Coronavirus is having a growing impact on all aspects of life in the UK.
To help businesses prepare their contingency plans, the CBI hosted a conference call with the Department for Business, Energy and Industrial Strategy (BEIS) Permanent Secretary, Alex Chisholm, and the UK’s Chief Scientific Adviser, Sir Patrick Vallance.
During the conference, businesses were briefed on the government’s response to date and the steps firms can take to protect their employees, their supply chain, and the operations in the months ahead.
Key takeaways for business: what is the UK government doing?
- Centring its approach on scientific advice and guidance
- Actively keeping the response under review and prioritising measures of greatest impact and least disruption so far
- Conducting daily COBRA meetings to reassess its approach and determine any additional interventions that might be required
- Expecting the coronavirus outbreak to reach its peak in the next three to four weeks, but its impact is likely to be significant for at least 12 weeks after this.
What support have policymakers provided?
- Eligibility for Statutory Sick Pay (SSP): the scope of SSP was widened in the 2020 Budget and temporarily extended to cover individuals who are unable to work, as well as people caring for those within the same household
- Medical Evidence for SSP: the Chancellor announced a temporarily alternative to the fit note in the coming weeks, which can be used for the duration of the coronavirus outbreak
- Support for those ineligible for SSP:for those individuals not eligible for SSP, the government announced a new style Employment and Support Allowance, and changes to Universal Credit
- Hardship Fund:the government will provide Local Authorities in England with £500m of new grant funding to support economically vulnerable people and households in their local area.
- Support for small businessesand employers to cope with the extra costs of paying coronavirus related SSP by refunding eligible SSP costs
- Business rates reliefs for small businesseswith the government announcing an increase of the retail discount to 100% for 2020-21
- Small business grant fundingof £2.2bn for local authorities in England
- Time to Pay: a dedicated COVID-19 helpline has been set up to help those in need
- Coronavirus Business Interruption Loan Scheme: the Chancellor also announced a new, temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank to support businesses to access bank lending and overdrafts.
For the economy:
- Bank of England base rate reduction: The Bank of England’s Monetary Policy Committee voted unanimously to cut interests rates back to a record low of 0.25% on Wednesday 11 March
- New Term Funding Scheme with additional incentives to boost lending to SMEs: Provides funding to financial institutions for the next year (of at least 5% of participants’ stock of real economy lending), at or very close to Bank rate. The scheme is funded through issuance of central bank reserves (i.e. ‘printing money’) and is designed to ensure the reduction in the base rate passes through as quickly as possible
- Reduction in the countercyclical capital buffer rate for banks to 0%: The buffer is expected to remain at 0% for the next year, so any rise wouldn’t take place until March 2022 at the earliest.
How businesses can prepare
- Given the pace at which events are developing, both Alex Chisholm and Sir Patrick Vallance encouraged businesses to regularly check the government’s guidance, so that firms are fully up-to-date
- Alongside this, Alex Chisholm encouraged businesses to:
- Develop contingency plans if they haven’t already
- Establish Continuity plans
- Reprioritise where possible
- Build-up liquidity
The CBI is committed to providing the business community with support to manage the impact of coronavirus, feeding back businesses insight and experience direct to the policymakers informing the government’s response to the crisis.
For more best practice advice please see the CBI’s FAQs.
To feed in your experience and questions you’d like the CBI to ask the UK government, please contact the CBI policy team.