I do understand how worried people are about their health, the health of their loved ones, their jobs, their businesses, and their financial security. So I am pleased that the Chancellor has announced a new set of measures to protect jobs as we go into a month long national lockdown during November. Alongside the £200 billion package of support committed since March the Chancellor is introducing further measures to give businesses the support and flexibility they need to adjust and plan over the coming months.
- An extension to the Coronavirus Job Retention Scheme that will cover 80% of the wages of furloughed staff until 2 December
- A doubling of support to the self-employed through the SEISS grants and paying that support more quickly
- Cash grants of up to £3,000 per month for businesses which are required to close
- £1.1 billion for councils to further support businesses more broadly over the coming months
- Plans to extend existing Bounce Back and CBILS loan schemes and Future Fund 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 with up to £500m of funding to support the local healthcare response
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme (CJRS) will be extended until 2 December 2020. The scheme will operate on the same terms as the previous scheme and mirror the levels of support available under the scheme in August. This means that the government will pay 80 per cent of wages up to a cap of £2,500 for hours not worked. Employers will not have to make any contribution to their employees’ wages for the hours not worked. They will only be asked to cover National Insurance and Employer pension contributions, which for the average claim accounts for just 5 per cent of total employment costs (or £70 per employee per month). Claims can be made from next week and as previously, paid within 6 working days.
Who is eligible?
The extended scheme will be open to new entrants, specifically, employees must have been employed and on an employer’s PAYE payroll on or before 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30 October 2020. Neither the employer nor the employee needs to have previously used the CJRS to make a claim. Employees employed as of 23 September (day of the Job Support Scheme announcement) and notified to HMRC by RTI on or before that date, who have since been made redundant can be rehired and placed on the Scheme.
Support for the self-employed
The Government is also announcing that it will provide more generous support to the self-employed and will pay that support more quickly. It is increasing the support to the self-employed from 40 per cent of trading profits to 80 per cent for November. As SEISS grants are calculated over 3 months, this increases the total level of the grant from 40 per cent to 55 per cent of trading profits for November to January and the maximum grant will increase to £5,160.
This provides broadly equivalent support to the self-employed as it is providing to employees through the government contribution in the Coronavirus Job Retention Scheme in November and then the Job Support Scheme in the two subsequent months. HMRC will pay this more generous grant sooner than planned and in good time for Christmas. The window for claiming a grant will open on 30 November, two weeks earlier than previously announced.
The loan schemes will be extended. The Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, Coronavirus Large Business Interruption Loan Scheme and the Future Fund will be extended to the end of January. Ministers will also adjust the Bounce Back Loan Scheme rules to allow those businesses who have taken out less than their maximum (i.e. less than 25 per cent of their turnover) to top-up their existing loan giving businesses greater flexibility and support. businesses will be able to take up this option from next week and they can make use of this option once. This is something I have campaigned strongly for an I am also pressing for a similar top up provision for CBILS loans and for funding to be made available to Non-Bank Lenders so that their customers can also access these loans.
Mortgage payment holidays
Mortgage payment holidays will continue to be available for homeowners. Borrowers who have been impacted by coronavirus and have not yet had a mortgage payment holiday will be entitled to a six-month holiday and those that have already started a mortgage payment holiday will be able to top up to a maximum of six months without this being recorded on their credit file. The FCA will announce further details on the scheme, including how customers can continue to apply for this support.
Support for local businesses in England
Throughout the crisis, the Government has provided support for businesses. The Chancellor has confirmed that businesses which are forced to close due to the new restrictions will receive up to £3,000 per month. This is worth over £1 billion a month under the new national restrictions and will benefit over 600,000 businesses. Businesses in the hospitality, leisure and accommodation sectors that have been suffering from reduced demand for a while due to local restrictions will receive back dated grants at 70 per cent of the value of closed grants (up to £2,100 per month) for this period. The Chancellor is also providing one off funding of £1.1 billion to local authorities to support businesses more broadly over the coming months, who are a key part of our local economies.
More funding for English Local Authorities to support their local healthcare response
Up to £500 million will be provided to local councils for local public health initiatives, such as additional contact tracing, testing for hard-to-reach groups and communications. The Contain Outbreak Management Fund has already supported several English Upper Tier Local Authorities to fund local public health initiatives. Where necessary, they will have this funding topped up to a maximum of £8 per head of population. If they have not received any to date, they will be entitled to the full £8 per head.
The Government is also providing additional funding to local authorities to support the Clinically Extremely Vulnerable now that revised guidance is in place nationally. Funding will be provided of up to £14.60 per Clinically Extremely Vulnerable person for the 28-day period that the restrictions are in force. It will review this funding after the 28-day period should the strictest guidance remain in place in any one area once the initial 28-day period is over.