Azure Coronavirus Government Intervention Update
This week will go down in history. Future generations will look back over the events of 2020 with fascination. With the benefit of hindsight we will be able to see if decisions taken over the last three months since the Coronavirus first showed itself were the right ones.
Rishi Sunak has been Chancellor for less than two months but has been presented with the biggest challenge since the banking crisis of 2008 and arguably, this problem is bigger and harder to get right.
His first big move was the £300bn package announced, which included direct support for some businesses and a huge government backed loan programme to get cash into businesses to keep them alive.
Once we had all got over the gasping at the boldness and enormity of this move, we started to realise that this was not enough. Not by a long way.
And so on Friday, Rishi announced measures that were (as he mentioned several times!) completely without precedent. Amongst other measures, which we will go into, the government pledged to pay the wages of those furloughed by the shutdown of the businesses around the country to combat the spread of the virus.
But immediately, gaps were apparent and it became obvious that despite these two huge moves, more were required. The self employed had been left woefully exposed and we expect more announcements this week to fill these gaps. To not do so would be a disgrace. But the government knows this.
The problem the government has is one of mechanisms. They need to piggyback existing processes and systems for administering the transmission of information and cash. That’s why they gave the business rates grants as local councils can make this happen quickly and easily. The loan programme will be managed by the retail banks and the deal done with insurers to protect those with appropriate policies in the retail and leisure sector will be dealt with by the insurers. Even the payment of wages can be sorted out by HMRC although this will need a new system which won't be ready until the second half of April.
So the lack of intervention for self employed people is not because the government has forgotten or doesn’t intend to do something, but more that it has had to achieve as much as possible as quickly as possible to stop business shedding jobs and causing massive irreparable shocks to the economy. It doesn’t help those people who suddenly have no income and face the prospect of getting by on £94 a week.
More to come from the government and I expect they are working day and night over the weekend to get something done.
Please see our other articles for more details on the measures announced by the government so far.
If you need any help with what moves to make next, or how these measures affect or help you, please do get in touch.