This week in Whitehall

The week commencing 6th April marks the third week of the country in lockdown. Sadly it was the week we had the biggest day-on-day rise for deaths due to coronavirus and with Boris Johnson in the ICU, the direction of the government has been a little uncertain.

For the third instalment of This Week in Whitehall, we give you an overview of general ongoing, new economic support packages, and Covid-19 policies.

The de facto Prime Minister

On Sunday we found out that Prime Minister Boris Johnson was admitted to hospital to undergo further tests. Whilst Boris Johnson is still out of action as Prime Minister, Secretary of State For Foreign Affairs Dominic Raab finds himself thrust into the spotlight as he becomes Britains de facto prime minister. 

With no written constitution and no official deputy leader, Raab’s powers are uncertain. The Guardian spoke to former civil service chief Bob Kerslake, who says if the prime minister remains unable to lead for some time, questions will be raised about whether Raab has the authority to continue and says the Cabinet may choose to intervene. Kerslake says “if the prime minister doesn’t recover quickly, the Cabinet would take a view on who would be prime minister, but if the PM was unable to continue, the Conservative Party may have to choose a new leader.

Exit strategy  

Talks of an exit strategy have been ongoing all week. A cross-government unit has been set up in Downing Street to try and establish a way out of lockdown, but no plans have been announced yet. On Tuesday, Imperial College London’s Professor Neil Ferguson has been quoted saying “No country has an answer yet [for an exit strategy]. There’s very intense research going on as to how we actually get out of this, there are a number of ideas in play but they will certainly reply on scaled-up testing.” With the antibody tests so far failing, it looks like we’re back to square one for an exit strategy. 

Conversations ongoing regarding the reopening of schools, with young people to be considered the first to break the lockdown, the decision will be made after the Easter Break. 

It has been suggested that those between 20 and 30 years of age return to work to begin to support the economy and our return to normalisation from a working perspective.

CJRS

Last Friday’s update by the Government on CJRS has confirmed that HMRC are not expecting to have their claims portal ready until the end of April. 

The latest guidance does emphasise again that the CJRS is there to help those businesses that have been severely affected by Covid-19, but it is open to all employers who have furloughed employees to make a claim. Employers must remember to discuss with their staff the intention to furlough and make any changes to the employment contract by agreement; legal advice should be sought on the process.

The guidance now makes specific mention of eligible individuals who are not employees but are paid under PAYE and that they can be furloughed. This includes:

  • Office holders (including company directors)
  • Salaried members of Limited Liability Partnerships
  • Agency workers (including umbrella companies) and limb (b)n workers.

The Government will now not block furloughed employees from taking part in additional work in sectors of high labour demand. The note from BEIS is that the opportunity is based on existing employment contracts, not going as far as certain sectors would like to streamline the process. 

Government guidance is as follows: “If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough.

For any employer that takes on a new employee, the new employer should ensure they complete the starter checklist form correctly. If the employee is furloughed from another employment, they should complete Statement C.”

On Wednesday it was revealed that Chancellor Rishi Sunak’s subsidised wage scheme may cost UK taxpayers between £30 – £40 billion over three months, three times the initial estimates.

CBILS

CBILS has shown an uptick in acceptance rates with the value increasing to over £450mn across 2,500 SMEs. This is still behind certain European cousins, Switzerland in particular. Rishi is using fighting talk with a “whatever it takes” narrative in support of SMEs and keeping them afloat during this time.  

Banks are scrambling to retrain staff to increase their acceptance rates alongside the relaxation in eligibility criteria as described historically. Feedback from the market is that some are still being pushed to high-cost commercial loans over the government-backed scheme. 

The Coronavirus Business Loan Scheme is facing problems, with figures showing hardly any firms have been supported by the new government-backed loans. City AM suggests just 2,022 loans have been made to SMEs through the scheme, translating to just 0.65% approval rate.

Support package for charities  

At Thursday night’s Downing Street press conference Rishi Sunak announced a support package for charities. The chancellor has faced mounting pressure from charities across the country who are set to lose the majority of their income from cancelled events. As a caveat Sunak begins by stating there are 170,000 charities in the country and they cannot match every penny of funding they have received this year.

The chancellor announces funding of £750 million for the charity sector with £350 going to small local charities and £360 million directly to charities providing essential services to vulnerable people. Although this package seems generous, The Guardian reports that the charity sector has been hit by £4bn in losses and many staff layoffs of which the £750m won’t even scratch the surface. 

Tune in next week for the fourth instalment of This week in Whitehall

Note: All information was correct from midday Thursday.