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Chancellor announces greatest economic intervention to support the economy

Croydon BID is continuing to represent your views and your concerns as we all grapple with the challenges of the COVID-19 crisis and the impact it is having on local economies up and down the country.

We are pleased to provide our members and business community with a summary of the announcements following the Prime Minister’s daily press conference. We hope that you find it useful.

The Chancellor’s announcement today is a timely intervention and is positive news for Croydon’s businesses. It is most welcome and will enable businesses to retain their employees as we all navigate this unprecedented crisis.

DAILY BUSINESS BRIEFING FROM PM’s COVID-19 PRESS CONFERENCE

Key points made at today’s press conference:

  • Government sets up new Coronavirus job retention scheme
  • Open to any employer in the country, ‘small or large, charitable or non-profit’
  • Employers to contact HMRC for a grant to cover up to 80% of the salary of retained workers
  • Grant will cover up to a total of £2,500 a month
  • Will cover wages backdated to 1 March and be open for at least three months
  • No limit in the amount of funding available with first grants expected to be paid ‘within weeks’
  • Next quarter of VAT payments to be deferred until the end of June
  • New measures for the unemployed and self-employed
  • Follows Chancellor’s £330bn package of support announced earlier this week, who also today extended business interruption loan scheme by a further six months to a year
  • Cafes, pubs, bars, restaurants, gyms and restaurants to close tonight and not reopen until further notice
  • Nightclubs, theatres, cinemas and leisure centres to also close
  • Closure situation to be reviewed each month

An unprecedented multi-billion support package for business and jobs was announced by Prime Minister Boris Johnson and Chancellor Rishi Sunak at today’s press conference.

Announcing the ‘greatest economic intervention in the history of the British State’, which he described as the ‘most comprehensive response in the world’, Chancellor Rishi Sunak promised:

1. A National Coronavirus Job Retention Scheme: HMRC will provide grants to business to cover the wages of people not working or furloughed – 80% of salary to a maximum of £2,500 per month. The help would be backdated to 1 March, be available within weeks and grants made before the end of April. The grants will be for three months and extended as necessary and there is no limit set to the amount of funding available, which can be accessed by small or large businesses as well as charities and not-for-profits.

2. The Coronavirus Business Interruption Loan scheme would have its interest free period extended from six to 12 months and will be available from Monday. Further measures will be bought forward for large and medium businesses.

3. Immediate cashflow support for businesses by deferring this quarter’s VAT to the end of June and businesses will have to the end of the financial year to pay bills.

An enhanced ‘safety net’ for workers was also announced, including new measures for the unemployed and self-employed:

1. Universal credit will be increased by £1,000 per year, and Working Tax Credit by the same amount

2. Self-employed workers will be able to access the full Universal Credit equivalent to Statutory Sick Pay for employees, and Self Assessment taxes would be deferred to 2021.

The Chancellor said a major advertising campaign to the community was planned and begged businesses to look at it carefully before making any decision to lay staff off.

The announcements followed the news that pubs, clubs, bars and restaurants would need to close with immediate effect (although take out food could still be made available). In addition, the measures will be extended to nightclubs, theatres, cinemas, gyms and leisure centres. There will be a monthly review as to whether the restrictions can be relaxed.

Prime Minister Boris Johnson said the government would support workers and businesses in a way government had never done before.

He said: “We see these steps as temporary and I am confident that the UK economy will bounce back, but it is clear that the speed of our recovery depends on our collaborative ability to get on top of the virus now.

“I know how much our workers and businesses deserve the financial reassurance we are giving. We will get through it together and we will beat this virus.”

The government has set up a business support helpline, which is open Monday-Friday, 9am-6pm. More information can be found here.

The latest UK Government business advice can be found here.

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