Thank you for contacting me about the package of tougher measures to tackle the spread of coronavirus which were set out by the Prime Minister on 31 October.
I will do everything I can to ensure we are taking the necessary steps to provide further financial support to protect jobs and businesses, and I welcome the changes that have been made, which will provide a vital safety net for individuals and businesses across the UK.
It is clear that the economic effects of fighting COVID-19 last longer for businesses than the duration of any given restrictions, and we need to go further with our support. I welcome the fact that the Coronavirus Job Retention Scheme has been extended until March in response to new national restrictions, and to give people and businesses across the whole United Kingdom the certainty they need over what will be a difficult winter. Under the extension the government will pay 80 per cent of wages up to a cap of £2,500, with employers paying employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work. Flexible furloughing will be allowed in addition to full-time furloughing.
Following these changes, the Job Support Scheme is postponed. The CJRS will be reviewed in January to ensure that the Scheme provides the appropriate level of support to businesses in whatever the economic circumstances may be at that time. The furlough scheme has always been designed and delivered for everyone in the United Kingdom, no matter where they live. I also welcome that the Devolved Administrations will receive an additional £2 billion as part of the guarantee of resource funding, providing at least £16 billion this year above the funding outlined in the Spring Budget 2020.
We must do whatever it takes to protect jobs and livelihoods across the UK, and we must adapt our support as the path of the virus changes. It is right that the Self-Employed Income Support Scheme has been adjusted to ensure parity with the CJRS. The SEISS grant rate for the November to January period will increase from 40 per cent to 80 per cent of average trading profits, up to a maximum of £7,500. Increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.
In addition, cash grants to businesses will continue with up to £3,000 per month for businesses which are closed in England, and existing loan schemes – such as Bounce Back Loans, CBILS and the Future Fund – are being extended until the end of January, with an ability to top-up Bounce Back Loans.
On a local level, £1.1 billion has been provided to councils to enable them to support businesses and local economies over the winter months, and councils will have access to up to £500 million funding to support the local healthcare response.
We are seeing the impact of coronavirus on our economy and that is why unprecedented actions have been taken to support businesses and indeed people in their jobs and incomes through what is a very difficult time. The policy response will have substantial direct budgetary costs, but the measures that have been put in place to support businesses and individuals, including the self-employed, through this temporary crisis will prevent greater economic and fiscal damage in the long term. The immediate cost of this comprehensive support may be high, but the OBR says that it is confident that the cost of inaction would ultimately have been much greater.
I will, of course, continue to monitor this issue closely and to properly scrutinise these measures as far as I can in Parliament. Measures must continue to be proportionate to the risk the virus poses, and the impact on the economy, livelihoods and personal freedoms cannot be too great. It is important that we do not destroy livelihoods while saving lives. It is my belief that in the context of balancing the objectives of saving lives and saving livelihoods, blanket restrictions should be a last resort.
The Jobs Retention Bonus (JRB) will not be paid in February and the government will redeploy a retention incentive at the appropriate time. As the CJRS is being extended to the end of March 2021, the intention behind the JRB of encouraging employers to keep people in work until the end of January falls away.
Once again, I will be working tirelessly with my parliamentary colleagues to ensure that support is going to those who need it.
Thank you again for taking the time to contact me.
Craig Whittaker
November 2020