Economic Update from the Chancellor
15th January, 2021
On Monday 11 January 2021, the Chancellor updated parliament on the range of measures the Government are using to support the economy and produced some figures in relation to the current economic climate.
Some highlights of his speech are as follows:
- The UK’s GDP dropped by 18.8% in the second quarter of 2020. The Office for Budget Responsibility’s November forecast showed GDP falling again in the final quarter of 2020 and also forecast the largest fall in annual output for over300 years.
- Since February 2020, over 800,000 people have lost their jobs despite the significant economic support which the Government has put in place.
- The Coronavirus Job Retention Scheme (CJRS) is currently being used by 1.2 million employers to support 10 million employees.
- Nearly £20 billion has been spent on income grants to support almost 3 million self-employed individuals.
- All businesses which have been legally required to close can now claim one-off grants of up to £9,000 for each of their business premises, in addition to the recurring monthly £3,000 previously existing grants.
The Chancellor also stated that “the economy will get worse before it gets better” and hinted at future “difficult but right long-term decisions to come”.
- Consider utilising the CJRS furlough scheme which is currently available until end the of April 2021, which can be utilised in full or flexibly as an effective way of keeping employees on payroll through this difficult period, particularly if you expect an upturn in business in the future.
- If you have been forced to close as a result of the current restrictions, consider applying for government support grants.
If you or your business would like advice in relation to the CJRS or any other Employment law related matter please contact a member of our team.