COVID-19: Weekly UK Public Affairs Round-up
United Kingdom | 22nd January 2021
This week the UK continued to make progress with its vaccination programme, with almost five million people having now received at least one dose. However, warnings have surfaced that potential supply issues could hamper further acceleration in months to come. In the near term, with demand on NHS frontline services remaining at unprecedented levels, the Home Secretary has implored citizens to follow to the rules, and raised fines for breaches, in a bid to keep case numbers down.
200 vaccines a minute as total nears five million
21st January: On Thursday, Home Secretary Priti Patel revealed that just under five million people have received at least one dose of a COVID-19 vaccine across the UK. This latest update follows an announcement on Tuesday that over half of those aged over 80 have now received a vaccine.
In light of such progress, the Government confirmed on Tuesday that letters have begun to be sent to those aged over 70 this week, inviting them to receive their first dose. Vaccination sites with enough supply and capacity to deal with septuagenarians have already begun to immunise those in the third and fourth risk category, i.e. those over 70 and the clinically vulnerable.
This represents a rare moment of positivity for the Government who are faced with the unenviable task of enforcing continued lockdowns, while being unable to offer a clear timeframe for lifting of restrictions. With persistently high transmission rates, unprecidented pressure on NHS services and the economy continuing to rely on Government support to prop itself up, a moment of national and political inflection approaches as the UK nears the unwelcome milestone of 100,000 deaths linked to COVID since the beginning of the crisis.
All eyes on supplies
Key to the Government’s future progress with its ambitious vaccination programme is an unhindered supply chain able to match the speed set by the health service. However, worries are growing that soon the UK may face issues with slowing supply. The fears come as Pfizer announced that they will be decreasing deliveries of its COVID-19 vaccine to the UK and other countries in the coming weeks as it renovates its manufacturing facility in Belgium. While the renovation is intended to increase production in the long term, the interim disruption presents a challenge to governments across Europe that have set themselves ambitious rollout targets. To achieve its mid-February target, daily figures will soon have to reach 350,000, a task the Government remain confident of conquering.
Preliminary Israeli data poses questions for Ministers
As well as tackling supply issues, the Government also faced questions this week regarding the decision to extend the gap between jabs from 2 to 12 weeks, as early research from Israel suggested such a tactic may not be as effective as first thought. When announcing the decision to move to 12 weeks, ministers quoted data from the Joint Committee on Vaccination and Immunisation (JCVI) that suggested just a single dose was up to 89% effective. However, more recent Israeli studies suggest this figure could in fact be as low as 33%. The Government’s Chief Scienfic Advisor Sir Patrick Vallance said the UK would look carefully as more detailed data emerged, conceding that the 89% achieved in clinical trials was unlikely to materialise in a real world setting, although the vaccine undoubtedly still hugely reduces the risk of serious disease. At present there appears to be little appetite for the UK Government to revisit their policy in this regard, which is reinforced by evidence that, even if effectiveness is considerably reduced, the vaccine reduces the risk of severe illness and death even for those subsequently infected.
Tougher punishments brought in for rule-breakers
21st January: On Thursday, Home Secretary Priti Patel announced the introduction of further measures aimed to deter members of the public from contravening lockdown regulations. Speaking at a televised press conference alongside the Chair of the National Police Chiefs’ Council and the NHS Regional Medical Director for London, Patel disclosed that those attending house parties or gatherings of more than 15 people could now be fined £800, with the fine doubling on each repeat offence up to £6400. Fines of up to £10,000 still only apply to organisers of gatherings.
The introduction of these measures comes just a matter of days after the Home Secretary last addressed the public, imploring them to respect lockdown restrictions. On Thursday Patel again praised the majority of the public who are seen to be complying, but it appears as if the Government is struggling to ensure a stubborn minority stay within the rules.
- 21st January: On Thursday, First Minister Arlene Foster confirmed that current lockdown restrictions in Northern Ireland are to be extended until 5th March. Speaking at a press conference in Dungannon, Foster announced that the R-rate in the country is estimated to be at 0.65-0.85 and that all those over 80 in Northern Ireland will have been offered a vaccine by the end of the week. However, following a meeting with health officials Foster described the move to extend restrictions as “appropriate and necessary”.
- 8th January: On Monday, the Welsh Government announced an extra £40 million in emergency funding for universities. The funding will be directed by universities to providing financial support to the most vulnerable students, as well as strengthening advice and support services for students. In addition to this the fund hopes to tackle ‘digital poverty’ by enabling better access to online learning.
- 15th January: The Scottish Government has released data showing that more than £55 million was paid in business support in the last quarter of 2020. The statistics show that most of the money was released through the Strategic Framework Business Fund which processed £31.4 million. The COVID-19 Restrictions Fund which covered businesses across the Scottish ‘circuit break’ lockdown period paid out £16.7 million. Following the implementation of tighter restrictions this month, more businesses in Scotland have become eligible for the Strategic Framework Business Fund.
- 16th January: Aviation Minister Robert Courts announced on social media on Saturday that the Airport and Ground Operations Support Scheme, first suggested in November, will be introduced this month. The scheme is yet to be fully outlined, however it is known that applicants will be able to apply for grants up to £8 million. The money will be used to cover fixed costs such as business rates.
|Daily||Last 7 days||Rate per 100k resident population|
|Positive Cases||37,892||283,392 (-23.6%)||449.8|
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 21st January 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
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, and was originally extended until 31st March 2021. On 17th December it was announced that the scheme would be extended by a further month until 31st April 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. The Government updated advice on 19th November to provide clarity on valid excuses for missing the claim deadline. Employers must contact HMRC to ask about submitting a late claim.
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. 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. As of 29th November, the online service to claim the third grant is open, with deadline for applications 29 January 2021.
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. For 12 months, the scheme will offer four-year funding of at least 10% 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 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. As of 30 November, there are 27 lenders taking part in the scheme, including all main retail banks. On 17 December, the application deadline for the scheme was extended to 31 March 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 and will be determined and administered by 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. 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. As of 30 November, there are 117 lenders participating in the scheme, including all main retail banks. On 17 December, the application deadline for the scheme was extended to 31 March 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. On 17 December, the application deadline for the scheme was extended to 31 March 2021.
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 took effect on 15th July, and will last until 31 March 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. To opt in, businesses must submit outstanding VAT returns from the last four years, correct any errors on VAT returns before 31 December, and ensure they know how much they owe. In order to use the scheme, businesses must opt in before the end of March 2021.
Deferral of Self-Assessment Payment: Income tax payments due under Self-Assessment on 31st July 2020 have been 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. The Government will make payments by Bacs on 14th working day of the month.
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. On 5th January businesses required to close due to national restrictions imposed by the government could claim a one-off grant of up to £9,000 with firms of a rateable value of over £51,000 able to claim the full amount.
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.
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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