Chancellor’s Plans Welcomed By The Fleet Industry

Chancellor's Plans Welcomed By The Fleet Industry

The Chancellor’s plans to protect jobs over the course of the second wave of the coronavirus pandemic have been welcomed by fleets…

Fleets Welcome Chancellor’s Plans 

Fleets have welcomed the Chancellor’s plans to protect jobs over the course of the second wave of the coronavirus pandemic. Rishi Sunak told Members of Parliament last Tuesday that the government will continue to pay part of the wages of workers unable to return to the workplace full time. The ‘Jobs Support Scheme’ will replace the Furlough Scheme; paying up to three-quarters of workers’ wages over the course of the next six months. However, the scheme will only apply to “viable jobs” i.e. those jobs in which employees are working at least 33% of their usual hours. Sunak stated that grants will be based on an employee’s regular salary, capped at £697.92 a month.

As of now, three million workers remain partially or completely furloughed. The old scheme will expire on October 31st – with the new one coming into effect on November 1st. According to the British Vehicle Rental and Leasing Association (BVRLA), two-fifths of its members expect to have workers on furlough at the end of October. Gerry Keaney, BVRLA chief executive, said “businesses most affected by the pandemic need all the help they can get right now. We welcome the Chancellor’s decision to extend financial support beyond October. Our latest Covid survey shows that 37% of BVRLA members expect to have employees still on furlough at the end of October. So this additional support will help to stem potential job loss”.

Tax Cuts And Loans 

The Job Support Scheme also comes with an extension of the 15% VAT cut for the tourism and hospitality sectors; it’ll now expire in March. A New Payment Scheme will also provide up to half a million businesses with the option to make repayments in smaller instalments. Instead of making a large lump sum in March, they’ll instead be able to pay in 11 smaller instalments. These will be interest-free during the financial years of 2021 and 2022. The Chancellor’s Plans also include a ‘Pay As You Grow’ repayment system. This extends loan repayments from over six years to ten; cutting repayments by nearly half. Furthermore, interest-only periods of up to six months will also be available to businesses.

In addition to all of this, Sunak announced that applications for loans can now be made until the end of November. He said, “the primary goal of our economic policy remains unchanged – to support people’s jobs”. However, he acknowledged the limitations of any government package “I cannot save every business; I cannot save every job”.

‘Temporary Relief’ 

It remains to be seen how many businesses and jobs will be saved by the plans. But for the fleet and automotive  industries, the measures offer a lifeline. Mike Hawes, chairman of the SMMT, said “the Chancellor’s Job Support Scheme is welcome and should provide temporary relief for the automotive sector; which has been so badly hit by the pandemic. As too will the flexibilities on the loan schemes and tax deferrals”. He continued, “we must make sure it’s more than just a short-term lifeline; and, like schemes elsewhere, ensure it supports jobs for the duration of the pandemic and recovery”.  

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