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Economy Update

Volume 686: debated on Thursday 17 December 2020

Covid-19 is the biggest threat this country has faced in decades and, throughout the first and now second waves of the virus, the Government have sought to protect people’s jobs and livelihoods while also supporting businesses and public services across the UK, with over £280 billion of support spent so far. The vaccine deployment is a milestone in the recovery from the pandemic and the eventual return to normal life. While vaccination of the most vulnerable people has begun, it will take some time for the vaccine to be rolled out to the wider population. During this time, the Government remain committed to supporting people and businesses and providing them with the certainty they need.

In my previous statement to the House on 5 November 2020, I said we would review the scheme in January 2021. However, to provide certainty to businesses so that they can plan for the remainder of the winter and the new year, we have undertaken this review earlier. As the CJRS is already UK-wide, these changes will continue to apply to all devolved Administrations.

Following my last update in November, I can announce today that the coronavirus job retention scheme (CJRS) will be extended by another month, until the end of April 2021, with employees continuing to receive 80% of their current salary for hours not worked. Employers will be required to pay wages, national insurance contributions (NICS) and pensions for hours worked; and NICS and pensions only for hours not worked. The eligibility criteria for the scheme will remain unchanged, as I have previously set out.

The Government-guaranteed covid-19 business loan schemes—the coronavirus business interruption loan scheme (CBILS), the coronavirus large business interruption loan scheme (CLBILS) and the bounce back loan scheme (BBLS) have been open since the spring. As of 13 December, over 1.5 million businesses have been supported with facilities worth more than £68 billion.

To support UK businesses through continuing economic disruption, the Government have decided to extend the closing date to new applications for CBILS, CLBILS and BBLS. The schemes, currently due to close on 31 January 2021, will now be open to applications until the end of March. Together, the schemes provide vital support across all sectors of the UK economy for businesses who have been impacted by coronavirus. The loans can be used to support businesses with any liquidity needs, whether covering costs, additional expenditure or investment. We are extending the schemes now, ahead of Christmas and further into the new year, to provide businesses with continued access to the support they need through any continued disruption in early 2021. The British Business Bank will provide accredited lenders with further guidance in due course.

The Government will provide a further update on covid-19 economic support at Budget, which will be held on 3 March 2021.