The Chancellor announces new support measures – comment from Tilney

Today, Chancellor Rishi Sunak unveiled a new range of measures to support employees and businesses during the ongoing pandemic. Jason Hollands, managing director at wealth manager Tilney, gives his response.

“The Chancellor’s statement today was a blunt recognition that not every business or job impacted by pandemic can be saved and that the crisis is leading to an acceleration of structural shifts in the UK economy. The key risk to the recovery has always been the prospect of rising unemployment choking off consumer spending and fuelling a vicious cycle. That threat has clearly escalated materially with the tightening of COVID-19 restrictions announced this week at a point when the furlough scheme is shortly coming to an end.

“The support measures announced today, notably the Jobs Support Scheme are a welcome lifeline to try and but more time and encourage employers to allay redundancy programmes. But it remains be seen to whether this has arrived too late in the day to cause businesses to abandon head count reduction plans that they may have been on the cusp of announcing next week ahead furlough ending.

“The costs of the pandemic for the public finances continue to balloon and the crisis has this week caused the Chancellor to delay the Budget until next year. The additional support measures announced today underline the severe challenges facing the economy but also point to the very tough choices that lay ahead with the prospect of future spending restraints and tax rises. This will be incredibly difficult balancing act, as there really is no such thing as a free lunch. Reductions in public spending and increases in taxation will have economic and personal consequences and people would therefore be wise plan their financial affairs accordingly.”