Last week, the Chancellor set out he first stage of our response to tackle Coronavirus with a £30 billion package of support for people and businesses. He promised then to do whatever it takes to support our economy through this crisis – and the Government will do whatever it takes.
Today, the Chancellor has announced an unprecedent package of government-backed loans and guarantees to support business. He has made available an individual £330 billion of guarantees – equivalent to 15 per cent of our GDP – so any business who needs access to cash to pay their rent, the salaries of employees, pay suppliers or purchase stock will be able to access a government-backed loan.
He has also announced tax cuts for British businesses to protect jobs worth £30 billion, and following discussions with the mortgage industry, the Government is introducing a three month mortgage holiday for those in difficulty due to coronavirus.
Supporting affected individuals
- A three month mortgage holiday for those in difficult due to coronavirus. In the coming days, Government will go much further to support people’s financial security by working with trade unions and business to develop new forms of employment support to help protect people’s jobs and incomes throughout this period.
This is in addition to £1 billion worth of measures announced in the Budget last week, which includes:
- Increasing eligibility criteria for Statutory Sick Pay (SSP) – with doctors notes available via NHS 111. SSP will be able from day one for people who have COVID-19. This will cover those unable to work because they have been advised to self-isolate.
- Supporting those who are ineligible for SSP by giving people quicker and easier access to benefits. For those not eligible such as the self-employed and employees below the Lower Earnings Limit, the benefits system will be the best system of support. The Government will:
- Make it payable directly to people affected or self-isolating from the first day rather than eighth.
- Ensure people will be able to claim Universal Credit and access advanced payments without the current requirement to attend a job centre.
- Relax the requirement of the minimum income floor in Universal Credit for those directly affected by COVID-19 or self-isolating according to advice.
Government is also providing a £500m Hardship Fund so that Local Authorities can support the economically vulnerable and households in their local area. It is expecting most of this funding will be used to provide more council tax relief.
- Support liquidity amongst large companies with a major new scheme that is being launched by the Bank of England.
- Support lending to small and medium-sized business by extending the Business Interruption Loan Scheme that was announced in last weeks Budget. This means that rather than providing loans of £1.2 million it will provide loans of up to £5 million with no interest for the first six months.
- Both of these schemes will be up and running by next week. The Chancellor will also be taking a new legal power in the Emergency Legislation to offer whatever financial support is necessary.
- Helping all businesses in the retail, hospitality and leisure sectors meaning that none of these companies will have to pay business rates.
- Small businesses with a rateable value of less than £51,000 in these sectors will have access to an additional grant scheme of up to £25,000.
- Grants for the smallest businesses of £10,000, supporting their cash flow.
Finally, small and medium-sized businesses will be helped to cope with the extra cost of paying Statutory Sick Pay by refunding eligible SSP costs. The criteria will be:
- The refund will be limited to two weeks per employee who has claimed SSP as a result of Covid-19.
- Employers with fewer than 250 employees will be eligible
- Employers should keep records but should not require employees to provide a doctor’s note.
- The eligible period will commence from the day on which regulations extending SSP come into force.
- We will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible.
These measures are designed to help businesses and individuals cope with the pressures of the current public health situation. The Chancellor has been clear that it will do whatever it takes to help businesses and individuals.
In the coming days, the Chancellor will take further steps with a focus on supporting people and individuals.
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