Chancellor unveils further unprecedented economic support
In the latest wave of action to protect the economy against COVID-19: a wage guarantee scheme and further mitigating measures for business.
On Friday 20 March the Chancellor of Exchequer announced a wave of new measures to support workers, business and the economy through the COVID-19 pandemic.
For business and employees:
- A furloughed worker scheme, providing grants for employers who retain their staff, covering up to 80% of their wages for at least three months – the scheme will be extended if necessary. This covers all UK employers with a PAYE scheme, including charities
- Deferring VAT payments for March, April and May, and giving businesses until the end of the financial year to pay those bills
- Extending the interest free period for the Business Interruption Loan Scheme to twelve months, following the announcement on 17 March that the maximum amount that could be borrowed would increase from £1.2 million to £5 million
For self-employed people:
- Suspending the minimum income floor for 12 months so all self-employed people can access Universal Credit in full at the same rate as statutory sick pay
- Deferring self-assessment payments for July, August and September until the end of the financial year
To help people stay in their homes:
- Increasing housing benefit and Universal Credit so that the Local Housing Allowance will cover at least 30 per cent of market rents in local areas
- Following discussions with industry, mortgage lenders will offer mortgage holidays of 3 months for those in difficulty due to coronavirus
Further information on these support packages can be found here, including instructions on how to access these new measures and information on the relevant authority responsible for delivery.
The Government has also updated its guidance on social distancing which can be found here.
For many businesses and employees in the tech sector these announcements will be welcome as the full scale of the economic challenge presented by COVID-19 presents itself.
Over 80% of Digital Sector workers as measured by DCMS are employed, and therefore likely covered by the pay guarantee scheme. Employers will be able to designate affected employees as ‘furloughed workers’. HMRC will then be able to reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
Whilst this is welcome, around 270,000 workers in the digital sector are self-employed, as measured by DCMS, equating to 17.6% of the total workforce in the sector. The largest share of these workers are in computer programming, consulting, and related activities where there were around 136,000 workers who were self-employed in 2018.
Workers in this sector will likely be able to work remotely, however these individuals are particularly exposed to a drop-in business activity with clients/customers postponing or cancelling projects deemed to be not business-critical. The package announced by the Chancellor for the self-employed fails to measure up to the robust package for employees and could cause lasting damage to this crucial segment of the workforce.
The figures above provided by DCMS, also do not take account of those who work for digital platforms as casual workers, so called gig economy workers. A study by BEIS estimated in 2018 that around 2.8 million UK adults had worked in the gig economy in the last 12 months, with some relying on this work for the whole incomes.
A survey, conducted for the RSA, found only 16% of all workers agree statutory sick pay, equivalent to the £95 offered so far, would meet their basic needs. Unless this is addressed head-on those working in the gig economy may feel that their only choice is to continue working perhaps in contravention of Government advice.
The scale of the economic impact of COVID-19 is enormous and the Government will need to continue to look for mechanisms to support those in self-employment or those who work in the gig economy. techUK’s survey of members on the impacts of COVID-19 have shown that sector has responded quickly to the early stages of this crisis, with many workers able to continue their roles at home.
However there remain large parts of the tech sector workforce such as the self-employed and those in the gig-economy who will require further support packages to be announced in the coming days.
Latest News from
Emerging tech in the energy and water sectors - Campaign Week - Call for Contributions!28/09/2021 16:25:00
Join our week of insights from the energy and water sectors on the application of emerging technologies - 12 - 15 October
Ministry of Justice: New expert group to increase confidence and standards in e-signatures28/09/2021 11:25:00
The Ministry of Justice has established an Industry Working Group of experts to improve standards, reliability and security in electronic signatures and other means of legally executing documents, and to address best practice in this area.
How service providers can profitably ride the data wave and improve customer experience27/09/2021 16:38:00
The speed of data growth is rapid and shows no sign of abating. According to recent studies, data creation will grow to more than 180 zettabytes by 2025.
What now for UK data protection laws?27/09/2021 11:25:00
Guest Blog: Peter Church, TMT Counsel, Linklaters discusses the UK Government's proposals to reform UK data protection laws.
Defence and Security SME Forum Survey Results24/09/2021 16:25:00
Over the summer, techUK’s Defence and Security SME Forum asked the SME community within techUK's membership to take part in a survey examining engagement with the UK Ministry of Defence (MOD).
UK National AI Strategy24/09/2021 11:25:00
Summary of major announcements from the UK Government's National AI Strategy.
Inclusive Economy Partnership (IEP) and Dell Technologies launch the Digital Inclusion Impact Group23/09/2021 15:15:00
techUK is a part of a group of industry, government, and civil society leaders to tackle digital exclusion in the UK.
Tackling greenwashing: CMA published new guidance on green claims21/09/2021 14:15:00
Companies have until the New Year to address potentially misleading claims