The public health guidance has remained the same as announced on Monday evening. However, schools in Scotland will close by the end of the week and more details will be released tomorrow. We just published a blog from my colleague Nicola Taylor with tips and tricks for working from home whilst caring for three small children: http://gir.tif2005.com/blog/working-at-home-with-children/
In terms of economy and business impact, the Chancellor has announced a significant expansion of the support measures for businesses in the UK. He will make available £330bn of guarantees, equivalent to 15% of UK GDP, and added that the UK Government is prepared to do whatever it takes to protect the economy. This comes on top of the £30bn of support announced previously. Scotland’s Cabinet Secretary for the Economy Fiona Hyslop confirmed this afternoon that she will replicate the UK Government’s actions in full.
Key measures relevant to Scotland’s digital technologies sector are:
- support for liquidity amongst large firms, with a major new scheme being launched by the Bank of England to help them bridge Coronavirus disruption to their cash flows through loans;
- increasing the amount businesses can borrow through the Coronavirus Business Interruption Loan Scheme from £1.2 million to £5 million, and ensuring businesses can access the first 6 months of that finance interest free, as Government will cover the first 6 months of interest payments;
- increasing grants to small businesses eligible for Small Business Rate Relief from £3,000 (initially announced) to £10,000;
Mortgage lenders have agreed they will support customers that are experiencing issues with their finances as a result of Covid-19, including through payment holidays of up to 3 months. Additional support for businesses and individuals paying rents are expected shortly.
For more details on how to benefit from these support measures, please check first Scottish Enterprise’s coronavirus business support website, which keeps on being updated and improved. If you can’t find the right information there, use their helpline at 0300 303 0660 (Mo-Fr, 8.30am to 5.30pm). If you have tax related questions, call HMRC’s dedicated Covid-19 helpline at 0800 015 9559 (Mo-Fr, 8am-8pm and Saturday, 8am-4pm).
Whilst welcoming the additional support announced by the Chancellor, commentators and also the Scottish Government have called for more. So far, the focus has been on loans which can alleviate cashflow problems but more actions to reduce costs for companies will probably be required. Cabinet Secretary Hyslop suggested tax holidays, PAYE breaks, VAT reductions, a suspension of the Apprenticeship Levy as well as more cash grants. Additionally, she asked the UK Government to consider a loosening of the regulatory burden so that companies can focus on business continuity and adaption.
Some economists are suggesting that more income and less tax support will be required. Other countries are already going down this route with France and some Scandinavian countries underwriting parts of company’s payroll costs.
Startups are particularly vulnerable as many of them won’t be eligible for the £10,000 grants for small businesses and lack experience of dealing with major disruptions like this. We will raise these concerns with Scottish and UK Governments and are working on ways in which more experienced entrepreneurs in our sector can support the startup community in these turbulent times.
Notes
UK Gov press conference 17 March
- Promised to do whatever it takes to protect economy, at Budget announcements
- Collective national effort: everyone of us doing all we can ; underpinned by gov interventions for economy
- Gov will give you all the tools you need to get through this
- Ow approaching fast growth part of upwards curve of infections
- Government backed and guaranteed loans: 330bn of
guarantees – any business that needs access to cash can get loan at attractive
terms
- Provide as much capacity as required for ?
- New lending facility to provide low cost, easy access to funding
- Extending business interruption loan scheme: now loans up to 5m with no interest due for first 6 months
- Both ready next week
- Cabinet to identify opportunities to help sectors, including regulatory forebearance
- Gov measures are sufficient to trigger pandemic clauses of insurances
- £3000 cash grants increased to 10,000
- Devolved admins get additional 3bn
- Will work with unions and business groups to develop new forms of support to protect jobs
Fiona Hyslop- 18/03/22
- GDP could shrink by 5% over 3 months period based on economy operating at 80% capacity Impact on public finances because of lower tax receipts
- Gov treating this as economic emergency
- 3 aims:
- Keep companies in business & keep their capacity up so they can recover
- Keep staff in employment with income protection
- Staff need support to self0-isolate and provide care for loved ones
- Immediate focus on those facing collapse
- SG will replicate UK Govs measures in full
- Need agreed economic framework with UK Gov – must think beyond last crisis, this could be bigger shock
- Need to protect capacity until demand returns
through cost reduction (grant support &
- Calling for tax holidays, PAYE breaks, VAT reduction, suspension of Apprenticeship Levy
- Review competition policy
- Safeguard consumers from price hikes
- UK Gov works closely with devolved administrations
- Fair work principles need to be upheld
- Engagement with unions and employers
- 2,200 call to helpline yesterday (17/3)
- Need to look at losen regulatory burden so that they can focus on business continuity & adaption
- Look to share costs across public and private sector in a fair way, with prospects for recovery
- If you foresee financial difficulties in the future, speak to your bank now
- SG will hold meetings with financial services and insurance sector[SM1]
[SM1]Feedback to SG from webinar