Stay at Home, Protect the NHS, Save Lives
I wanted to take this opportunity to update my constituents on the UK Government response to COVID-19, in particular the economic measures the UK Government is taking. A package of support has been announced over the past few weeks to help tackle the impact of COVID-19 on individual’s finances and the UK economy.
For the first time in our history, the British government is going to step in and help pay people’s wages – a scheme which is one of the most generous of any in the world – paying grants to support as many jobs as possible. We will place no limit on these grants. Any employer in the country – large, small, charitable or for profit – who promises to retain their staff, can apply for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll rather than being laid off. Government grants will cover 80 per cent of the salary of retained workers up to a total of £2,500 a month – above the median income. The cost of wages will be backdated to 1st March and will be met initially for at least three months – and we will extend the scheme for longer if necessary.
We are launching the Self-Employed Income Support Scheme to make sure people who work for themselves are getting the financial support they need. The Government will pay self-employed people across the whole UK who have been adversely affected by coronavirus a grant worth 80 per cent of their average monthly profits over the last three years, up to £2,500 a month, for three months – but we will extend it for longer if necessary. Self-employed people who are eligible will be contacted by HMRC directly, asked to fill out a simple online form, and HMRC will pay the grant directly into their bank account. The scheme will only be open to those with trading profits up to £50,000, leaving 95 per cent of people who are self-employed eligible for the scheme. HMRC will also ask people to demonstrate that the majority of their income comes from self-employment, and, to minimise fraud, only those who are already in self-employment, and who have a tax return for 2019, will be able to apply. We expect people to access the scheme by the beginning of June at the latest.
We are deferring payment of the next three months of VAT, a direct injection of over £30 billion of cash to business, equivalent to 1.5 per cent of GDP. That means no business will pay any VAT from now until the end of June; and they will have until the end of the financial year to repay those bills.
The Coronavirus Business Interruption Loan Scheme will now be interest free for twelve months, an extension from the initial announcement of six months. We have already introduced and announced an extension to the Business Interruption Loan Scheme, which is for small and medium-sized businesses. On Tuesday, the Chancellor expanded the amount that can be borrowed from £1.2 million to £5 million and we are now extending the time frame of no interest on these loans from six months to twelve months. Those who are self-employed can apply for this scheme as well.
Universal Credit and Working Tax Credit is being increased by £1,000 a year – a cash injection of nearly £7 billion into the welfare system to act as a safety net for those who most need it. We are increasing the Universal Credit standard allowance, for the next 12 months, by £1,000 a year. We will also increase Working Tax Credit by the same amount for the next 12 months. Together these measures will benefit over 4 million of our most vulnerable households.
The minimum income floor will be suspended for twelve months – meaning self-employed people can now access, in full, Universal Credit at a rate that is equivalent to Statutory Sick Pay for employees. For the self-employed, we are also deferring income tax self-assessment payments for July until the end of January 2021. The UK Government will announce further measures to support self-employed people over the coming days.
We have also announced nearly £1 billion of support for renters, by increasing the amounts available through housing benefit and Universal Credit, so that the Local Housing Allowance will cover at least 30 per cent of market rents in local areas.
I would like to stress that these are just some of the measures that the UK Government is taking. The Welsh Government is also responsible for many aspects of the response to COVID-19, including healthcare measures and the closure of schools. The Secretary of State for Wales’ office has published a regularly updated advice page with links to all support and advice available for individuals and businesses in Wales. This can be accessed here: https://www.gov.uk/guidance/coronavirus-covid-19-information-for-individuals-and-businesses-in-wales.
As you can imagine, I have been contacted by many worried constituents during this difficult time. My team and I have been working tirelessly to help everyone who has been in touch with us and we will continue to do so. If we can help you at all during this most worrying period, please do not hesitate to contact us
The most important point that I want to stress is this: following Government advice will see this crisis conclude more quickly. Stay at home. Protect the NHS. Save Lives.
I wish all of my constituents the best during this difficult time.
Yours sincerely,
Fay Jones MP
Member of Parliament for Brecon and Radnorshire