Throughout this pandemic, our priority has been clear: protecting lives and livelihoods. We stood behind businesses and workers as we came into this crisis. And we stand behind them as we come through the other side.
The Prime Minister has announced new national restrictions that will prevent further spread of the virus. Nobody wants to impose measures unless absolutely essential, but these measures will help bring the R rate down, to enable us to defeat the virus.
We know how worried people are – about their health, the health of their loved ones, their jobs, their businesses, and their financial security.
So today, the Government is announcing that it will:
- Extend the Coronavirus Job Retention Scheme further, extending furlough until the end of March;
- Not pay the Job Retention Bonus in February but instead redeploy a retention incentive at the right time;
- Increase the next self-employed grant from 55% to 80% of trading profits; and
- Increase the upfront guarantee of funding for the devolved administrations from £14bn to£16bn, on top of their Spring Budget 2020 funding.
These bold measures will keep our economy strong as we tackle the virus.
Extending the Coronavirus Job Retention Scheme
We recently announced the extension of the Coronavirus Job Retention Scheme from 1 November until 2 December. As we saw from the first lockdown, the economic effects are much longer lasting for businesses and areas than the duration of any restrictions.
Today, we are extending the Coronavirus Job Retention Scheme until the end of March for all parts of the UK. We will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
Eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time.
Further details on how to claim are available on gov.uk and full guidance will be published on Tuesday 10 November.
Extra Support for the Self Employed
We recently announced an extension of the Self-Employment Income Support Scheme to support self-employed individuals who are experiencing reduced demand or cannot trade due to the effect of coronavirus. We then doubled the support from 40% to 80% of trading profits for November, which increased the overall level of the grant to 55% of trading profits.
Today, the Government is announcing that we are increasing the overall level of the grant to 80% of trading profits covering November to January for all parts of the UK. This provides equivalent support to the self-employed as we are providing to employees through the government contribution in the CJRS. It is calculated based on 80% of 3 months’ average trading profits, paid out in a single instalment and capped at £7,500.
This is £7.3 billion of support to the self-employed through November to January alone, with a further grant to follow covering February to April. This comes on top of £13.7 billion of support for self-employed people so far, one of the most comprehensive and generous support packages for the self-employed anywhere in the world.
And HMRC will pay this more generous grant sooner than planned and in good time for Christmas.
Financial support for Local English Businesses
Businesses in England that are forced to close due to national or local restrictions will receive up to £3,000 per month. This is worth over £1 billion a month with the new restrictions in place, and will benefit over 600,000 business premises.
That means 90% of small and medium sized business premises in the closed Retail, Hospitality and Leisure sectors should broadly have their monthly rent covered by these grants.
Businesses in the hospitality, leisure and accommodation sectors that suffered from reduced demand due to local restrictions introduced between 1 August and 5 November will receive backdated grants at 70% of the value of closed grants up to a maximum of £2,100 per month for this period.
And Local Authorities in England will receive one off funding of £1.1 billion to support businesses more broadly over the coming months as a key part of local economies. They can use this money at their discretion, and will be distributed to councils depending on population count.
Extending the Guarantee Loan Schemes
We have announced that we plan to extend the application deadline for loan schemes – that is, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, Future Fund, and Coronavirus Large Business Interruption Loan Scheme – to the end of January 2021. This will give businesses two extra months to make loan applications.
We will also adjust the Bounce Back Loan Scheme rules to allow those businesses who have borrowed less than their maximum to top up their existing loan. Businesses will be able to take-up this option from next week; they can make use of this option once.
We understand that some businesses didn’t anticipate the disruption to their business from the pandemic would go on for this long; this will ensure that they are able to benefit from the loan scheme as intended.
Our Plan is Supported by Industry Leaders and Experts
Our plan to support jobs and businesses throughout the winter months has already received glowing support from many industry leaders and experts.
Kristalina Georgieva, IMF Director, said of the plans: “The unprecedented package of fiscal, monetary, and financial sector support measures has helped to sustain incomes, keep unemployment down, and curb corporate insolvencies.
“It is one of the best examples of coordinated action that we have seen globally. We welcome the continuing efforts the government has made to refine its support measures.”
And Mike Cherry, Chairman for the Federation of Small Businesses, has said: ‘This is very welcome action. When the economic toll of coronavirus took effect the Government was right to initiate a hugely ambitious access to finance package for small firms, and it is right to extend that today.
More than a million business owners have now been helped through an incredibly challenging period by bounce back or interruption loans and the Future Fund.”
The Office for Budget Responsibility (OBR) have also said of our plans: “the outlook would have been much worse without the measures the Government has taken. These [measures] have provided additional financial support to individuals and businesses through the lockdown. They should also help to limit any long-term economic ‘scarring’, by keeping workers attached to firms and helping otherwise viable firms stay in business”.
And Kate Nichols, Chief Executive of UK Hospitality, said: “Things were looking grim for our sector yesterday and we were desperately hoping for some good news. The Chancellor has given us some reason to be positive again, and we look forward to engaging on specific measures to keep people in work and support our sector.”
We’re Building on Existing Support for our Economy
This comes on top of the extensive support already announced:
- Cash grants of up to £3,000 per month for businesses which are closed in England
- £1.1 billion for councils in England to further support businesses more broadly over the coming months
- Extension of existing loan schemes to the end of January and an ability to top-up Bounce Back Loans
- An extension to the mortgage payment holiday for homeowners
- Providing councils in England with up to £500 million of funding to support the local healthcare response
- Over £200 billion on VAT relief, business rate relief, loans, tax deferrals, and support for individuals
As the virus continues to effect the economy, it is crucial we continue to take bold action to protect jobs and businesses. By extending furlough, providing loans for businesses, supporting the self-employed, and more, we will ensure that we protect as many hard working people’s livelihoods as we possibly can.