Last reviewed 23 March 2020
In what he described as an unprecedented economic intervention, Chancellor Rishi Sunak announced a package of measures to protect people’s jobs, to offer more generous support to those who are without employment and to strengthen the safety net for those who work for themselves.
“Today I can announce that, for the first time in our history, the Government is going to step in and help to pay people’s wages,” the Chancellor said. “We’re setting up a new Coronavirus Job Retention Scheme.”
Any employer in the country — small or large, charitable or non-profit — will be eligible for the scheme and will be able to contact HM Revenue & Customs (HMRC) for a grant to cover most of the wages of people who are not working but are “furloughed” and kept on payroll, rather than being laid off during the crisis.
Government grants will cover 80% of the salary of retained workers up to a total of £2500 a month (and, of course, Mr Sunak said, employers can top up salaries further if they choose to).
Backdated to 1 March, the scheme will be open initially for at least three months with the Chancellor promising to extend it for longer if necessary.
“I can assure you that HMRC are working night and day to get the scheme up and running,” he said, “and we expect the first grants to be paid within weeks — and we’re aiming to get it done before the end of April.”
However, as many organisations are already struggling, he confirmed that the Coronavirus Business Interruption Loan Scheme will be interest free for 12 months, not for six as previously planned, and will be available from the banks from 23 March.
“To help businesses pay people and keep them in work, I am deferring the next quarter of VAT payments,” Mr Sunak continued. “That means no business will pay any from now until the end of June; and you will have until the end of the financial year to repay those bills.”
Help for self-employed…
The Government has decided to suspend the minimum income floor for everyone affected by the economic impacts of coronavirus. That means every self-employed person can now access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay (SSP) for employees.
In addition, the next self-assessment payments will be deferred until January 2021.
…and the unemployed
The Chancellor has promised to protect people if the worst happens and they lose their jobs.
He will increase the Universal Credit standard allowance, for the next 12 months, by £1000 a year and, for the same period, will raise the Working Tax Credit basic element by the same amount.
Tougher rules on unnecessary social contact
Prime Minister Boris Johnson has said that the time has come to strengthen the measures on reducing unnecessary social contact that were announced only last week.
With immediate effect, he went on, cafes, pubs, bars and restaurants must close as must nightclubs, theatres, cinemas, betting shops, casinos, galleries and concert halls, museums, gyms and leisure centres.
The measures will be strictly enforced, the Prime Minister warned, but will be reviewed each month to see if they can be relaxed.