Budget 2020: £30bn package to help those affected by coronavirus
In his first Budget just a month after taking on the role of chancellor, Rishi Sunak jumped straight to the issue on everyone’s mind – coronavirus.
He said: “I know how worried people are. Worried about their health, the health of their loved ones, their jobs, their income, their businesses, their financial security.
“So, the right immediate policy response is to provide security and support for those who get sick or can’t work through funding our public services, and a strengthened safety net.
“And on the supply side, the right response is to provide a bridge for businesses, to ensure that what is a temporary impact on our productive capacity does not become permanent.
“In other words, our response will be temporary, timely and targeted.”
Total spend to combat coronavirus comes in at £30bn in 2020/21 – equivalent to approximately 1.3% of GDP.
Here are the main points to note:
Statutory Sick Pay (£94.25/week) will be available to those who are diagnosed with Covid-19 or those unable to work because they’re self-isolating even if they’re not showing symptoms. This is on top of the announcement last week that employees will receive sick pay from the first day they are off work, rather than the fourth.
The self-employed or people earning below the lower earnings limit for statutory sick pay of £118 who are otherwise not eligible for the SSP, will be able to make a claim for Universal Credit or contributory Employment and Support Allowance (£73.10/week if they’re over 25). Further they will be eligible from day one, rather than day eight of sickness or self-isolating.
Those claiming Universal Credit will be able to access payments upfront and without having to attend a jobcentre if they’re advised to self-isolate.
A £500m Hardship Fund will be distributed to local authorities to support economically vulnerable people and households such as through council tax relief.
To ease the burden for businesses, firms with fewer than 250 employees will receive a refund of the cost of providing statutory sick pay for up to two weeks, which will provide over £2bn for up to two million businesses.
Businesses and the self-employed will also be able to defer tax payments over an agreed period of time. Sunak announced HMRC will scale up its Time to Pay service as some will face problems with cash flow as a result of the virus.
A temporary coronavirus Business Interruption Loan Scheme will be launched, offering up to £1.2m to support small and medium sized businesses. It will guarantee loans, covering up to 80% of losses, with no fees so banks can “lend with confidence”, Sunak said.
Further, other businesses such as shops, cinemas, restaurants and music venues (with a rateable value of less than £51,000) which may struggle as coronavirus grips the nation, will see business rates abolished over the next financial year. This will also apply to tens of thousands of businesses in the leisure and hospitality sectors such as galleries, theatres and gyms. This rate cut is worth over £1bn.
The 700,000 smallest businesses will also be eligible for a £3,000 cash grant.