Browsing: Economy

Economy
Covid leaves 6m UK small businesses and 16m jobs in 'precarious position'

An estimated 6m small businesses in the UK supporting 16.6m jobs are in a financially precarious position as a result of the pandemic, a London business school has warned. Nearly two-thirds of entrepreneurs felt their business might not survive the pressures of Covid-19, while more than half predicted they would run out of money within the next 12 months, according to the new study from King’s Business School. Adding to the gloom, two out of three small firms in a separate survey of 1,500 small businesses said they expected trading to get worse. In the poll by the Federation of Small Businesses (FSB), the small firms said they expected an “incredibly difficult” trading period in the run-up to Christmas and the end of the Brexit transition period. The studies follow criticism by the Labour party that almost half a million self-employed workers have been “left in the lurch” by government support, which covers only two-fifths of their normal income despite the onset of tougher coronavirus restrictions. Rishi Sunak said last Thursday that he would significantly expand the coronavirus-related job support scheme to pay a larger share of workers’ wages than initially planned,

Economy
Sunak must extend universal credit or be forced into another U-turn

Right from the start of the Covid-19 crisis the government was never in any doubt about the implications of putting the economy into deep freeze.The Treasury knew it was going to be bad, so there was a furlough scheme for employees, financial assistance for the self-employed, grants, loan guarantees, a business rates holiday, a deferral of VAT, and a £1,000-a-year increase in universal credit.The last of these – the £20 a week increase in UC – has tended to be overlooked in recent months as attention has focused on what should replace the furlough, but as things stand the temporary increase will be reversed next April.Make no mistake, this has all the hallmarks of a slow-burn crisis for the government that it would do well to address while it has the time. Otherwise, it will eventually be forced into yet another U-turn at a moment not of its own choosing.The Treasury says it is keeping UC under review, but its message is that the extra £20 a week comes at a hefty cost – £9b this year – and that there is only so much money to go round. More for welfare means less for other public services. It is

Economy
Only state investment can revive Britain's zombie economy | Phillip Inman

Britain is sleepwalking into a debt crisis that will undermine its prospects of a sustainable recovery. It’s not the debts of the government that are at issue; it is the monumental amount of borrowing by the private sector, much of it from the Treasury, that will hang like a dead weight on the shoulders of thousands of businesses, possibly for a decade. Last week, Rishi Sunak tore up his much-criticised winter jobs protection plan and took the humiliating decision to breathe more life into his existing furlough scheme. The cheap and not-so-cheerful job support scheme (JSS) was revamped to the point where it looks almost exactly like its predecessor, the job retention scheme (JRS), which was due to end on 30 October, but now lives on in an old/new guise. This support for staff and about 2.5 million self-employed workers, welcome though it is, distracted attention from the huge and growing number of lifeboat loans taken out by businesses across the country in a desperate bid to stay afloat. The most recent figures show that while 623 large businesses have borrowed the relatively small total of £4.6bn via the coronavirus large business interruption

Economy
'Left in lurch': Sunak under fire for lack of self-employed support

Almost half a million self-employed workers have been “left in the lurch” by government support covering just two-fifths of their normal income despite the launch of tougher coronavirus restrictions, Labour has warned. In an attack on the chancellor, Rishi Sunak, for offering thousands of people less support than was available during the first national lockdown, the party said hundreds of thousands of people would be left struggling through a difficult winter. According to the Labour research, an average self-employed worker in the arts or hospitality sector will get just £450 a month from the Treasury’s self-employed income support scheme (SEISS). This is half the level during the first lockdown. The party estimates half a million self-employed people work in sectors of the economy that are either shut or struggling under the weight of new Covid-19 restrictions. The Labour criticisms came after Sunak announced a multibillion-pound expansion of job support for businesses, employees and the self-employed on Thursday amid mounting pressure on the government to act. As much as £3.1bn is being made available to self-employed workers, increasing the value of the grants they can access to cover lost income from 20% to 40%

Economy
Second Covid wave hitting UK economic recovery, data shows

Marston’s – 2,150 jobs15 October: Marston’s  – the brewer which owns nearly 1,400 pubs, restaurants, cocktail bars and hotels across the UK – said it would cut 2,150 jobs due to fresh Covid restrictions. The company has more than 14,000 employees. Whitbread – 6,000 jobs22 September: Whitbread, which owns the Premier Inn, Beefeater and Brewers Fayre chains, said it would cut 6,000 jobs at its hotels and restaurants, almost one in five of its workforcePizza Express – 1,100 jobs7 September: The restaurant chain confirms the closure of 73 restaurants as part of a rescue restructure deal.Costa Coffee – 1,650 jobs3 September: The company, which was bought by Coca-Cola two years ago, is cutting up to 1,650 jobs in its cafes, more than one in 10 of its workforce. The assistant store manager role will go across all shops.Pret a Manger – 2,890 jobs27 August: The majority of the cuts are focused on the sandwich chain’s shop workers, but 90 roles will be lost in its support centre teams. The cuts include the 1,000 job losses announced on 6 July.Marks & Spencer – 7,000 jobs18 August: Food, clothing and homewares retailer cuts jobs in central support centre, regional management and stores.M&Co –

Economy
With 10 days to go, time and history are not on Donald Trump's side

It all looked so simple for Donald Trump as he took the stage at the World Economic Forum in Davos in January this year. At the start of an election year, the annual gathering of the global business elite was an opportunity to launch his campaign. It was one Trump eagerly seized. The next 30 minutes was one long boast, detailing how a US economy that had allegedly been on its knees under Barack Obama had been transformed under his stewardship. “Today I’m proud to declare that the United States is in the midst of an economic boom the likes of which the world has never seen before,” Trump told a packed hall. “We’ve regained our stride, we discovered our spirit and reawakened the powerful machinery of American enterprise. America is thriving, America is flourishing and, yes, America is winning again like never before.” Trump knew his history. Most incumbent presidents since the second world war had seen off their challengers, and the ones that hadn’t – Gerald Ford in 1976, Jimmy Carter in 1980 and George Bush Sr in 1992 – were not helped by an underperforming economy. So, with the stock

Economy
'It would pay for one worker': tier 2 businesses on latest Covid funding

Businesses in areas of England subject to tier 2 restrictions have welcomed extra support measures announced by the government but say the future still looks bleak if Covid-19 restrictions persist. The chancellor, Rishi Sunak, said on Thursday that firms in tier 2 areas would be eligible for monthly grants of up to £2,100 and an increased government contribution to workers’ wages under the job support scheme. The support is primarily aimed at the hard-hit hospitality, accommodation and leisure sectors, but firms said crippling rents, reduced trade and the fact that some sectors weren’t eligible for business rates relief meant they would still struggle. Pub landlord: ‘Nowhere near what we need to break even’ Paul Garner, the landlord of the Yorkshire Grey pub in the Holborn area of central London, said he was happy to receive any funding at all but that it was “a little bit too late”. “We’ve already had to make huge redundancies due to the lack of trade. They’ve had their P45s issued. If we’d had it before, we would have been able to keep people in work.” The grant money comes as a welcome boost but may not go

Economy
Sunak has stopped digging, but can he clamber out of his Covid hole?

U-turns are always hard for politicians but Rishi Sunak’s was more humiliating than most. It was only last month that the chancellor was congratulating himself on the generosity of his winter economy plan, which scaled back the Treasury’s financial support just as the Covid-19 pandemic was entering a more threatening phase. Yet from the moment Sunak announced the details of his WEP it was clear that he would have to come up with more or risk businesses go bust in their droves. Now the chancellor has sought to address the design flaws by reducing the amount employers will need to contribute to top up the wages of employees working part time, by making government grants more widely available to struggling businesses, and by increasing support for the self-employed. Sunak hopes this will deal with two problems, one national and one local. The national problem was the contribution the Treasury expected businesses to make to the wages of part-time employers at a time when the summer recovery in the economy has petered out. Under the furlough scheme, the state paid 80% of a worker’s wages and employers paid nothing. From August, the employers’ contribution

Economy
UK coronavirus live: Rishi Sunak announces new support package for tier 2 business and workers

Key events Show 7.02am EDT07:02 Full details of Sunak’s beefed-up Covid support for workers and businesses 6.57am EDT06:57 Labour says Sunak should apologise to people who have lost their jobs already 6.49am EDT06:49 Sunak announces grants for firms affected by tier 2 rules, paid retrospectively back to August 6.44am EDT06:44 Rishi Sunak’s statement 6.43am EDT06:43 Figures for close contacts reached by test and trace hit new low, latest figures show 6.37am EDT06:37 People now waiting around 48 hours for test results, double what PM promised, latest figures show 6.13am EDT06:13 Welsh government nationalises rail services as Covid hits revenue Live feed Show

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