On March 20th 2020 in an unprecedented move the UK Chancellor, Rishi Sunak, announced an additional emergency package to stop the UK economy from collapsing. At last, we are heading in the right direction from whats has been a moribund UK Government. The plan will protect jobs, strengthen the safety net for people in financial distress and it is a huge intervention but it will not stop a recession and it leaves the self-employed in dire straights.
That day may well go down in history as the day capitalism died, we are going to need a completely new economic approach.
- UK Government has had to promise to pay the wages of private businesses that are in trouble as a result of the Coronavirus
- Any employer will be eligible to ask HMRC to pay most of the wages for those not working but stood down by companies
- This amounts up to 80% of the salaries up to £2,500 a month. This may require the members of staff to be actually stood down and not even working from home – we don’t know yet.
- This is backdated to wages paid as far back as March 1st
- Self-employed people can now claim Universal Credit at the same rate as statutory sick pay (SSP) £98.00 per week (SSP should have been increased)
- Self-employed/sole trader self-assessment payments will be delayed by a year. Note – this is not enough, see below.
- All pubs and nightclubs are ordered to close (although restaurants can still do takeaway)
- The business interruption loan scheme will be available from Monday onwards and they will be interest-free for 12 months.
- Next VAT bills will be deferred for almost a year – we hope they are going to process VAT rebate claims though as companies who have just invested in new plant and equipment may be claiming VAT back not paying it.
- Universal credit is increasing by £1,000
- Housing Benefit will also rise significantly for renters
Note: There are 5 million self-employed people in the UK and many have gone from earning good money to having to claim £98.00 per week. This means that the package will still fail to stop several million people entering poverty and struggling with household costs etc.
Note that initially it was announced that shops were to close and so we reported that as non-food shops but the UK Government is now suggesting that was announced in error and shop can remain open – it’s just that restaurants and bars and leisure centres etc are to close.
The UK Government has been behind the curve on the coronavirus pandemic in both health and economic terms. The level of mismanagement has been epic with the UK Government somehow believing that that lesser measures than other nations have taken would somehow stop the virus in its tracks. Earlier this week we pointed out that the £350 billion rescue package was not enough and that loans would not do the job for small and medium-sized businesses.
We also pointed out that unlike during the banking crash, this time the only option is to bail out the people. If you support the people the economy supports itself.
Good summary and- that final sentence is the key – oh but governments and organisations would recognise it. Support people!
Never thought I see a Tory government do this..perhaps the ‘hand of the markets’ isnt all powerful after all…