
“However, we are concerned that September will be too soon to withdraw crucial financial support. With one in five small businesses expecting to make redundancies once the furlough scheme ends there will be huge pressure for small businesses to return to pre-Covid revenue levels in just a matter of months. Pulling the furlough scheme and all other financial support from under small businesses’ feet so soon may pose a real danger.
We hope that its extension will mean we can avoid a sudden surge in unemployment once it is eventually wound down
Darren Upson, Soldo
“We would urge the government to put SMEs at the heart of its building back better agenda. Accounting for around half of the economy, SMEs can make a substantial contribution from levelling up to NetZero and job creation.”
Darren Upson, VP Small Business Europe at Soldo, said the extension of the furlough scheme was a “welcomed relief, having served as a means of allowing SMBs to continue to grow over the last year”.
He added: “While its continuation will help business expansion, this will need to be supplemented with leaders having better visibility of what is happening in their organisations – especially on the money leaving – if they are to manage the continued challenges ahead.
“We also have the furlough scheme to thank for keeping unemployment in check. While it is worrying to see unemployment on the rise, we are certainly not seeing a realisation of the nightmare scenario one might expect from the dramatic government interventions.
“This scheme has allowed many small businesses to go into a necessary hibernation, ready to return when the economy reopens. We hope that its extension will mean we can avoid a sudden surge in unemployment once it is eventually wound down. This would almost certainly have been the case without this extension.”
The Chancellor’s efforts to combine life support for the economy with measures to turbocharge growth is the right call
Jonathan Geldart, IoD
“This news will help them over the final few months until they can start trading fully again and help the UK economy back on the road to recovery.”
Jamie Mckenzie, Director at Sodexo Exchange, said: “Offering MBA-style training to small business leaders is positive news for many in this hard-hit sector. Small businesses are the lifeblood of the UK economy, and this year has seen them confront unremitting challenges.
“Giving SME leaders access to training tools and resources is great, but the government mustn’t overlook the implications the pandemic has had on the mental health of SME leaders. The impact of the last year will be longer lasting with many having to furlough workers and make difficult decisions around redundancies.
“The end of Lockdown roadmap has provided a glimmer of hope, but we are not out of the woods yet. Prioritising mental health and providing support for business leaders will be crucial.”
Jonathan Geldart, Director General of the Institute of Directors, said: “This Budget delivers a solid platform for many businesses to relaunch as the economy reopens.
“The extension to the furlough scheme will provide a vital cushion to support jobs as restrictions unwind and firms begin the costly process of rescaling. Restart grants and ongoing business rates relief give a cashflow boost to many firms that will struggle to make full productive use of their properties as restrictions linger. Widening income support for the self-employed is a step forward, but the Chancellor missed a trick by not providing grants for company directors who continue to be left out in the cold.
“The Chancellor’s efforts to combine life support for the economy with measures to turbocharge growth is the right call.”
Iggy Bassi, CEO and Co-Founder, Cervest said: “The creation of a government-backed green savings bond for retail investors is welcome news as the UK faces mounting pressure to meet its ambitious 2050 net-zero targets.
“Yet, in addition to these headlines around green investment, there is still a real need to support companies to address their existing footprints—including how they assess and manage their physical climate risks. While provisions are being made to help companies meet the standards of climate risk reporting, outlined in the Taskforce for Climate-Related Financial Disclosure (TCFD) framework, what we really need is a single regulatory framework for physical climate risk as a standardised template.
“Organisations need to understand the risks climate volatility present to their assets on an individual level. Greater investment in green finance is positive, but we cannot make tangible change without progressive regulation and access to Climate Intelligence.”