This week in Whitehall

Welcome to the second installation of This Week in Whitehall where we give you a summary of what’s happened in politics.

Foreign Policy

On Monday, Foreign Secretary Dominic Raab wanted to reassure people that the government is working around the clock to support, advise and help British travellers get home. Announcing that through ongoing work with other governments around the world 150,000 UK nationals have returned from Spain, 8,500 travellers back from Morocco and around 5,000 UK nationals from China. 

But with airports closing around the world the foreign secretary confirmed that where commercial flights are no longer running, the government will provide necessary financial support for special charter flights to bring UK nationals home. The Foreign Office has designated £75 million to support those flights and airlines to keep costs down and affordable for those seeking to return to the UK.

Testing 

Ongoing pressure on the government for more testing has been present throughout the week. On frontline and mass testing, Duchy of Lancaster Michael Gove said on Tuesday that “we are increasing the number of tests”. It was not until the health secretary returned from self-isolating on Thursday that we got any further information on mass testing, where he announced 100,000 tests per day by the end of April. Hancock outlined his Gordon Brown-style five-pillar plan, to increase testing across England. The five pillars are:

  • Swab testing in Public Health England labs within NHS Hospitals, to find out if you already have the virus.
  • A partnership with universities, research institutes and companies like Amazon and Boots to build a network of new labs and testing sites across the country. 
  • Introducing antibody blood tests. These antibody tests are the ones we heard about last week and will be able to tell whether people have had Covid-19 and are now immune.
  • Surveillance to find out what proportion of the population already have the virus, using an antibody test by PHE. This will determine the infection rate and how the virus is spreading across the country. 
  • Building an “at-scale” diagnostics industry to reach 100,000 tests per day by the end of April if not before. 

Personal Protective Equipment

Although the health secretary provided some answers on testing, even if no set date was provided, the government’s action on PPE was absent. All Hancock alluded to on Thursday was the difficulties the government faces on distributing the PPE to all NHS Trusts and frontline workers.

Universal Credit

On Wednesday we found out that almost a million people have applied for Universal Credit Benefits in the past fortnight, 10 times the normal amount over a two week period. The surge in applications is an indicator of the number of people that have lost their jobs. Despite this, the Institute for Fiscal Studies said many self- employed workers will still slip through the gap and receive no support, while others may be left better off after the crisis. Thus, The Resolution Foundation has urged the chancellor to expand Universal Credit to support more people. 

FCA’s new measures on consumer credit

On Wednesday we found out the FCA’s proposed measures on the consumer credit market:

The FCA has proposed new measures on the consumer credit market. The list of proposed measures can be found below:

  • Set out the FCA’s expectations on firms to offer a temporary payment freeze on loans and credit cards where consumers face difficulties with their finances as a result of coronavirus, for up to three months.
  • Ensure that for customers who have been hit financially by the coronavirus and already have an arranged overdraft on their main personal current account, up to £500 will be charged at zero interest for up to three months.
  • Require firms to make sure that all overdraft customers are no worse off on price when compared to the prices they were charged before the recent overdraft changes came into force.
  • Ensure consumers using any of these temporary measures should not have their credit rating affected because of this.

These measures are now getting backing from across the political spectrum including Economic Secretary to the Treasury, John Glen. 

Update on Covid-19 policies

The Government recently updated guidance on the Small Business Grant Fund (SBGF) and the Retail, Hospitality and Leisure Grant Fund (RHLGF) including eligibility, accessing the funding and a likely date for eligible businesses to receive grant monies.

Local authorities will be the delivery body of the grants with the Central Government fully reimbursing local authorities for the cost of the grant. 

Key points of the schemes:

Recipients cannot receive both SBGF and RHLG on the same property. The grant size for SGBF is £10,000 and for RHGF is £10,000 or £250,000 per property.

Emergency Business Loan Scheme 

The chancellor overhauled his emergency business loan scheme after the Treasury received over 130,000 enquiries, with fewer than 1,000 being approved. This resulted in a raft of changes, outlined below: 

  • Insufficient security is no longer a condition to access the scheme
  • Lenders will not take personal guarantees of any form for facilities below £250,000
  • For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion

VAT Deferral

Following the announcement by the Chancellor on 20 March 2020, HMRC has now released its guidance

If you’re a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to:

  • defer the payment until a later date
  • pay the VAT due as normal

It does not cover payments for VAT MOSS or import VAT.

HMRC will not charge interest or penalties on any amount deferred as a result of the Chancellor’s announcement.

Other ongoings

Furlough workers

A new survey from the British Chambers of Commerce has found almost half of respondents (44%) expect to furlough at least 50% of the workforce. The FT thinks this tremendous take-up threatens a much higher cost to the Treasury than expected when the scheme was unveiled last month. 

Nightingale Hospitals

The London Nightingale Hospital was opened this week by the Prince of Wales via video link. New Nightingale hospitals will also be built at the University of the West of England in Bristol and at the Harrogate Convention center, according to the press note released last night. Others are already in development in Manchester and Birmingham.

Tune in next week for the third installation of This Week in Whitehall.