Government's new support measures spark mixed response from Shropshire business community

New support measures unveiled by Chancellor Rishi Sunak for firms hit by the pandemic have sparked mixed reaction from the business community in Shropshire.

Sarah Knowles, co-owner of Big Little Things in Apley
Sarah Knowles, co-owner of Big Little Things in Apley

While some say they will go along way to helping secure the future of many businesses, others say they don't go far enough.

As part of a package of measures the Chancellor said the new job support scheme was aimed at protecting "viable" roles rather than all posts which have been kept going as a result of state support under the furlough programme.

They will be paid for that work as normal, with the state and employers then increasing those wages to cover two-thirds of the pay they have lost by working reduced hours.

He also extended the self-employment income support scheme and 15 per cent VAT cut for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.

Need for clarity

Richard Sheehan, chief executive of Shropshire Chamber of Commerce, said: "Obviously the devil is in the detail and I am sure in the next few days things will unravel to give us a clearer understanding of exactly what it all means.

"While we have been asking for specific support for sectors which have really been under the cosh, to have a scheme accessible for everybody, in principal, has to be welcomed.

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"The Government seems to have recognised the need to support business cash flow. In our own quarterly economic survey 40 per cent of respondents said they had only three months cash available.

"The decision around VAT is also clearly very important. There is no point in having the support schemes if we do not have the businesses for the jobs to be in.

"On the surface the measures look good, but it is vital businesses have clear and precise information on how they will work to help them make decisions in the future."

Mandy Thorn, chair of the Marches Local Enterprise Partnership, said: “It has been clear for some time that the Chancellor had to act to replace the current furlough scheme when it comes to a close at the end of October.

“I am pleased that the new job support scheme will be available to all small and medium sized enterprises, whether they took advantage of the furlough scheme or not, because they play such a vital role in the economy of the Marches. Any help which supports them in staying in business and keeping people in work has to be welcomed.

“The move to keep VAT at five per cent for the tourism and hospitality sector until the end of March will help very many businesses across our region, where tourism plays such an important role in the economy. But the sector has suffered enormously at the hands of this virus and more support is sure to be needed in the coming months. It is disappointing not to see more specific support for some hard-hit enterprises operating within this sector, particularly festivals and weddings, which are so important here in the Marches.

“Extending the time limit on repaying loans and the extension to the grants scheme for the self-employed will also ease the pressure on many businesses at a time when cash flow is so restricted.

“What is really important though is that these schemes are easy and quick to access. Businesses are fighting for their survival and simply will not have the time to go through lengthy bureaucratic processes to sign up for this support.”

What about weddings?

Sarah Knowles, co-owner of florist and gift shop Big Little Things based at Apley, said: “The Chancellor’s announcement is welcomed, but it doesn’t change the fact that the wedding industry is not being treated with parity compared with other sectors, such as hospitality.

"As an example, many of the wedding photographers we know are Limited companies. Where is their income coming from? Most of the wedding industry by the end of March 2021 will have experienced a year of zero turnover. This is very serious.

"All of the wedding industry is crying out for is fair treatment. Weddings should be approached in the same way as restaurants and the capacity of weddings should be based on the venue size.

"The extension to the self employed grant is welcomed if it is based on previous earnings as it has been and not on this year's earnings as obviously it has been dire."

Lisa Snape, sales and marketing manager of the Best Western Valley Hotel in Ironbridge, welcomed the extension of the reduced VAT rates for hospitality, but said it might not go far enough.

"The extension of the lower VAT rates for our industry, which has suffered immeasurably, is of course welcomed. However it has only been extended until March 31 and this is a worry for us.

"With the latest restrictions on weddings we have experienced a repeat of March all over again when so many couples have needed to move their wedding as they do not wish to have just 15 guests. These are not just weddings next week but for the full six month period Boris Johnson suggested the guidelines could be imposed.

"The job support scheme is also welcome but we will need to wait for the details as we fear there could be some stipulations – we need that scheme to cover all businesses and of course those businesses which are most in need.

"The hospitality industry had a short period of support with the Eat Out to Help Out but now we are facing a period of huge uncertainty again.

"His words of 'viable jobs' makes us nervous as it seems it maybe what they consider viable – whereas we consider all of the jobs here at the Valley viable."

Local economy

Edward Goddard, managing director of Shrewsbury-based Morris Leisure, said: “The only measure announced by the Chancellor that will really help us is the extension of five per cent VAT for tourism companies until next March which is welcome.”

Morris Leisure owns six touring and caravan holiday home parks across Shropshire and Snowdonia in North Wales - Shrewsbury, Bridgnorth, Ludlow, Bishops Castle, Llanberis and Betws-y-Coed.

Anton Gunter, managing director at Global Freight Services in Telford, said: “The announcement of the new job support scheme is good news for businesses who won’t be able to offer employees full working hours once the furlough scheme ended

“This measure alone will hopefully go a long way to protecting our local economy and help businesses to hold onto their staff rather than making redundancies.

“Further support when it comes to tax deferrals and loan repayments should also help struggling businesses and help to keep people in employment.”

Kirsty Smallman, co-director of PR-agency J&PR in Wellington, Telford, said: "As a small firm we welcome the continued support with the launch of the new job support scheme which means the flexibility continues.

"Firms who cannot bring back all of their staff full-time will be able to continue a similar set-up as they had with flexible furlough.

"It means business owners will not be forced into a decision between keeping some staff on and making some redundant. They can continue to offer jobs to the staff on reduced hours with support from the Government.

"Rishi Sunak said the new scheme was aimed at SMEs and 'viable jobs' – we hope he considers the amazing small, independently owned businesses such as the ones we have here in Shropshire as viable – whether they have five employees or 500 employees. Every employee is as important as the other – regardless of the size of the business.

Issues addressed?

John Merry, head of employment at law firm Lanyon Bowdler, said: “There have been criticisms of the current furlough scheme about it being used to subsidise the notice pay of employees who are made redundant, which some see as inappropriate.

“Critics also say that in many cases, it is merely postponing redundancy dismissals where the job has already disappeared, and it isn’t targeted at businesses who are being impacted financially by the effects of the pandemic.

“The new scheme addresses these issues, at least in part, as it won’t be possible to make employees redundant whilst they are subject to the scheme, meaning that it cannot be used to subsidise notice payments.

“Under the new scheme, employees must be working at least a third of their normal hours, so the job cannot have disappeared.

“Whilst the scheme will be open to all SMEs, usually defined as businesses with up to 250 employees, larger employers will only be able to participate if their revenue has fallen due to the coronavirus.

"Owners of small Limited companies have often been forgotten through the various schemes and grants so we do hope the scheme supports all businesses of all sizes."

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