The COVID 19 pandemic has had a great impact on all facets of our lives, from how we socialise to how we work, and everything in between. As well as the devastating human cost, the pandemic has also ravaged world economies, forcing governments to introduce measures to protect, as best they can, businesses in their country. Rishi Sunak, Chancellor of the UK has announced his Winter Plan in his recent budget speech, aiming to maintain social distancing but with an effort to keep the economy afloat, especially on the run up to Christmas. This comes as a relief to some sectors such as retail, but for others an atmosphere of uncertainty remains as we approach the festive season. Let’s take a closer look at the Winter Plan and what it might mean for your business.
What is the Winter Plan?
As the UK approaches the end of its second lockdown, Rishi Sunak has announced the government’s plan to keep businesses trading as much as possible, as well as minimising disruption to the public’s preparations for Christmas. The UK will be operating on the three-tier system (details below), meaning that some non-essential businesses will be allowed to open. This will bring a huge sigh of relief from small or independent businesses – those allowed to open include leisure facilities, gyms, hair and beauty salons, and many shops. Limited numbers of spectators will be permitted to enter sports events, and weddings will be allowed.
Bars and restaurants
Socialising is being limited by the tier system rolled out across the UK, and bars and restaurants are dismayed by the Chancellor’s announcement. However, to contain the virus these drastic measures appear to be necessary.
The three-tier system is as follows:
Tier 1: everyone will be encouraged to minimise travel and work from home where possible
Tier 2: alcohol may only be served in hospitality settings as part of a substantial meal;
Tier 3: bars and restaurants closed except for delivery and takeaway, all other indoor entertainment prohibited.
This obviously has huge repercussions for the hospitality industry, with bars, restaurants and pubs facing an increasingly uncertain future, especially as it is still unclear which regions of the country will be assigned which tier. Every 14 days the situation will be reviewed. For pubs and bars in tier 1 where drinking is allowed, last orders are now at 10pm, with the establishment closing by 11. The rule of 6 will still apply.
Some areas of the economy have been hit more than others, and some have mixed fortunes. Small businesses can be vulnerable at the best of times, so are particularly hard hit by the pandemic. Marketing companies provide a good example – while digital marketing channels have dominated the way we promote products, there was still a good case for using traditional printed materials, and many companies are still in production. However, even though shopping has returned under the Winter Plan, people are not eager to pick up and physically interact with materials, wary of infection. However – like many other sectors – the print industry knows it has to adapt to the pandemic and survive it. The government has announced schemes which will offer a lifeline to companies which may be at risk.
Support for small businesses
As part of the Winter Plan, Sunak announced that some pre existing schemes were being adapted or extended to combat the economic effects of the pandemic. The Job Support Scheme (JSS) is a follow up to the Coronavirus Job Retention Scheme, which will transition in early December. There are two types, the JSS Open which is for companies not required to close, but who may experience a dramatic downturn of business due to the restrictions, and the JSS Closed, for companies required to cease trading. For self-employed and freelance workers, the Self-Employed Income Support Scheme has been updated, and VAT payments are being deferred. The terms of ‘bounce back’ loans being issued to small businesses have been updated, and the ‘pay as you grow’ scheme offers recipients of those loans the opportunity to extend the repayment window from six to ten years.
As Britain and the rest of the world brace themselves for a hard winter, the government is desperately trying to limit the damage to the economy. But until the pandemic is over, the future looks anything but certain, especially for small businesses.