Among the initiatives, the Coronavirus Business Interruption Loan will be extended for up to 10 years. Businesses who deferred their VAT will no longer have to pay a lump sum at the end of March 2021. Organisations will have the option of splitting the sum into smaller, interest free payments over the course of 11 months.
Meanwhile, the government will launch a new Job Support Scheme as the Furlough Scheme comes to an end in October. The scheme will mostly apply to small and medium organisations. Only large businesses that can prove they have been adversely affected by Covid-19 will be eligible.
The new scheme will start on 1 November and last six months. To be eligible, employees must work a minimum of 33% of their working hours. Employers will pay the hours worked and for the remaining hours not worked the government and the employer need to pay a third each. In this way, employees working a third of their hours will receive at least 77% of their pay.
Mike Hawes, SMMT chief executive, said: "The Chancellor's Job Support Scheme is welcome and should provide temporary relief for the automotive sector, which has been so badly hit by the pandemic, as too will the flexibilities on the loan schemes and tax deferrals. We must make sure it's more than just a short-term lifeline, however, and, like schemes elsewhere, ensure it supports jobs for the duration of the pandemic and recovery.
"We need every manufacturer to hold on to skilled, viable jobs, and government and business must do everything to improve competitiveness and demand. Business remains fragile as we head into a winter of uncertainty, and a 2021 recovery is immensely challenging and far from guaranteed."
Meanwhile, Stephen Haddrill, director general of the FLA, said: "It's good to see that the Chancellor has accepted our recommendation to extend CBILS, and we look forward to seeing what the successor scheme for 2021 will look like. We have already proposed a revised version of the Enterprise Finance Guarantee Scheme. What hasn't been addressed in the announcement, and what continues to be a challenge for our independent lenders, is access to funding that can then be deployed under the guarantee schemes. Our members are ready and willing to support SMEs, but they can't do that without funds."
BVRLA chief executive Gerry Keaney said: "Businesses most affected by the pandemic need all the help they can get right now and we welcome the Chancellor's decision to extend financial support beyond October. Our latest Covid Survey shows that 37% of BVRLA members expect to have employees still on furlough at the end of October, so this additional support will help to stem potential job loss. Our industry is resilient and continues to adapt ways of working to protect lives and livelihoods, but cash is king when it comes to survival and this additional support will provide a lifeline for many organisations that are battling to maintain a sustainable business and protect jobs."
Sue Robinson, NFDA chief executive, said: "We welcome the VAT deferral and the pay as you grow scheme which will give dealers additional time and greater flexibility for their repayments in times when businesses face a number of external challenges. Franchised dealerships have had to implement new working patterns to reduce costs, as a result, the Job Support Scheme could help dealers retain employees whose job is at risk.
"It is important that we continue to monitor how the automotive sector performs in the last quarter of the year to consider any additional support the automotive industry may need going forward. NFDA will now look closely at these measures and provide dealers with further details shortly."