Mr Sunak has also unveiled support for self-employed workers in the UK. The new scheme will be backdated to March and cover up to 80% of self-employed people’s average profit for the past three years (up to a cap of £2,500), broadly similar to the amount of support offered to employers to furlough rather than layoff staff.
Individuals who made an annual profit of less than £50,000 and make the majority of their income from self-employment will be eligible but will require them to prove that COVID-19 has affected their businesses. Based on the Treasury’s calculations, this will cover around 95% of those who earn most of their income from self-employment (or 3.8mn) and will cost approximately £3bn a month.
“Mr Sunak overhauled the Coronavirus Business Interruption Loan Scheme, scrapping rules that require lenders to ask company owners to guarantee loans up to £250,000 with their own personal property.”
One notable omission is owner-managers of companies who pay themselves mostly through dividends. Mr Sunak stated that this is because it is impossible to distinguish between dividends derived from an individual’s work from those made from passive investments.
Banks have also agreed to give struggling customers a three-month mortgage holiday. In his concluding remarks, the chancellor stated that there would be challenging times ahead and warned that the government would not be able to protect every single job or save every single business.
What about help for public services?
Mr Sunak gave reassurances that the government would give the National Health Service all it needs to deal with the virus. This week the government announced that it was writing off £13.4bn of historic NHS debt, and Covid-19 related policies were front and centre of the Budget,
with Mr Sunak unveiling a £30bn package to combat the coronavirus.
The government has also announced so-called social distancing tactics like some other European countries, along with schools closing for the majority on 20 March. Stricter measures have been put in place, as the UK is now on unofficial lockdown.
What other measures have been taken?
The Bank of England announced it cut its main interest rate
from 0.25% to 0.10% in a unanimous vote. It also announced a step up in the targeted QE total (gilts and corporate bonds) by £200bn to £645bn; most of the additional purchases will be UK government bonds.
The BOE's Monetary Policy Committee also voted unanimously that the central bank should enlarge the Term Funding Scheme aimed mainly at small and mid-sized enterprises that was launched on 11 March, known as the TFSME scheme.