Coronavirus: Budget cancelled ahead of Chancellor’s jobs plan

The Chancellor, Rishi Sunak, will unveil plans later this morning to try and stem job losses after lockdown restrictions were tightened.  

The new measures are expected to replace the furlough scheme, which is set to expire next month. Some five million workers were having all or part of their wages by the furlough scheme in July, many in the hospitality sector.

Sunak announced yesterday (Wednesday, September 23) that the Autumn Budget would be scrapped this year because of the pandemic.

Instead, he will tell MPs in the Commons today (Thursday, September 24) at around 11.45am how he intends to support those hardest hit.

The Treasury says that the Chancellor had been preparing contingency plans over the summer “in case the pandemic required it". Plans under consideration are believed to include different forms of wage subsidy and more financial help.

He is also thought to be looking at options including a salary top-up scheme, similar to those already operating in France and Germany.

A Fleet News survey has highlighted how coronavirus is impacting the fleet industry. A little less than half (45%) of fleet decisionmakers believe their company car fleet size will decrease as a result of the economic impact of Covid-19.

Of those, 48% predict a reduction of less than 10% while 37% foresee a 10-30% reduction. This is far more pessimistic than data from researcher Fleet Intelligence. whose Q2 Pulse survey showed 17% of companies predicting a reduction in fleet size.  

More offices are reopening to staff with 54% of fleet managers saying they now either work in the office or are doing a combination of office and home (up from 46% in May/June and 27% in the first few weeks of lockdown).

Van operators continue to be busiest with 76% of respondents saying more than three quarters of their company vans are being driven for work (up from 42% in May/June).

To see the full Fleet News coronavirus survey and analysis, click here.

The Finance and Leasing Association (FLA) has urged Government to not ‘prematurely end’ its Covid-19 finance support for UK business in a co-signed letter to the Chancellor.

The letter, signed by leaders from the British Vehicle Rental and Leasing Association (BVRLA), Association of Alternative Business Finance, Consumer Credit Association, Credit Services Association and Innovate Finance yesterday (September 22), urges Sunak to consider carefully the option of continuing the support schemes which have provided “a lifeline to businesses across the UK”.

Graeme Banister, mobility and partnerships director at community car share provider Karshare, said: “While the economy has improved this quarter, it remains volatile. With more redundancies expected in the coming quarter there are grave concerns that removing forbearance, particularly on motor and consumer finance that account for over 80% of total payment freezes requested, will compound the stress on households already struggling to meet their credit commitments.”

Recent research undertaken by Karshare highlights the unprecedented financial strain that the pandemic has imposed on UK households. Of the 1,000 people surveyed, all with a new vehicle secured with either PCP or leasing, a concerning 37% regretted taking out the finance.

Reasons included that ‘it was an extravagance not a necessity’ – and ‘because the world is now not the same’.

Two in five (39%) confirmed that they worry all or most of the time about how to meet their monthly outgoings. Almost half (44%) confirmed they had been granted a payment freeze for their car finance which adds weight to the call for lenders to extend support for borrowers.

Bannister said: “Since the start of the pandemic the Finance and Leasing Association has called for innovation from its members: our research outlines the urgent need for lenders to act on this direction.”