COVID-19: Weekly UK Public Affairs Round-up | FTI Consulting

COVID-19: Weekly UK Public Affairs Round-up

United Kingdom | 9th April 2021


With data suggesting that over 10,400 lives have been saved by the UK vaccination programme so far, England is set to reopen large sections of its economy from Monday, with many businesses allowed to trade for the first time this year. However, following reports of rare side effects, the UK’s regulator this week altered its advice regarding the administration of the Oxford/AstraZeneca vaccine to those under 30 - though the Government insists this will not impact the rollout.

England on track to ease restrictions

5th April: On Monday, Prime Minister Boris Johnson confirmed that the Government’s “four tests” to review COVID-19 restrictions have been met, and that the next stage of easing in the England’s roadmap out of lockdown can proceed as planned. Following a close review of national infection data, Johnson announced that from 12th April large sections of the economy in England will be permitted to reopen. Non-essential retail, outdoor hospitality venues and indoor leisure and sports facilities will all be allowed to trade for the first time in 2021.

The reopening of so many previously shuttered businesses comes as Covid-related deaths have dropped by 92% since the peak of the second wave, according the Office of National Statistics. However, the Prime Minister urged caution, warning the public that “we can’t be complacent” and encouraging people to get vaccinated when their turn arrives.

To this end, the Government is also encouraging the use of free, twice weekly rapid tests which will be made available to everyone in England from 9th April, the Prime Minister declaring that this will “stop outbreaks in their tracks”. However, Labour’s Shadow Health Secretary Jonathan Ashworth - highlighting those areas where the Government has come in for sustained criticism - stressed that testing must go hand in hand with an effective programme of contact-tracing, backed up by financial support for those needing to isolate.

Relaxation continues in Scotland and is brought forward in Wales

5th April: Scotland marked a significant milestone in the easing of its restrictions this week. Hairdressers, homeware shops, garden centres, and non-essential click-and-collect services have now been permitted to reopen following the lifting of the “stay at home” instruction last Friday.

According to the Scottish Government’s strategy for easing lockdown, the next step on 26th April will allow for all retail premises, tourist accommodation and cultural destinations such as museums to reopen alongside gyms and outdoor hospitality. Scottish First Minister Nicola Sturgeon was optimistic, stating that the “significant impact” of the vaccination programme in Scotland had given the Government confidence in setting possible dates for the next steps out of lockdown.

8th April: Yesterday, Welsh First Minister Mark Drakeford announced that gyms, leisure facilities and fitness facilities will be allowed to reopen and people will be allowed to form extended households from 3rd May, a week earlier than originally planned. This has been made possible due to a fall in transmission rates in Wales from 37 cases per 100,000 people to fewer than 21. Drakeford praised the “incredible vaccination programme” which, he said, continues to go from “strength to strength”.

Age restrictions on Oxford/AstraZeneca Vaccine

8th April: On Wednesday, Public Health England updated its vaccination guidance, stating that, where possible, adults under 30 should be offered an alternative to the Oxford/AstraZeneca COVID-19 vaccine. The new advice follows an investigation by the Medicines and Healthcare products Regulatory Agency (MHRA) into a potential causal link between the vaccine and a small number of instances of blood clots, resulting in 19 reported deaths. Over 20 million doses of the vaccine have so far been administered in the UK.

Despite the updated advice, the Government’s messaging remains that, for those above the age of 30, the benefits of the AstraZeneca vaccine far outweigh the risks. Public Health England analysis released yesterday suggested that the vaccination programme has so far prevented 10,400 of deaths in those aged 60 and above to the end of March.

Despite the updated advice, and lingering concerns that supply of vaccines is likely to fall in April due to manufacturing challenges, the Government has sort to reassure the public that vaccine rollout remains on track to offer all adults a first dose by the end of July. Health Secretary Matt Hancock stated that there are “more than enough” doses of alternative vaccines to cover those aged under 30; that his statement coinciding with the first doses of the Moderna vaccine being administered in the UK this week, the third to be approved for use by the MRHA, only reinforced this point.

The determination to mitigate increased vaccine hesitancy and put the risks into perspective has been mirrored by the European Medicines Agency, which concluded that unusual blood clots should be listed as “a very rare side effect” of the vaccine and stressed that the benefit-risk ratio remained positive. However, EU countries’ disjointed response to the news provided further evidence of the EU’s struggle to agree a common approach to vaccination as European countries including Italy, Spain and Belgium set varying age limits for the vaccination. This comes as only five EU countries met a European Commission goal to vaccinate 80% of people over the age of 80 by the end of March.

Traffic Lights for International Travel

9th April: This morning, the Government’s Global Travel Taskforce set out its approach to safely resuming international travel, with recommendations including the implementation of a new traffic light system to categorise countries based on risk, alongside the introduction of travel certification. 17th May remains the earliest date that normal international travel can resume, although this will not be confirmed until closer to that date.

Under the proposed framework, the traffic light system first deployed last summer will be reimposed. Those arriving from ‘Amber’ and ‘Red’ destinations will be required to isolate for 10 days at home or in a managed quarantine-hotel respectively. Travellers from ‘Green’ countries will not have to quarantine but will still be required to take a Covid test both on entry and exit to the UK.

Nevertheless, concerns about the bureaucratic administration of these processes remain. Labour shadow transport secretary Jim McMahon said more detail and clarity about the Government's strategy was vital as aviation industry leaders raised separate concerns about the potentially prohibitively expensive testing requirements for travellers. With transmission states still high in many popular European holiday destinations, an inevitable delicate balancing act for the Government lies ahead.

Other News

  • 1st April: Last week, the UK Government celebrated the launch of the new ‘Restart Grants Scheme’ which will see “businesses in England in the non-essential retail sector become eligible for one-off grants of up to £6,000. Businesses in the hospitality, accommodation, leisure, personal care and gym sectors, which are reopening later, will be eligible for one-off grants of up to £18,000.
  • 1st April: In line with this, the Coronavirus Large Business Interruption Loan Scheme and the Coronavirus Business Interruption Scheme ended for applications on the 31st March 2021, with the guidance withdrawn on 1st April.
  • 5th April: The Government announced that it would trial a range of pilot events hosting large audiences at sports matches, theatres and gigs as part of the strategy to get big events back on track in time for Step 4 of the Prime Minister’s Roadmap out of lockdown.
  • 6th April: On Tuesday HM Treasury has announced the launch of the new ‘Recovery Loan Scheme’, that will provide businesses with additional financial support throughout 2021 to mitigate the effects of COVID-19. Businesses can now access loans varying in size from £25,000, up to a maximum of £10 million. The loans will include an 80% Government guarantee and an interest rate cap.

Covid-19 Statistics

Daily Last 7 days Rate per 100k resident population
Positive Cases 3,030 20,056 (-37.3%) 37.3
Deaths 53 216 (-32.5%) 0.3

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 8th April 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. Claims for furlough days in March 2021 must be made by 14 April 2021.

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 scheme was 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 was 31st March 2021, and the guidance was withdrawn on 1 April 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 was 31st March 2021, and the guidance was withdrawn on 1 April 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. The £5 billion of government funding available through the Restart Grants scheme will be delivered by local authorities.

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 launched 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. Businesses can apply for incentive payments for these apprentices from 1 June 2021 to 30 November 2021.

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. The Local Restrictions Support Grants closed to new applications on 31 March 2021 and any business which haven’t received their payment by 30 April 2021 should contact their local council.

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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