Tag: Economy

Chancellor extends furlough scheme until October

The government’s Coronavirus Job Retention Scheme will remain open until the end of October, the Chancellor announced today.

  • Coronavirus Job Retention Scheme will continue until end of October
  • furloughed workers across UK will continue to receive 80% of their current salary, up to £2,500
  • new flexibility will be introduced from August to get employees back to work and boost economy

In a boost to millions of jobs and businesses, Rishi Sunak said the furlough scheme would be extended by a further four months with workers continuing to receive 80% of their current salary.

As we reopen the economy (at least in England – Ed.), we need to support people to get back to work. From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.

The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.

Chancellor Rishi Sunak said: “Our Coronavirus Job Retention Scheme has protected millions of jobs and businesses across the UK during the outbreak – and I’ve been clear that I want to avoid a cliff edge and get people back to work in a measured way.

“This extension and the changes we are making to the scheme will give flexibility to businesses while protecting the livelihoods of the British people and our future economic prospects.”

New statistics published today revealed the job retention scheme has protected 7.5 million workers and almost 1 million businesses.

The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August. More specific details and information around its implementation will be made available by the end of this month.

The government will explore ways through which furloughed workers who wish to do additional training or learn new skills are supported during this period. It will also continue to work closely with the Devolved Administrations to ensure the scheme supports people across the Union.

The Chancellor’s decision to extend the scheme, which will continue to apply across all regions and sectors in the UK economy, comes after the government outlined its plan for the next phase of its response to the coronavirus outbreak.

The scheme is just one part of the government’s world-leading economic response to coronavirus, including an unprecedented package for the self-employed, loans and guarantees that have so far provided billions of pounds in support, tax deferrals and grants for small businesses.

Today the UK government is also publishing new statistics that show businesses have benefitted from over £14 billion in loans and guarantees to support their cashflow during the crisis.

This includes 268,000 Bounce Back Loans worth £8.3 billion, 36,000 loans worth over £6 billion through the Coronavirus Business Interruption Loan Scheme, and £359 million through the Coronavirus Large Business Interruption Loan Scheme.

Mike Cherry, National Chairman of the Federation of Small Businesses, said: “The Job Retention Scheme is a lifeline which has been hugely beneficial in helping small employers keep their staff in work, and it’s extension is welcome.

“Small employers have told us that part-time furloughing will help them recover from this crisis and it is welcome that new flexibility is announced today.

BCC Director General Adam Marshall said: “The extension of the Job Retention Scheme will come as a huge help and a huge relief for businesses across the UK.

“The Chancellor is once again listening to what we’ve been saying, and the changes planned will help businesses bring their people back to work through the introduction of a part-time furlough scheme. We will engage with the Treasury and HMRC on the detail to ensure that this gives companies the flexibility they need to reopen safely.

“Over the coming months, the government should continue to listen to business and evolve the scheme in line with what’s happening on the ground. Further support may yet be needed for companies who are unable to operate for an extended period, or those who face reduced capacity or demand due to ongoing restrictions.”

Dame Carolyn Fairbairn, CBI Director-General, said: “The Chancellor is confronting a challenging balancing act deftly. As economic activity slowly speeds up, it’s essential that support schemes adapt in parallel.

“Extending the furlough to avoid a June cliff-edge continues the significant efforts made already and will protect millions of jobs.

“Introducing much needed flexibility is extremely welcome. It will prepare the ground for firms that are reawakening, while helping those who remain in hibernation. That’s essential as the UK economy revives step-by-step, while supporting livelihoods.

“Firms will, of course, want more detail on how they will contribute to the scheme in the future and will work with government to get this right.

“Above all, the path of the virus is unpredictable, and much change still lies ahead. The government must continue to keep a watchful eye on those industries and employees that remain at risk. All schemes will need to be kept under review to help minimise impacts on people’s livelihoods and keep businesses thriving.

“The greater the number of good businesses saved now, the easier it will be for the economy to recover.”

Commenting on the extension of the government’s job extension scheme today, TUC General Secretary Frances O’Grady said: “We are pleased ministers have listened to unions and extended the job retention scheme to the autumn. This will be a big relief for millions.  

“Changing the rules to allow part-time working is key to enabling a gradual and safe return to work. And maintaining the rate at 80% is a win for the pay packets of working families.

“As the economic consequences of Covid-19 become clear, unions will keep pushing for a job guarantee scheme to make sure everyone has a decent job.”

Anneliese Dodds MP, Labour’s Shadow Chancellor, said: “The furlough scheme is a lifeline for millions. The Government was right not to pull it away.

“It is welcome that the Chancellor has heeded the call by Labour, trade unions, and businesses for more flexibility in the scheme, to support employees to go back to work part-time.

“The government must clarify today when employers will be required to start making contributions, and how much they’ll be asked to pay. If every business is suddenly required to make a substantial contribution from the 1st August onwards, there is a very real risk that we will see mass redundancies.”

Extension to Furlough Scheme could cost the Government £70 billion

The Chancellor has extended the current Furlough scheme until the end of October but he now has a huge challenge to get this right, say leading tax and advisory firm Blick Rothenberg.

Heather Self a partner at the firm said: “He needs to achieve a “Goldilocks” effect – not too hot, and not too cold.  If he provides too much it will be very expensive and may discourage firms from reopening. If he provides too little thousands of people could lose their jobs.

She added: “It is going to be a turbulent time for the labour market in the Autumn. Some sectors, such as the hospitality and tourism sector, are likely to see significant redundancies, while others such as construction and financial services will be relieved to see a gradual winding-down of support.

From the announcement today, we now know that:

–          Support will be continued to the end of July in full, with employers required to contribute after that date.

–          Part time working will be permitted, but only for some employees

–          The same level of overall support – 80% of wages up to a maximum of £2500 a month – will be maintained

Heather said: ” As the furlough scheme is reduced the Government needs to incentivise business and come up with creative ideas about how business can keep going and retain staff.

“The Chancellor could not go on paying out billions of pounds indefinitely, and everyone understands that, but there needs to be much more joined up thinking between Government and business.”

So far, some 7.5m employees have been furloughed, at a cost approaching £10bn.

The expected costs to the end of July are likely to be around £50bn, with the extension at a reduced level to the end of October perhaps costing a further £20bn.  These are very significant sums, amounting to around 10% of total Government receipts.

As Britain seeks to get back to work, the pressures on different sectors will be very uneven.

While some sectors, such as construction and financial services, are getting back to work, others such as leisure and hospitality will be much slower to recover.

And the position in the tourism and heritage sectors is likely to become critical if they lose the whole of the Summer season.

Heather Self said: “Enabling part time work is welcome, as it will permit a gradual return to work.  But the Chancellor said this would only be available to businesses “currently using” the scheme – it is not clear what the cut-off date will be for businesses still considering whether they need to furlough employees.

“The Chancellor needs to pay attention to the needs of different sectors, difficult though this may be.  Leisure and hospitality businesses are unlikely to be able to cope with reopening fully by the end of July, and may need to contemplate redundancies.

“Additional support beyond the furlough scheme will be needed for a long time – whether loans such as the CBILS scheme, or grants, or incentives such as an increase in the Employment Allowance to encourage employers to maintain their staff levels, or even take on new employees.”

Small business Bounce Back Loans launch today

  • small businesses will be able to apply for quick and easy-to-access loans from today
  • businesses will be able to borrow between £2,000 and £50,000 with the cash arriving within days
  • loans will be 100% government backed for lenders, and businesses can apply online through a short and simple form

Thousands of small firms and sole traders – including high street staples like hairdressers, coffee shops and florists – will be eligible for 100% government-backed Bounce Back Loans to help them make it through the coronavirus outbreak.

From 9am this morning, small business owners can apply to accredited lenders by filling out a simple online form, with only seven questions.

The government has also agreed with lenders that an affordable flat rate of 2.5% interest will be charged on these loans. And any business that has already taken out a Coronavirus Business Interruption Loan of £50,000 or less can apply to have these switched over to this generous new scheme.

The Bounce Back Loan scheme is the latest step in a package of world-leading support measures launched by Chancellor Rishi Sunak – with £7.5 billion already awarded in business grants, 4 million jobs supported through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms.

The Chancellor of the Exchequer, Rishi Sunak, said: “Small businesses will play a key role creating jobs and securing economic growth as we recover from the Coronavirus pandemic.

“The Bounce Back loan scheme will make sure they get the finance they need – helping them bounce back and protect jobs.”

Business Secretary Alok Sharma (above) said: “We are backing small businesses, which are the backbone of our communities, with the support they need to stay afloat.

“This new scheme of 100% government-guaranteed loans gives owners of even the smallest businesses the confidence and flexibility to borrow a sum which works for them. This will help ensure they can continue to trade, and be a key part of our efforts to reboot the British economy.”

As part of the scheme, small businesses can borrow between £2,000 and £50,000. The government will provide lenders with a 100% guarantee and cover the cost of any fees and interest for the borrower for the first 12 months. No repayments will be due during this period to enable firms to get back on their feet.

The loans are available through a network of lenders, including the five largest banks.

Coronavirus: ‘A Time To Be Bold’

British Chambers of Commerce President, Baroness Ruby McGregor-Smith, has written an open letter to the Prime Minister setting out principles for a phased restart of the UK economy.

The leading business group set out its integrated approach, the first step in a three-stage process,as the government prepares to ease initial lockdown restrictions.

The letter reads: “The fight against the virus must remain the top priority, but the planning and communication of a carefully phased approach to lifting lockdown must begin immediately if we are to harness the public health and economic benefits, both now and in the future.”

Praising the work of Chambers of Commerce across the UK as the “first responders” of the business world, the letter is accompanied by detailed policy proposals for safely reopening the economy, comprising steps to:

  • Safely reopen public spaces and restore services (including schools and public transport)
  • Safely reopen workplaces and commercial spaces
  • Minimise job losses and business failures
  • Rebuild supply chains and customer bases; and
  • Put the UK economy on a high-growth, high-wage and low unemployment trajectory as soon as possible

The letter continues: “This is a time to be bold. Government should not shy away from sustaining high levels of public spending in order to restart and renew our communities and the economy in the short and medium-term, while not tying the hands of future generations.

“An expansionary fiscal policy, including a commitment to transformative infrastructure investment, will be needed in order to generate the returns that will help to pay down the national debt in the longer-term.

“We see the journey ahead as having three phases:

  • Restart: a phased reopening of the economy
  • Rebuild: building resilience for firms and households
  • Renew: returning to prosperity and growth

“We plan to share some principles for each of these three phases over the coming weeks, beginning today with ‘Restart’.

“Fundamental prerequisites to beginning this journey include mass testing and contact tracing; clear decisions and guidance on what PPE is needed in workplaces; and proactive steps to ensure adequate supply of PPE to both the health service and to businesses where necessary.”

The letter welcomes the “speed and scale” of existing government support schemes and indicates that they will need to “continue to evolve to support a phased restart of the economy, enabling businesses to survive through this crisis and thrive in the future.”

The letter concludes: “We commit to working with you and your colleagues across Government on exploring these phases in detail as we plan our path forward. We owe nothing less to our businesses, and the communities and people they support, who have been battered by this storm.”

20-05-01 Letter from British Chambers of Commerce

£100 million funding package to help Scottish business

A £100 million package of additional grant support for small and medium sized businesses (SMEs) and newly self-employed people has opened for applications.

The announcement will see 3,784 Edinburgh businesses receive £49.45 million cash support to help them through the coronavirus crisis.

The three separate funds will be administered by local authorities and Scotland’s enterprise agencies and will begin to pay out grants in early May.

They include a £34 million hardship fund for the newly self-employed, a £20 million fund for small and micro enterprises in the creative, tourism and hospitality sectors and £45 million for viable SMEs crucial to the Scottish economy which are vulnerable.

Economy Secretary Fiona Hyslop said: “Our economy has been hit hard by this crisis and previously profitable businesses have seen demand dry up overnight. Our support will help alleviate the hardship those individuals and companies are facing.

“I am particularly pleased that we will be able to help the newly self-employed who do not qualify for the UK’s scheme and are facing financial hardship as a result of coronavirus (COVID-19).

“We also recognise the particular impact of COVID-19 on our creative, tourism and hospitality sectors at what would normally be their busiest period. This fund is intended to relieve the hardship of smaller firms that are ineligible for other forms of support.

“As well as dealing with this immediate crisis, we must look to the future. We must ensure that viable and vital businesses in all sectors with a part to play in strengthening the resilience of Scotland’s economy survive this crisis and thrive in future, which is why £45 million is being allocated to support those firms.

“We continue to engage with businesses on a regular basis to understand their needs and press the UK Government to deliver for them.”

SNP MSP Gordon MacDonald (above) has welcomed new figures showing that 3,784 businesses in the capital have received Scottish Government grants to support firms through the coronavirus crisis.

A total of £49.45 million has been awarded in Edinburgh through a Scottish Government scheme to support small businesses and the retail, hospitality and leisure sector.

The small business grant is worth over £1 billion to business, and is part of the wider business support package worth £2.3 billion.

In order that funding can be distributed as quickly as possible, eligibility for the grant scheme is linked to the non-domestic rates system.

Edinburgh Pentlands MSP Gordon MacDonald said: “This is a very difficult time for businesses.

“This Scottish Government funding is designed to support firms and ensure that our economy is on the best possible footing when we get through this health crisis.

“Our support for business is now worth £2.3 billion. This is more than the Scottish Government has received from the UK Government and actively works to fill the gaps in the UK schemes with tailored support for the Scottish economy.

“I encourage all businesses across Edinburgh to ensure they are receiving the support they’re entitled to.”

Applicants can access these funds and more via the www.FindBusinessSupport.gov.scot website. 

First Minister: Please, please stick to restrictions

Statement given by the First Minister Nicola Sturgeon at a media briefing in St Andrew’s House, Edinburgh, on Thursday, 30 April:

Good afternoon. Thanks for joining us for today’s briefing.

I want to start – as I always do – by updating you on some of the key statistics in relation to the spread of the virus in Scotland.

As of 9 o’clock this morning, there have now been 11,353 positive cases confirmed – that is an increase of 319 since yesterday.

A total of 1748 patients are currently in hospital with either confirmed or suspected cases of COVID-19 – that is an increase of 21 from yesterday.

A total of 109 people last night were in intensive care, again with either confirmed or suspected cases. That is a further decrease of 5 since yesterday.

I am also able to confirm today that since 5 March, a total of 2,538 patients who had tested positive for the virus and been admitted to hospital as a result, have now been able to leave hospital.

However, on a sadder note, I also have to report that in the last 24 hours, 60 deaths have been registered of patients who have been confirmed through a test as having the virus – that takes the total number of deaths in Scotland, under that measurement, to 1,475.

These numbers, as I stress every single day, are not just statistics. They represent people who are right now deeply missed by the friends, families and their wider network of loved ones. So once again, I want to send my deepest sympathies and condolences to everyone who has lost a loved one to this virus, we are all thinking of you at this time.

I also want to thank – as I always do – our health and care workers. At 8 o’clock this evening I will join with many others in applauding our health and care workers, in what I think has become a very precious and very special moment in the week.

And to health and care workers, I hope that this shows you, albeit in a symbolic way, just how grateful everybody across the country is for the extraordinary and very courageous work that all of you are doing.

There are two things I want to talk about today. First of all, I want to take the opportunity to emphasise the vital importance of sticking with the lockdown restrictions at this time.

I set out last week our decision making framework for starting – slowly and gradually – to ease aspects of the lockdown when it is safe to do so, and the factors and uncertainties we will have to take into account as we make these difficult decisions.

I promised to be open with you as our thinking and our decision making develops and I absolutely will be. I intend to update you again next week – ahead of the official review date of 7 May – on our considerations and judgements so far. I am very grateful to all of you have taken the time to send us views on the paper that we published a week ago today.

But part of the grown-up conversation I want to have involves me being willing, when necessary, to deliver tough messages as well as hopefully the more positive messages about how, when it is safe to do so, we can start the journey to what I described last week as a ‘new normal’, and start to reduce some of the harms to the economy and our well-being that we know the lockdown restrictions are having.

Right now, that means I have to be straight with you that it may very well be too early, even this time next week, in any meaningful way, to safely lift any of the current restrictions.

I want to share with you the reasons for that.

We have worked very hard as a country to bring down the transmission rate of this virus – and we are definitely seeing results from those efforts.

In fact we see that fewer people are now in intensive care than two weeks ago, and that figure appears to be reducing now on an ongoing basis, and hospital admissions, although they are fluctuating as you see today, are also on a slowly reducing curve.

Overall, we think that transmission in the community of the virus has been reduced very significantly as a result of the lockdown – although of course we know that it remains higher in settings such as care homes.

The R number which you hear us talk about – the rate at which the virus reproduces – is, we believe, now below 1. Remember, that at the start of lockdown, we think it was above 3. So that is real and very positive progress.

And that progress matters. With the R number below 1, that means every 100 people with the virus, between them pass it on to fewer than 100 more people and so on – and so the total number of cases will gradually decline.

We do think that is happening now. However we are not confident that the R number is very far below 1. That means any easing up at all in the current restrictions – either formally by government decisions, or informally by people becoming a bit less compliant as we all get more and more weary and frustrated – would quickly send it back above 1. Indeed, there have been reports in the last day or so from Germany that their R number is rising again as a slight easing up there has been taking effect.

And if the R number does go back above 1 – let’s say it goes to even 1.5 – then our 100 people from a moment ago would between them transmit the virus to 150 people, they in turn pass it on to 220 people and so on and so on, and suddenly the virus is spreading exponentially again.

That would mean more people in hospital and in intensive care and even more people dying.

So the point I am making today is not an easy one, but it is an essential one. The progress we have made is real and it is significant, but it is still very fragile. The margins we have for ensuring the virus does not take off again are really, really tight. That means we must be very cautious at this stage.

That’s why it’s so important that everyone sticks with the restrictions. In recent weeks people have been absolutely superb at doing that – and I will never be able to tell you how grateful I am to all of you for that. You are the reason that the NHS has not been overwhelmed, as I really feared a few weeks ago that it might be, and by sticking to the guidance,  you have undoubtedly saved lives.

However we are now seeing slight increases in people using our roads. In addition, more people are using concessionary bus travel than a few weeks ago. Both of these trends are from low starting points, but they are still sources of some concern.

For example the number of people who are using concessionary transport increased by almost 1/6 last week.

The car traffic we’ve observed on major roads is less than 1/3 of its pre-lockdown levels, but it has increased this week by about 5% this week, compared to last week. On some town and city roads, traffic has been 10% higher than in the week before.

So what I am asking all of you to do today, and you know the reasons that I am asking you to do this, is think about whether or not it is the case that right now you are a little bit more active than you might have been at the start of the lockdown, and to ask yourself why that is the case.

Was your journey really essential? You might think it’s only you making an extra journey, and that it’s only one trip – and you might well feel you deserve it after weeks of restraint. Believe me, I really understand all of that. But all of it adds up – and the fact remains that if everyone eases off, the virus will quickly take off again and it will have devastating consequences for all of us.

I know this is a long haul – I know that people want to travel a bit more, I know that children want to spend more time outside. I absolutely know that every grandparent is desperate to see and to hug their grandchildren. But as things stand, our progress against the virus, albeit very real progress, is too fragile for us to let up.

But the more we do stick to the lockdown, the more we will reduce the R number below 1, and the lower it goes, the more scope we will have to ease the lockdown measures in future.

So please, I am asking you again, stay at home – except for essential purposes.

If you do leave home, remember to stay more than 2 metres away from other people, and don’t meet up with people from other households.

If you have any symptoms of the virus, you and your household should isolate completely. And everybody should still be washing their hands regularly and thoroughly.

By sticking to all of that, we can keep that R number below 1. We will slow the spread of the virus, protect the NHS, and we will save lives. And – while it might not feel like it right now, and I am pretty sure it doesn’t – we will actually all help each other to come through the other side of this a bit more quickly.

The other thing that I want to update you on, is our support for business.

Today, three new business support funds, which total £100 million, open for applications.

They are part of a wider package of measures to support business, which are worth around £2.3 billion in total.

One of the funds is the Newly Self-Employed Hardship Fund, which is managed by Local Authorities.

It is open to newly self-employed people who are facing hardship but – because they became self-employed in the last year – are ineligible for other support. They will be able to apply for grants of £2,000.

The lack of support for newly self-employed people is something which has been much commented upon – I am glad we can now do something now to give assistance.

The second fund is the Creative, Tourism & Hospitality Enterprises Hardship Fund. This is managed by our Enterprise Agencies with support from Creative Scotland and VisitScotland.

It will provide grants of up to £25,000 for smaller creative, tourism and hospitality companies who do not benefit from business rates relief – for example if they do not have premises which can benefit.

And finally, we have also established the Pivotal Enterprise Resilience Fund, which is again managed by our Enterprise Agencies.

This will provide grants and support to small and medium sized businesses which we think are potentially vital to Scotland’s economic future, or to the economies of certain local areas – but which have been made vulnerable by this crisis.

This is an important way of trying to safeguard our economic future and potential – by ensuring that smaller companies with lots of potential are not driven out of business during this crisis.

Applications for these funds will be open from 2 pm today. We hope that successful applicants will start receiving money in the next couple of weeks.

If you think that you might qualify for one of these grants, you can find more detail at www.FindBusinessSupport.gov.scot

I want to end by re-iterating my earlier message. Please stick to the guidance. I know this is not easy. And when I say that, I am not just saying what I know you want to hear – I really know this is not easy. But it is making the difference: so please, please, stick with it.

MAY DAY: Half of the world’s workers could see their livelihoods destroyed

“For millions of workers, no income means no food, no security and no future. Millions of businesses around the world are barely breathing. They have no savings or access to credit.”

The continued sharp decline in working hours globally due to the COVID-19 outbreak  means that 1.6 billion workers in the informal economy – that is nearly half of the global workforce – stand in immediate danger of having their livelihoods destroyed, warns the International Labour Organization.

According to the ILO Monitor third edition: COVID-19 and the world of work , the drop in working hours in the current (second) quarter of 2020 is expected to be significantly worse than previously estimated.

Compared to pre-crisis levels (Q4 2019), a 10.5 per cent deterioration is now expected, equivalent to 305 million full-time jobs (assuming a 48-hour working week). The previous estimate was for a 6.7 per cent drop, equivalent to 195 million full-time workers. This is due to the prolongation and extension of lockdown measures.

Regionally, the situation has worsened for all major regional groups. Estimates suggest a 12.4 per cent loss of working hours in Q2 for the Americas (compared to pre-crisis levels) and 11.8 per cent for Europe and Central Asia. The estimates for the rest of the regional groups follow closely and are all above 9.5 per cent.

Informal economy impact

As a result of the economic crisis created by the pandemic, almost 1.6 billion informal economy workers (representing the most vulnerable in the labour market), out of a worldwide total of two billion and a global workforce of 3.3 billion, have suffered massive damage to their capacity to earn a living. This is due to lockdown measures and/or because they work in the hardest-hit sectors.

The first month of the crisis is estimated to have resulted in a drop of 60 per cent in the income of informal workers globally. This translates into a drop of 81 per cent in Africa and the Americas, 21.6 per cent in Asia and the Pacific, and 70 per cent in Europe and Central Asia.

Without alternative income sources, these workers and their families will have no means to survive.

Enterprises at risk

The proportion of workers living in countries under recommended or required workplace closures has decreased from 81 to 68 per cent over the last two weeks. The decline from the previous estimate of 81 per cent in the second edition of the monitor  (published April 7) is primarily a result of changes in China; elsewhere workplace closure measures have increased.

Worldwide, more than 436 million enterprises face high risks of serious disruption. These enterprises are operating in the hardest-hit economic sectors, including some 232 million in wholesale and retail, 111 million in manufacturing, 51 million in accommodation and food services, and 42 million in real estate and other business activities.

Urgent policy measures needed

The ILO calls for urgent, targeted and flexible measures to support workers and businesses, particularly smaller enterprises, those in the informal economy and others who are vulnerable.

“For millions of workers, no income means no food, no security and no future. […] As the pandemic and the jobs crisis evolve, the need to protect the most vulnerable becomes even more urgent.”

Guy Ryder, ILO Director-General

Measures for economic reactivation should follow a job-rich approach, backed by stronger employment policies and institutions, better-resourced and comprehensive social protection systems. International co-ordination on stimulus packages and debt relief measures will also be critical to making recovery effective and sustainable. International labour standards, which already enjoy tripartite consensus, can provide a framework.

“As the pandemic and the jobs crisis evolve, the need to protect the most vulnerable becomes even more urgent,” said ILO Director-General Guy Ryder.

“For millions of workers, no income means no food, no security and no future. Millions of businesses around the world are barely breathing. They have no savings or access to credit.

“These are the real faces of the world of work. If we don’t help them now, these enterprises will simply perish.”

Coronavirus could see Scotland’s economy shrink by a third

The economic impact of the efforts to tackle the coronavirus (COVID-19) pandemic could see Gross Domestic Product (GDP) fall by around a third, according to a report by the Chief Economist.

The latest State of the Economy report, published by the Scottish Government’s Chief Economist Gary Gillespie, presents analysis showing that GDP in Scotland could fall by around 33% during the current period of social distancing, similar to estimates from UK and international bodies such as the Office for Budget Responsibility (OBR) and the Organisation for Economic Co-operation and Development (OECD).

Alongside a summary of latest economic developments, the report includes Scottish Government analysis of:

• channels through which COVID-19 is impacting Scotland’s economy;
• short term impact of social distancing on GDP and the labour market;
• exposure of different sectors to COVID-19 risks;
• medium term path of the economic recovery.

Economy Secretary Fiona Hyslop said: “Our response to COVID-19 is saving lives, but I am deeply aware that the pandemic is having an economic effect that is already being felt across Scotland.

“The Scottish Government is doing everything we can to support businesses at this very difficult time.

“We want Scotland to recover as quickly as possible from this outbreak, and that includes rebuilding our economy as quickly as is safely possible.

“None of us should be under any illusions about the scale of economic recovery and, as we have said before, no government will have all of those answers.

“That is why we have set up an independent advisory group to provide expert economic advice and this will be crucial to help us deal with the challenge of rebuilding our economy.”

state-economy

 

Chancellor delivers Tuesday’s UK Government update

Good evening from Downing Street, where I’m joined by Steve Powis, Medical Director of the NHS and Yvonne Doyle, Medical Director at Public Health England.

Earlier today, the government’s independent fiscal watchdog, the Office for Budget Responsibility, the OBR, published a report into the impact of coronavirus on the economy and public finances.

It’s important to be clear that the OBR’s numbers are not a forecast or prediction.

They simply set out what one possible scenario might look like – and it may not even be the most likely scenario.

But it’s important we are honest with people about what might be happening to our economy.

So before I turn to the health figures, I want to spend a few minutes explaining what the OBR have said – and let me thank them for their continued work.

There are three brief points I want to make.

First, the OBR’s figures suggest the scale of what we are facing will have serious implications for our economy here at home, in common with other countries around the world.

These are tough times – and there will be more to come.

As I’ve said before, we can’t protect every business and every household.

But we came into this crisis with a fundamentally sound economy, powered by the hard work and ingenuity of the British people and British business.

So while those economic impacts are significant – the OBR also expect them to be temporary…

…with a bounce back in growth.

The second point I want to make is that we’re not just going to stand by and watch this happen.

Our planned economic response is protecting millions of jobs, businesses, self-employed people, charities and households.

Our response aims to directly support people and businesses while the restrictions are in place…

…and to make sure as restrictions are changed, we can, as quickly as possible, get people back to work; get businesses moving again; and recover our economy.

The OBR today have been clear that the policies we have set out will do that.

The OBR today have been clear that if we had not taken the actions we have, the situation would be much worse.

In other words, our plan is the right plan.

The third point I want to make is this: right now, the single most important thing we can do for the health of our economy is to protect the health of our people.

It’s not a case of choosing between the economy and public health – common sense tells us that doing so would be self-defeating.

At a time when we are seeing hundreds of people dying every day from this terrible disease, the absolute priority must be to focus all of our resources…

…not just of the state, but of businesses, and of all of you at home as well, in a collective national effort to beat this virus.

The government’s approach is to follow scientific and medical advice through our step-by-step action plan, aiming to slow the spread of the virus, so fewer people need hospital treatment at any one time, protecting the NHS’s ability to cope.

I said in my Budget a month ago that whatever the NHS needs, it will get – and we have honoured that promise:

Yesterday we published an update showing that we’ve given our public services an extra £14.5 billion in recent weeks.

We are taking action to increase NHS capacity, with more beds, more key staff and more equipment on the front-line.

And the Secretary of State for Health and Social Care will be updating on our plans for social care tomorrow.

This is why we are instructing people to stay at home, so that we can protect our NHS and save lives.

I can report that through the government’s ongoing monitoring and testing programme, as of today:

  • 302,599 people in the UK have now been tested for coronavirus, with 93,873 people testing positive
  • 19,706 people in the UK have been admitted to hospital with the virus, down from 20,184 people yesterday;
  • Sadly, of those in hospital, 12,107 people have now died – an increase of 778 fatalities since yesterday.

Our thoughts are with the families and friends of all those who have lost their lives.

These figures are a powerful reminder to us all of the importance of following the government’s guidance:

Stay at home. Protect our NHS. And save lives.

Help for the self-employed … but not until June

Chancellor Rishi Sunak made his long-awaited statement on support for the UK’s five million self-employed workers yesterday. That support will not kick in until June at the earliest, however, and does not cover those workers who have been self-employed for less than three years.

This is what he said:

Good afternoon.

Today I can announce the next step in the economic fight against the Coronavirus pandemic, with new support for the self-employed.

Our step-by-step action plan is aiming to slow the spread of Coronavirus so fewer people need hospital treatment at any one time, protecting the NHS’s ability to cope.

At every point, we have followed expert advice to be controlled in our actions – taking the right measures at the right times.

We are taking unprecedented action to increase NHS capacity by increasing the numbers of beds, key staff and life-saving equipment on the front-line to give people the care they need.

That is why it is absolutely critical that people follow our instructions to stay at home, so we can protect our NHS and save lives.

Our action plan to beat the pandemic is the right thing to do – but we know people are worrying about their jobs and their incomes.

Working closely with businesses and trade unions, we have put together a coherent, coordinated and comprehensive economic plan – a plan which is already starting to make a difference:

  • big employers like Brewdog, Timpsons and Pret have already said that our Coronavirus Jobs Retention Scheme means they can furlough thousands of staff, rather than laying them off. And we are publishing this evening detailed guidance on how the scheme will operate so that other businesses can take advantage, too
  • small businesses are already benefiting from Coronavirus Business Interruption Loans of up to £5 million, which are interest free for 12 months – with 30,000 enquiries in just four days
  • local authorities are already informing more than 700,000 retail, hospitality and leisure businesses that they will pay no business rates this year
  • and the new hardship grants scheme, providing cash grants of up to £25,000 for the smallest businesses, is now up and running

So if any business is struggling, and worrying they may need to lose staff, I would urge you to log on to businesssupport.gov.uk, and look very carefully at what support is available before deciding to lay people off.

I’m proud of what we’ve done so far, but I know that many self-employed people are deeply anxious about the support available for them.

Musicians and sound engineers; plumbers and electricians; taxi drivers and driving instructors; hairdressers and childminders and many others, through no fault of their own, risk losing their livelihoods.

To you, I say this: You have not been forgotten. We will not let you behind. We are all in this together.

So, to support those who work for themselves, today I am announcing a new Self-Employed Income Support Scheme.

The government will pay self-employed people, who have been adversely affected by the Coronavirus, a taxable grant worth 80% of their average monthly profits over the last three years, up to £2,500 a month.

This scheme will be open for at least three months – and I will extend it for longer if necessary.

You’ll be able to claim these grants and continue to do business.

And we’re covering the same amount of income for a self-employed person as we are for furloughed employees, who also receive a grant worth 80%.

That’s unlike almost any other country and makes our scheme one of the most generous in the world.

Providing such unprecedented support for self-employed people has been difficult to do in practice.

And the self-employed are a diverse population, with some people earning significant profits.

So I’ve taken steps to make this scheme deliverable, and fair:

  • to make sure that the scheme provides targeted support for those most in need, it will be open to anyone with income up to £50,000.
  • to make sure only the genuinely self-employed benefit, it will be available to people who make the majority of their income from self-employment
  • and to minimise fraud, only those who are already in self-employment, who have a tax return for 2019, will be able to apply

95% of people who are majority self-employed will benefit from this scheme.

HMRC are working on this urgently and expect people to be able to access the scheme no later than the beginning of June.

If you’re eligible, HMRC will contact you directly, ask you to fill out a simple online form, then pay the grant straight into your bank account.

And to make sure no one who needs it misses out on support, we have decided to allow anyone who missed the filing deadline in January, four weeks from today to submit their tax return.

But I know many self-employed people are struggling right now, so we’ve made sure that support is available.

Self-employed people can access the business interruption loans.

Self-assessment income tax payments, that were due in July, can be deferred to the end of January next year.

And we’ve also changed the welfare system so that self-employed people can now access Universal Credit in full.

A self-employed person with a non-working partner and two children, living in the social rented sector, can receive welfare support of up to £1,800 per month.

The scheme I have announced today is fair.

It is targeted at those who need it the most.

Crucially, it is deliverable.

And it provides an unprecedented level of support for self-employed people.

As we’ve developed the scheme, I’m grateful for the conversations I’ve had with the Federation of Small Businesses, the association of Independent Professionals and the Self-Employed, and a range of trade unions, including the Trades Union Congress.

But I must be honest and point out that in devising this scheme – in response to many calls for support – it is now much harder to justify the inconsistent contributions between people of different employment statuses.

If we all want to benefit equally from state support, we must all pay in equally in future.

These last ten days have shaken our country and economy as never before.

In the last two weeks we have put aside ideology and orthodoxy to mobilise the full power and resources of the British state.

We have done so in pursuit of a single goal: to protect people’s health and economic security, by supporting public services like our NHS, backing business, and protecting people’s jobs and incomes.

What we have done will, I believe, stand as one of the most significant economic interventions at any point in the history of the British state, and by any government, anywhere in the world. We have:

  • pledged that whatever resources the NHS needs, it will get
  • promised to pay 80% of the wages of furloughed workers for three months up to £2,500
  • deferred more than £30 billion of tax payments until the end of the year
  • agreed nearly 17,000 Time to Pay arrangements for businesses and individuals
  • made available £330 billion of loans and guarantees
  • introduced cash grants of up to £25,000 for small business properties
  • covered the cost of statutory sick pay for small businesses for up to two weeks
  • lifted the incomes of over four million households with a nearly £7 billion boost to the welfare system
  • agreed three-month mortgage holidays with lenders and nearly £1 billion more support for renters through the Local Housing Allowance
  • and today we’ve announced one of the most generous self-employed support schemes in the world

Despite these extraordinary steps, there will be challenging times ahead. We will not be able to protect every single job or save every single business.

But I am confident that the measures we have put in place will support millions of people, businesses and self-employed people to get through this, get through it together, and emerge on the other side both stronger and more united.

Thank you.

The Federation of Small Businesses (FSB) – who spearheaded calls for additional help for those that work for themselves – warmly welcomed the proposals.

Andrew McRae, FSB’s Scotland policy chair, said: “Thousands of people who work for themselves in Scotland will now breathe a sigh of relief. This scheme will provide lifeline cash to self-employed people, with help targeted at those on low and moderate incomes.

“We need to vanquish the myth that those that work for themselves are universally wealthy. People like the local handyman, cleaner and fitness coach will benefit from this support.

“Like many of these government interventions, it will take a number of weeks for this programme to deliver. Therefore, those who qualify should try their banks for interim finance if required, while doing what they can to manage their outgoings. This will be much easier said than done, but with help on its way many of the self-employed will rest a little easier.”

Official figures show that there are 320,000+ self-employed people in Scotland.

Andrew McRae said: “Throughout this crisis, we’ve found Ministers in Edinburgh and London sympathetic and approachable. These governments deserve credit for delivering support to business who face difficult circumstances that are neither under their control nor their fault.”

TUC General Secretary Frances O’Grady said: “With so many of the self-employed facing a collapse in their earnings the Chancellor is right to act.

“This is a welcome step forward for self-employed and freelance workers across the economy, from construction to the creative industries.

“It’s vital that support reaches workers as soon as possible. Many are already dealing with severe hardship.

“Unions look forward to being consulted on how this scheme is rolled out.”

£1 billion Business Support Fund opens

Grants to help businesses with COVID-19 impact

Businesses can now apply for grants to help them deal with the impact of the coronavirus (COVID-19) outbreak.

The one-off grants are designed to help protect jobs, prevent business closures and promote economic recovery, and more than 90,000 ratepayers across Scotland will be able to benefit.

The grant support is additional to separate tax relief measures and is part of a package of measures worth £2.2 billion.

Small businesses in receipt of the small business bonus scheme or rural relief, as well as hospitality, leisure and retail business can benefit.

Two types of grant are now available to ratepayers:

• a one-off £10,000 grant to ratepayers of small businesses

• a one-off grant of £25,000 available to retail, hospitality and leisure business ratepayers with a rateable value between £18,001 and £50,999

The list is not exhaustive and if businesses think they may be eligible for one of these grants, they should contact their local authority, which are administering the scheme on behalf of the Scottish Government.

Cabinet Secretary for Finance Kate Forbes said: “While our primary concern is for people’s health, it is clear that the Coronavirus (Covid-19) outbreak will have severe economic consequences, and we are treating it as an economic emergency.

“We are determined to help keep companies in business and support them and their staff during this difficult time.

“Local authorities are the most efficient way to deliver this and we have worked closely with them to deliver these measures – and eligible businesses can apply now.

“Local authorities will aim to make payments within 10 working days, and I’d like to thank them for their help in ensuring this support is delivered as quickly as possible.

“The COVID-19 situation, however, is both severe and fast-moving and requires a coordinated UK response: I will continue to work closely with the UK Government and the other devolved administrations.”

More information on how to apply can be found at:
https://www.mygov.scot/non-domestic-rates-coronavirus/