COVID-19: Weekly UK Public Affairs Round-up

United Kingdom | 5th April 2021

COVID-19

People in England are enjoying more freedoms this week as the Government’s timetable for easing restrictions reached its next milestone. Ahead of the Easter break, meetings with family and friends are now permitted for the first time in 2021. While the need for caution remains the Government’s overarching message, the success of the vaccine programme and the latest data suggest there is plenty to be hopeful about. Furthermore, ministers this week concluded a deal with pharmaceutical giant GlaxoSmithKline on production of the Novavax vaccine, which will see more of the vaccine supply chain remain in the UK.

The end of 'Stay at Home'

29th March: On Monday, restrictions across England eased as the nation entered the latest phase of the roadmap out of lockdown. The ‘Stay at Home’ command has been replaced by calls for citizens to ‘stay local’ with outdoor socialising also making its long-awaited return. Under current restrictions groups of up to six people, or those of two different households, are now permitted to meet outside, including in private gardens. Additionally, outdoor sporting facilities have reopened with organised sports recommencing.

Furthermore, from Thursday the shielding advice to the UK’s four-million clinically vulnerable people has relaxed, with those affected now advised only to keep social contact at a low level and work from home where possible.

Addressing the nation on Monday from the new Downing Street briefing room, the Prime Minister described the easing of restrictions as a “small step to freedom”, praising the British people for the caution they have shown so far. With over 30 million people now having received their first jabs, and many in high risk groups due to receive their second dose imminently, the UK Government has strong reason to feel positive about the remainder of the roadmap. The Government maintains that it is on track to hit its target of vaccinating all adults by the end of July, and early data secured following the re-opening of schools shows a negligible impact on infection rates.

However, the rising number of cases on the European continent is a cause for concern. The Prime Minister has warned that the effects of the wave may soon felt in the UK. However, scientific advisers, including Sir Patrick Vallance and Professor Chris Whitty have played down the threat, both stating that it was the possibility of new variants emerging from Europe that concerned them primarily and not merely the prevalence of cases. The early success of the vaccine effort has much to do with this absence of panic.

Vaccine programme making headway

The extremely positive downward trends in infections, hospitalisations and deaths that have allowed the easing to take place can largely be attributed to the success of the vaccination programme. The latest figures released by the ONS show that over half of the UK population now has antibodies against COVID-19. The importance of vaccination in this statisticis shown by the increased prevalence of antibodies in older segments of the population. Furthermore, the vaccination programme has already been accredited with saving over 6,000 lives in England by Public Health England analysis and a separate study from Warwick University. For the Government therefore, the challenge will be maintaining this momentum and encouraging vaccination take-up amongst those segments of the population that are currently hesitatant.

Relaxation on track across the devolved nations

In an announcement on Tuesday, Scottish First Minister Nicola Sturgeon announced that the planned easing of Covid restrictions in Scotland will go ahead despite cases "plateauing" rather than continuing to decline. The Scottish Government’s "Stay at Home" order will be removed from Friday and replaced with a "Stay Local" rule. On Monday, hairdressers and barbers can reopen for pre-booked appointments, click and collect shopping will be permitted, and homeware shops and garden centres can welcome back customers.

In Wales, First Minister Mark Drayford will give a press conference today that will outline the next milestrones in the relaxation of COVID-19 restrictions in Wales. It is expected that the Welsh government will set a course that will see Wales move into alert level three by mid-May should rates continue to fall and the public health situation be in a position to allow that to happen. Under the current plans, schools will fully return and travel restrictions will be lifted on the 12th of April, and by 26th April outdoor attractions and hospitality will be able to resume, albeit with social distancing restritions in place. From 3rd May outdoor activities for up to 30 people will be permitted. On 12th May gyms and leisure facilities will be able to reopen, and two households will be able to meet indoors. The next review of resrictions will be on 10th May.

Novavax/GSK deal adds to homegrown armoury

29th March:Monday saw the UK Government secure a momentous deal with pharmaceutical giants GlaxoSmithKline(GSK), in which the pharmaceutical company will bottle and finish 60 million doses of the Novavax vaccine at its facility in Barnard Castle, County Durham. Other core components of the vaccine are also produced nearby.

Although not yet approved in the UK, the Novavax vaccine is expected to be submitted for approval over the next three months after showing strong efficacy in a recent late-stage trial. Early research shows the vaccine to be 86% effective against the Kent variant of the virus and 96% effective in combating cases of the original strain, making it yet another effective tool at the NHS’ disposal.

The deal is another major coup for the UK’s Vaccine Taskforce,and greatly strengthens the UK’s hand in producing its own vaccines, as challenges in Europe still persist. With theEU muting vaccine export bans, British efforts to establish a domestic manufacturing capability had taken on an increased importance in recent weeks.

Other News

  • 26th March: On Friday the Government announced an additional £12.9 million in funding to enable local councils to better support those self-isolating. The package, includes funding for a free medicines delivery service, and is designed to address the practical challenges of self-isolation allowing maximum compliance.
  • 28th March: On Sunday the Government announced an expansion to the workplace testing programme. As a result of the expansion, rapid home testing is to be made available for all businesses with over ten employees who cannot offer on-site testing. Currently over 60,000 businesses are already registered for regular and rapid tests as part of the programme. Businesses interested must register by April 12.
  • 30th March: Further surge testing was deployed on Tuesday following the discovery of the South African variant in Bolton.

Covid-19 Statistics

Daily Last 7 days Rate per 100k resident population
Positive Cases 4,040 35,460 (-7.9%) 56.2
Deaths 56 387 (-35%) 0.6

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 Wednesday 31st March 2021.

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

Coronavirus Job Retention Scheme: Since March 2020, employers have been able to claim 80% of their usual monthly wage costs for furloughed employees, limited to £2,500 per individual per month, in addition to the associated Employer National Insurance and minimum automatic enrolment employer pension contributions. Furloughed workers are able to work part-time, with employers sharing salary costs with the Government and covering National Insurance and pension contributions. To qualify for furlough payments, employees must have been on the payroll from 30th October 2020. The scheme will run until 30 September 2021 with employees receiving 80% of their pay for the entire period. Employers will be asked to contribute towards the cost of furloughed employees’ wages from July, paying 10% of the cost in the first month and then 20% across August and September.

Jobs Retention Bonus: The Job Retention Bonus is a £1,000 one-off taxable payment to employers for each eligible employee that was furloughed and kept continuously employed until 31st January 2021. Employers will be able to claim the bonus between 15th February 2021 and March 31st 2021. There will not be an additional bonus for employers who keep employing beyond 31st January 2021.

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 those advised to shield due to clinical vulnerabilities. Employers are able to ask employees for a “shielding note” from a doctor or health authority advising them to shield. The scheme is limited to two weeks per employee.

Self-employed Income Support Scheme (SEISS): Grants have been made available for those with trading profits of less than £50,000 that have experienced a loss of earnings due to Covid. To qualify at least half of a claimants income must come from self-employment. Three grants have already been paid out with applications currently closed.  A fourth and fifth grant were confirmed at the March Budget. Applications for the fourth grant will open in late April and will cover 80% of 3 months’ average trading profits capped at £7,500. The fifth grant, available from late July, will apply predominantly to those most affected by the pandemic with 80% grants only available to those who have seen a turnover reduction of 30% or more.

Self-isolation Low Income Payment: To support individuals during self-isolation a £500 Test and Trace Support Payment is available to those who will lose income or face financial hardship as a result of self-isolating. Those on, or living with a partner on, a range of Government benefits are also eligible for the payment. Applications for payment can be made through local councils, payments are subject to income tax but not National Insurance contributions. Parents or guardians of a child who has been told to self-isolate may also qualify for the payment if they cannot work from home.

Business disruption financing measures

Coronavirus Commercial Financing Facility: The Bank of England’s commercial financing facility is designed to support large companies of investment grade standing, allowing qualifying businesses to issue short-term debt of up to one-year maturity, which will be purchased by the Bank of England. It will operate until at least 20th March 2021 and for as long as steps are needed to relieve cash flow pressure on firms.

Bank of England Term Funding Scheme: The Term Funding Scheme offers four-year funding of at least 10% of participants’ stock at interest rates at, or very close to, Bank Rate. Drawdowns on the scheme will run until 30th April 2021.

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 and administered using the existing Enterprise Finance Guarantee. There are 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. The application deadline for the scheme is 31st March 2021.

Coronavirus Business Interruption Loan Scheme: Sharing similar characteristics to the Large Business Interruption Loan Scheme, financing of up to £5m is made available to those with an annual turnover of less than £45m. Lending is also extended, to a maximum of six years and the Government is paying the first 12 months’ interest. As of 30th November, there are 117 lenders participating in the scheme, including all main retail banks. The application deadline for the scheme is 31st March 2021.

Bounce Back Loan Scheme: Bounce Back Loans were introduced in April 2020 to give small businesses fast access to loans of between £2,000 and £50,000. Loans were made available through accredited lenders with the Government acting as guarantor and paying interest for the first 12 months on all loans. Firms are to begin repayments within 12 months. On 8th February, the Treasury announced that those with bounce-back loans are to be granted extra flexibility with repayments. Loans can now be extended with payment schedules altered to a company’s specific needs. Additionally, all payments can be delayed for a further 6 months meaning for some, the first payment is now due 18 months after taking out the loan.

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.

Restart Grant Scheme: Available from April, the Restart Grant is designed to assist non-essential retail and the hospitality and leisure sectors as they reopen. Non-essential retail businesses will be entitled to a grant of up to £6,000 per premises while hospitality and leisure operations will be entitled to a grant of up to £18,000.

Recovery Loan Scheme: The Recovery Loan Scheme ensures businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing COVID-19 loan schemes close. The finance can be used for any legitimate business purpose, including growth and investment. The Government will guarantee 80% of the finance to the lender. The scheme launches on 6th April and is open until 31st December, subject to review. Loans will be available through a network of accredited lenders, whose names will be made public in due course.

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 last until 30th September at which point an interim rate of 12.5% will be in place until April 2022.

VAT Deferral: Those who deferred VAT payments due between 20th March 2020 and 30th June 2020 can pay the deferred amount in full by 31st March 2021 or join a VAT deferral payment scheme, paying in smaller amounts over a longer period of time. On 9th February a new VAT deferral payment scheme was set up to help businesses pay their deferred VAT. The scheme, which will be open from 23rd February and is set to run until 21st June, will allow companies to pay their deferred VAT in equal interest-free instalments. Companies can choose how many instalments they wish for payments to be divided over with eleven the maximum number. Upon joining the scheme firms must pay their first instalment. Those already on existing VAT repayment programmes will be invited to join the new payment system from 10th March 2021.

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: Cash bonuses of up to £3,000 per apprentice will be available to employers that hire apprentices between April and September in 2021. This is in addition to the existing £1,000 that employers receive for taking on each new apprentice aged 16-18 or those aged under 25 with an Education, Health and Care Plan.

Local Restriction Support Grant: This grant is available for businesses that were open as usual before being required to close with the implementation of national restrictions from the 5th January 2021 onwards. Grants are based on the rateable value of the property on the first day of restrictions. Businesses with a rateable value of £51,000 or above are eligible for a cash grant of £4,500 for each 42-day qualifying period. Grants will be paid by local councils while national restrictions remain. Eligible businesses can get one grant for each non-domestic property, the deadline to apply is 31st March 2021.

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: A 100% business rates holiday will be in place until June 31st at which point a temporary rate, equivalent to one third of the normal charge will be in place until the end of 2021.

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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