COVID-19: Weekly UK Public Affairs Round-up

United Kingdom | 20th November 2020


COVID-19 this week brought disruption to the highest echelons of Government as the Prime Minister was forced into self-isolation, resulting in the first ever virtual Prime Minister’s Questions. With debate growing about what a Covid Christmas will look like, Downing Street confirmed it is in talks with the devolved administrations to implement a consistent “four nation approach” to restrictions to give families certainty and consistency across the UK. However, with areas of Scotland and Northern Ireland facing tougher curbs in the coming weeks, that that remains far from assured.

PM self-isolating as PMQs move online

16th November: On Monday, Prime Minister Boris Johnson announced that he is self-isolating for two weeks on the instruction of NHS Test and Trace, after meeting with a Conservative MP who subseqently tested positive for COVID-19. Having contracted the virus earlier in the year, the Prime Minister is understood to be in good health and is not showing any associated symptoms.

The Prime Minister’s self-isolation led to the first ever virtual Prime Minister’s Questions on Wednesday, after he chose to take questions from the House of Commons via videolink rather than have First Secretary of State (and Foreign Secretary) Dominic Raab step in.

Labour leader Sir Keir Starmer – who was in the House of Commons - took the opportunity to question Mr Johnson on the National Audit Office’s report into Government procurement during the pandemic. This was commissioned in light of growing concerns about the credentials of the head of NHS Test and Trace Dido Harding and Chair of the Vaccine Task Force Kate Bingham, both of whom are married to Conservative MPs and were appointed to their positions only after the pandemic began. Starmer also criticised the Government’s lack of oversight of PPE contracts when it awarded contracts valued at £17 billion to private companies. This came on the back of the National Audit Office’s report this week, which provided a damning assessment of the Government’s approach to awarding PPE contracts and confirmed that MPs’ contacts were given priority without competitive tender. This report will provide valuable ammunition for the opposition as they attempt to hold the Government accountable for activities at the beginning of the pandemic.

Lack of clarity around Christmas restrictions

18th November: As England continues it’s nationwide lockdown, Ministers are currently considering ways to ensure that the impact of restrictions on movement over the Christmas period are minimised. There has been some speculation that options include allowing families to mix indoors for five days from Christmas Eve. However, Government officials have been very clear about the trade-off that would be made; medical director of NHS Test and Trace Dr Susan Hopkins, warned that for every day the rules are relaxed over the Christmas period, more days under harsher restrictions may be needed to get on top of the virus again. Final decisions will be made in the coming weeks as health chiefs observe the impact of the current lockdown on virus cases. p>

Downing Street hopes to take a “four nation” approach to Christmas restrictions, with standardisation of measures in England and the devolved nations reflective of the number of families that live across borders. The Government has opened up discussions with the devolved administations to this end. While a shared objective in principle, the devolved nations continue to be responsible for both setting and implementing restrictions independently and there is no guarantee that agreement will be reached. A further meeting between the different administrations has been scheduled for next Wednesday.

The latest data from Public Health England has also highlighted that infection rates are plateauing in the North West, Yorkshire and the Humber. Health officials point to the effectivity of the tiered system of transmission rates in place before the lockdown, implying that ministers could be laying the groundwork for a return to this system on 2nd December.

Sturgeon changes COVID-19 restriction levels

17th November: First Minister of Scotland Nicola Sturgeon announced on Tuesday that changes would be made to the level of COVID-19 restrictions imposed on different local authorities in Scotland, which is still implementing a tiered system of lockdown restrictions. p>

In response to “stubbornly high” virus levels, 11 council areas are to be upgraded from Level 3 to Level 4, including the City of Glasgow and West Lothian, who will remain in the higher tier until at least Friday 11th December. Under Scottish Tier 4 restrictions, non-essential shops, businesses, pubs, restaurants and gyms will shut their doors for a second time this year.

Two council areas will be downgraded from Level 3 to Level 2, while 19 council areas will experience no change.

Northern Ireland announces another two-week circuit breaker lockdown

19th November: On Thursday, the Northern Irish Government revealed that it will introduce a two-week circuit breaker lasting from 27th November until 11th December, in order to slow the spread of COVID-19. The Executive stated it made the decision after modelling indicated that a circuit breaker would offer greater likelihood for avoidance of further restrictions in the run up to Christmas. A partial lockdown has already been in place since 16th October..

Businesses that had been planning to reopen today in light of current restrictions can continue to do so, but must return to closure in a week’s time. The measures will see harsher restrictions including the closure of all non-essential retail and closure of hospitality venues. Schools and universities will remain open. A financial support package to help those affected by the measures is due to be developed over the coming days.

£2.2bn additional funding for small businesses

13th November: Business Secretary Alok Sharma has announced additional funding of up to £2.2 billion to local councils to help support small businesses through the current phase of national COVID-19 lockdown restrictions. Funding was transferred to councils on 13th November, which will see two different schemes offered to businesses - one for businesses that have been forced to close, and another to support struggling businesses. The news came as the Government announced that over 19,000 jobs have already been created for unemployed young people through the Kickstart Scheme. The Scheme was designed to help young people hardest hit by the pandemic and will help to support future employment prospects in tech, film, TV and communications.

More good news for vaccine hopefuls

16th November: The Government announced on Monday that it has secured 5 million doses of the Moderna vaccine, after initial data from trials showed the vaccine candidate to be almost 95% effective at protecting against COVID-19. This would provide enough vaccine to inoculate around 2.5 million people. There are hopes the vaccine could be delivered to the UK and Europe from early Spring next year, following initial deliveries of the Pfizer and Oxford University vaccines which could both be available before the end of the year..

On Thursday, it was announced that the Oxford University vaccine is also having promising results, as phase 2 trials have shown a strong immune response in adults in their 60s and 70s. Researchers have claimed the results are “encouraging” and that early results from phase 3 trials will be expected in coming weeks. While the Oxford data is from an earlier stage than Pfizer or Moderna’s, it is likely that the vaccine could be made widely available soon because it is easier to roll out, as it doesn’t need to be stored at a very low temperatures. The UK Government has ordered 100 million doses of the Oxford vaccine, more than any other potential vaccine provider.

Devolved Nations

  • 17th November: Wales’ First Minister Mark Drakeford has set out plans to hold Covid-secure 2021 Welsh Parliament elections, which will see postal voting encouraged..
  • 13th November: The Welsh Government has dedicated a further £15.7 million to contact tracing efforts, to double the contact tracing workforce in Wales in order to prepare for higher infection rates during the winter period.

Other News

  • 19th November: Travellers arriving into England, Wales and Northern Ireland from five additional countries including Israel and Sri Lanka will no longer have to quarantine.
  • 16th November: The Government has revealed plans to open two new “megalab” diagnostic facilities in 2021, which will add 600,000 to the UK’s daily testing capacity..

Covid-19 Statistics

7 day-rolling average Peak (14th April) 12th November 20th November
Confirmed Cases 5,195 33,470 22,915
Covid-19 deaths 943 563 501

Summary of UK COVID-19 Business support schemes

The following rolling list of UK government business support measures announced in response to the Covid-19 pandemic is updated weekly and is accurate as of Thursday 19th November.

The UK Government has implemented a series of economic interventions aimed at supporting employees, employers and businesses through the uncertainty and potential loss of income resulting from the Covid-19 pandemic. Some have been revised and extended since being announced.

There is an official web portal with details on eligibility and how businesses can apply.

Employment retention measures

Job Support Scheme: The Job Support Scheme is designed to protect viable jobs in businesses that are facing lower demand over the winter months due to Covid-19 and keep their employees attached to the workforce. The company will continue to pay its employee for time worked, but the cost of hours not worked will be split between the employer, the Government (through wage support) and the employee (through a wage reduction). This will ensure that employees earn a minimum of 73% of their normal wages overall, capped at earnings of £3,125. The scheme will open on 1 November 2020 and run for 6 months, until April 2021. On 22 October, the Government reduced the number of hours employees are required to work to qualify from 33% to 20% of their normal hours, rather than the previous 33%. Employer contributions will also be reduced from 33% for hours not worked, to 5%.

On 9 October, the Government altered the Scheme to give further support to business’ required to close in local lockdowns. The Government will pay two thirds of employees’ salaries, to a maximum of £2,083, although their employer has the discretion to pay more than this if they wish.

As of 1 October, the Job Support Scheme has been postponed with the Coronavirus Job Retention Scheme extended as a result of national lockdown restrictions.

Coronavirus Job Retention Scheme: Since March, employers have been able to claim 80% of their usual monthly wage costs for furloughed employees, limited to £2,500 per individual per month, plus the associated Employer National Insurance and minimum automatic enrolment employer pension contributions. Claims were originally able be made to cover the period 1st March – 31st October 2020. From August, furloughed workers have been able to work part-time, with employers sharing salary costs with the Government. Since August, for hours not worked by their employee, employers have been only be asked to cover National Insurance and employer pension contributions.

The scheme was planned to close on 31st October, but this deadline has now been extended until 31st March 2021. The extended scheme will continue to allow employers to continue to claim 80% of their usual monthly wage costs for furloughed employees. Employers do not have to have used the CJRS previously, but claims must relate to employees who have been on the payroll prior to 30th October.

The government published further guidance on 10th November on how to claim. The update stated that any claims after 1st November must be submitted by 11.59pm 14 calendar days after the month being claimed for. Additionally, 30th November is the final day employers can submit or change claims for periods ending on or before 31st October. The government also intends to review the scheme in January to see whether economic circumstances are improving enough to ask employers to contribute more.

Jobs Retention Bonus: The Government will pay employers a £1,000 bonus per employee if they bring someone back to work who was furloughed, on the condition that they are continuously employed through to January. The employee must be paid at least £520 per month on average, from November to the end of January, which is the equivalent of the lower earnings limit for national insurance contributions. Further details on the eligibility criteria can be found here.

In light of the extension of the Job Retention Scheme, the Job Retention Bonus will no longer be paid in February, but a retention incentive will instead be paid at a time the Government deems appropriate.

Coronavirus Statutory Sick Pay Rebate Scheme: The Government will refund eligible Statutory Sick Pay costs to all employers with fewer than 250 employees. This applies to any claim arising as a result of Covid-19, including precautionary self-isolation, and is limited to two weeks per employee. The online service for reclaiming coronavirus sick-pay scheme is now live, with HMRC guidance on eligibility found here. As of 28th October, employers will be able to ask employees for a “shielding note” from a doctor or health authority advising them to shield.

On 10th November, the provision of two weeks Statutory Sick Pay was extended to include those who have been advised by letter to shield due to clinical vulnerabilities should they be unable to work.

Self-employed Income Support Scheme (SEISS): Most self-employed workers qualify for a grant covering a percentage of monthly profits and earnings. The scheme is open to those with trading profits no greater than £50,000 and who have experienced a loss in earnings as a result of the COVID crisis. At least half of a claimant’s income must come from self-employment, and they must be trading when an application is made, or would be except for COVID-19 disruption. Two initial grants closed for applications on 13th July and 19th October 2020, and covered up to 80% and 70% of average monthly trading profits respectively.

The extension of this scheme, announced on 24 September, will provide two grants and will last for six months, from November 2020 to April 2021. Grants will be paid in two lump sum instalments each covering a three-month period. The first grant will cover a three-month period from the start of November until the end of January. The Government will provide a taxable grant covering 20 per cent of average monthly trading profits, paid out in a single instalment covering 3 months’ worth of profits, and capped originally at £1,875 in total. As of 22nd October, the Government have doubled the grant to a £3750 cap. The second grant will cover a three-month period from the start of February until the end of April. The Government will review the level of the second grant and set this in due course.

On 5 November, the Government announced it will provide a SEISS grant extension, with two further grants available for two three month periods covering November 2020 to January 2021 and February 2021 to April 2021. The initial grant will provide a grant equivalent to 80% of 3 months average monthly trading profits, capped at £7,500. Further details around the later grant will be provided in due course.

Self-isolation Low Income Payment: From 28th September, the Government have made self-isolation a legal requirement, and introduced a £500 payment for those on lower incomes who cannot work from home of who have lost income as a result. Fines for those breaching self-isolation requirements start at £1000, increasing to £10,000 for repeat offenders. Just under 4 million people who are in receipt of benefits in England will be eligible for this payment, which will be available to those who are required to self-isolate from 28 September.

Business disruption financing measures

Coronavirus Commercial Financing Facility: Introduced in March, The Bank of England’s new commercial financing facility is designed to support large companies of investment grade standing. It allows qualifying businesses to issue short-term debt of up to one-year maturity, which will be purchased by the Bank of England. The intent is to support short term liquidity, mitigating against cashflow disruption.

Bank of England Term Funding Scheme: In March, the Bank of England has introduced a new Term Funding Scheme with additional incentives for small businesses financed by the issuance of central bank reserves. Over the next 12 months, the scheme will offer four-year funding of at least 5% of participants’ stock at interest rates at, or very close to, Bank Rate.

Coronavirus Large Business Interruption Loan Scheme: This is intended to provide otherwise viable companies with access to short-term liquidity. It provides financing of up to £200m in the form of loans, overdrafts, or invoice and asset finance to businesses with an annual turnover of between £45m and £500m. Lending is for a maximum of three years. Individual lending limits apply, determined using the existing Enterprise Finance Guarantee. Lenders will be one of 40 accredited institutions, including all major high-street banks. To incentivise them to lend, the Government – through the British Business Bank - is guaranteeing 80% of the value of a loan. Companies that borrow over £50 million through the scheme will be subject to restrictions on dividend payments, senior pay and share buy-backs. On 2 October, the application deadline for the scheme was extended to January 31 2021.

Coronavirus Business Interruption Loan Scheme: This is intended to provide otherwise viable companies with access to short-term liquidity. It provides financing of up to £5m in the form of loans, overdrafts, or invoice and asset finance to businesses with an annual turnover below £45m. Lending is for a maximum of six years and the Government will pay the first 12 months’ interest. Individual lending limits apply, determined using the existing Enterprise Finance Guarantee. Lenders will be one of 40 accredited institutions, including all major high-street banks. To incentivise them to lend, the Government – through the British Business Bank - is guaranteeing 80% of the value of a loan. On 30th July, the Government announced an extension of the scheme to include smaller businesses which have less than 50 employees and a turnover of less than £9m. Applications to the Scheme will close after 30 November. On 2 October, the application deadline for the scheme was extended to January 31 2021.

Bounce Back Loan Scheme: This is intended to support micro-businesses with short-term cashflow concerns as a result of the COVID crisis. Loans will be made available through accredited lenders to businesses with an annual turnover below £200,000 a year, capped at a maximum of £50,000. The Government will act as guarantor for 100% of the loan, increasing the chance of acceptance and ensuring that the loan does not need to be secured against personal assets. The Government will pay interest for the first year, with no repayments due during this period.

Trade Credit Insurance Guarantee: Businesses with supply chains that are reliant on Trade Credit Insurance may apply for support from the Government. The Government will now temporarily guarantee business-to-business transactions currently supported by Trade Credit Insurance, ensuring the majority of insurance coverage will be maintained across the market. The Trade Credit Insurance (TCI) guarantee will cover over £171 billion business activity currently insured and the transactions between around 13,000 suppliers and 650,000 buyers.

Tax relief measures

Temporary VAT reduction for hospitality sector: The Government has introduced a temporarily reduced VAT rate of 5%, down from 20%, for certain supplies of hospitality, hotel and holiday accommodation, and admissions to certain attractions. The reduction will be introduced from 15th July, and last until 12 January 2021.

VAT Deferral: The Government has deferred VAT payment demands for the second quarter, meaning that no business will be required to pay outstanding VAT until the 30th of June. Businesses will have until the end of the year to reconcile any accumulated tax debts. The timeframe for repayment, originally until 31st March 2021, was extended on 21st September 2020 to March 2022. Businesses are now able to opt-in to pay their outstanding VAT in smaller amounts over this time.

Deferral of Self-Assessment Payment: Income tax payments due under Self-Assessment on 31st July 2020 will be deferred until 31st January 2021. All self-employed individuals will be eligible.

Support for Businesses Paying Tax: HMRC have established a dedicated COVID-19 helpline to support businesses and self-employed individuals unable to meet tax demands. Bespoke Time to Pay arrangements will be offered to those businesses with a legitimate need and support their recovery while navigating temporary financial challenges. HMRC will also waive late payment penalties and interest where a business experiences administrative difficulty due to COVID-19.

Targeted support measures

Apprentice and Trainee Bonus Scheme: The Government will provide financial incentives for employers to hire young employees, offering businesses a cash bonus of up to £2,000 per apprentice employed and £1000 per trainee taken on. This is in addition to the £1,000 employers already receive for hiring an apprentice, and applies to employers who hire a new apprentice between 1 August 2020 and 31 January 2021.

Local Restriction Support Grant: This grant is available for businesses that have been required to close for at least 3 weeks due to local lockdown restrictions. Businesses with a rateable value of under £51,000 will receive a cash grant of £1,000 for each 3-week period the business is closed, with those of a higher rateable value receiving £1,500 over the same period. Councils may also provide discretionary funding of up to £1,500 to businesses affected by Tier 3 restrictions. On 12th November, support was added for businesses specifically affected by national lockdown restrictions. Under this support, eligible businesses could be entitled to a cash grant from their local council for each 28 day period under national restrictions.

Cash Grant for Retail, Hospitality and Leisure under Local restrictions:: The government will provide funding to local authorities to provide cash grants of up to £2,100 per month, for businesses in the hospitality, accommodation and leisure sector adversely affected by regional restrictions. These grants are available retrospectively from August, and will be administered by local authorities.

Business Rates Holiday for Retail/Hospitality/Leisure venues: The government will provide funding to local authorities to provide cash grants of up to £2,100 per month, for businesses in the hospitality, accommodation and leisure sector adversely affected by regional restrictions. These grants are available retrospectively from August, and will be administered by local authorities.

Business Rate Holiday for Nurseries: Nurseries in England will not have to pay business rates for the 2020-21 tax year. This will apply to properties occupied by providers on the Government’s Early Years Register and are used for the provision of nursery education.

Non-financial measures

Business Support Checker Tool: The UK Government have released a new “support find tool” on the form of a self-assessed questionnaire for businesses and self-employed people across the UK, to allow them to quickly determine what financial support is available to them, to handle the consequences of the pandemic.

Coronavirus Business Support Hub: Businesses can now access a new online portal which aims to compile “key information for businesses including on funding and support, business closures, your responsibilities as an employer and managing your business during coronavirus. The hub also includes information for self-employed people and sole traders.”

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