This update has seen unprecedented intervention with a combination of measures. These measures go towards protecting people’s jobs, offering more generous support to those who are without employment, strengthening the safety net for those who work for themselves and helping people to stay in their homes.
Protect people's jobs
The Chancellor announced a new Coronavirus Job Retention Scheme. Any employer in the country, small or large, charitable or non-profit will be eligible for this scheme. Employers will be able to contact 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. Government grants will cover 80% of the salary of retained workers up to a total of £2,500 a month, just above the median income. Employers can top up salaries if they choose to. This means workers in any part of the UK can retain their job even if employer cannot afford to pay them and be paid at least 80% of their salary. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to 1 March and will be open initially for at least 3 months. The Chancellor is prepared to extend the scheme for longer if necessary. The Chancellor is placing no limit on the amount of funding available for the scheme.
The Chancellor expects the first grants to be paid within one week and to get this done before the end of April.
There's been a change to the previously announced Coronavirus Loan Interruption Scheme. This will now be interest free for 12 months (instead of 6). These loans will be available starting from Monday 23 March 2020.
The chancellor intends to announce further measures next week to ensure that larger and medium sized can also access credit they need.
The chancellor also announced further support for cash flow support through the tax system. In order to help keep people in work the chancellor announced that he is deferring the next quarter of vat payments. This means no business will pay any VAT until the end of June and they have to the end of financial year to repay those bills. This is a direct injection of over £30 billion of cash to businesses, equivalent to over 1.5% of GDP.
There will be a major national advertising campaign to communicate the support available to businesses.
Strengthen the safety net for vulnerable households
Th Chancellor announced that the government would be Increasing the universal credit standard allowance for the next twelve months by £1,000 a year.
For the next twelve months, the Chancellor is also increasing the working tax credit basic element by the same amount. Together these measures will benefit over 4 million of our most vulnerable households.
Strengthening the safety net for self-employed people
The Chancellor is strengthening the safety net for self-employed people by suspending the minimum income floor for everyone affected by the economic impacts of coronavirus.
This means self-employed people can now access in full Universal Credit at a rate equivalent to statutory sick pay for employees
Taken together the chancellor is announcing nearly £7 billion of extra support through welfare system to strengthen the safety net and to protect people’s incomes.
To support the self-employed through the tax system the chancellor also announced that the next self-assessment payments will be deferred to January 2021.
Support for renters
The Chancellor has announced nearly £1 billion for renters by increasing generosity of housing benefit and universal credit so that the local housing allowance will cover at least 30% of market rents.