On Wednesday 25 November, Sunak set out plans for the UK economy beyond coronavirus Acknowledging the exceptional hardship that the pandemic has inflicted on individuals, families and businesses, the chancellor shared sobering statistics from the Office for Budget Responsibility, which reported that the UK economy will contract by 11.3% in 2020.

Explaining that the health emergency is not yet over and the economic emergency has only just begun, Sunak said the government will continue to support jobs and businesses, prioritising livelihoods. These are some of the ways small businesses could benefit.

Sunak said the government is committed to boosting skills. There will be £291m to pay for more young people to go into further education; £1.5bn to rebuild colleges; and £375m to deliver the prime minister’s Lifetime Skills Guarantee. And traineeships, sector-based work academies, and the national careers service will be extended. Expect to see improvements in the way the apprenticeships system works for businesses, too. 

Community

Local communities know what they need best. So that they can fund impactful, holistic projects and improve their high streets and town centres, the government is launching a new ‘levelling up fund’ worth £4bn for England. Scotland, Wales and Northern Ireland will receive up to £800m off the back of the fund.

It will prioritise bids to drive growth and regeneration in places in need, those facing particular challenges, and areas that have received less government investment recently.

Four deals already under way to drive economic growth in Tay Cities, Borderlands, Moray and the Scottish Islands will be accelerated.

A further £1.1bn will be invested to support farmers, land managers and the rural economy.

Business support

The government has confirmed £519m of funding in 2021/22 to support the continued delivery of coronavirus loans, including paying for the 12-month interest-free period on ‘bounce back loans’ and the Coronavirus Business Interruption Loan Scheme.

It will freeze the business rates multiplier in 2021/22 and is also considering options for further coronavirus-related support through business rates reliefs. It says plans for 2021/22 will be updated in the new year.

To cement the UK’s ambition to become a “scientific superpower”, the government is providing almost £15bn for R&D next year. This will boost the UK’s world-class research base and increase the productivity and international competitiveness of its innovative firms

An additional £56.5m will be provided in 2021/22 to support the vitality and entrepreneurship of the UK by expanding the British Business Bank’s Start-Up Loans to meet the increase in demand and support entrepreneurs to start and grow their business.

The Department for Business, Energy and Industrial Strategy has also been given £50.7m for business support programmes to improve SME productivity through leadership, management and technology adoption.

Science and technology

To cement the UK’s ambition to become a “scientific superpower”, the government is providing almost £15bn for R&D next year. This will boost the UK’s world-class research base and increase the productivity and international competitiveness of its innovative firms.

This includes increased support for net zero innovation, including £200m in 2021/22 for the Net Zero Innovation Portfolio, to develop new decarbonisation solutions and accelerate near-to-market low-carbon energy innovations.

In a commitment to a greener future, more money will be provided to encourage innovative clean energy technologies, which are crucial to tackling climate change.

Pay

Following the recommendations of the independent Low Pay Commission (LPC), the government will increase the national living wage (NLW) for individuals aged 23 and over by 2.2% from £8.72 to £8.91, effective from April 2021. The government has also accepted the LPC’s recommendations to increase the national minimum wage (NMW) rates to apply from April 2021:

• increasing the rate for 21- to 22-year-olds by 2% from £8.20 to £8.36 per hour

• increasing the rate for 18- to 20-year-olds by 1.7% from £6.45 to £6.56 per hour

• increasing the rate for 16- to 17-year-olds by 1.5% from £4.55 to £4.62 per hour

• increasing the rate for apprentices by 3.6% from £4.15 to £4.30 per hour

• increasing the daily accommodation offset rate by 2% from £8.20 to £8.36.

Infrastructure

The government plans to transform the UK’s economic infrastructure with its new National Infrastructure Strategy. It is based around three central objectives: economic recovery; levelling up and unleashing the potential of the UK; and meeting the UK’s net-zero emissions target by 2050.

These objectives will be supported by the creation of a new infrastructure bank based in the north of England to finance major new investment projects starting this spring.

Over £260m will be provided for transformative digital infrastructure programmes, including the shared rural network for 4G coverage, local full-fibre networks, and the 5G diversification and testbeds and trials programmes.

You can read the full 2020 spending review here.