Last week I announced a package of measures which were brought about to combat what was effectively the overnight collapse of business revenue to certain sectors of our economy.
Those measures were not enough. As this crisis has escalated it has become increasingly clear that we need to do more, much more to help everyone across this Island nation in our fight against this lethal virus.
All of us have a role to play - Government, Businesses and Individuals, all of us are impacted. Every action that we take is critical, every decision that we make vital and my role is now to equip you all, as much as I can, with the financial tools to take the right decisions and to provide the safety net in your hour of need.
In order to do that I have taken the considered decision to commit substantial sums of money from our reserves in order to bring forward the most comprehensive package of support I reasonably can.
The measures being introduced today, the support that is being offered, the nature and range of proposals on offer are quite simply unprecedented.
But I am confident that what we are doing will not only provide the framework to keep businesses alive and provide reassurance to individuals in their hour of need, but that it also links appropriately with the overall strategic approach now being adopted to defeat the virus on the ground.
But I must be straight with you. The measures that I am about to announce, although substantial, will not protect every business, save every job.
Government alone cannot win this fight. As an Island nation we have limited physical and economic resources but what we do have is speed of thought and action, flexibility and an ingrained proven determination to succeed.
So that is why, in order for us to overcome the economic and fiscal challenge this virus presents; each and every one of us has a responsibility.
And this responsibility means that those of you that have done well over the years, that have built success and security, that have successful profitable businesses or have built substantial wealth that will enable you to sustain short term cash flow problems, now is the time for you to stand by your Island and your staff.
For those of you facing more severe challenges:
- Now is the time to work with your staff to find solutions and options to get through this in the next three months
- For the workers, now is the time for you to support your company, consider carefully the value of retaining your jobs and to engage with your colleagues
Everyone must contribute and engage in what is now national effort to keep jobs open and businesses alive so that when this darkness turns to sunlight, and it will, this nation and this economy will be ready to bounce back.
Turning now to the specific measures that I intend to put in place to support businesses and individuals.
Firstly in order to help businesses retain their staff, a wage support package will be provided that will, for up to 12 weeks, provide businesses with a contribution of £280 per week for every full time equivalent staff member that they are paying.
This figure is equivalent to 75% of last year’s living wage calculation.
This direct wage support will be available to all sectors with the exception of specific businesses in technology, financial services and e-gaming, where we consider that the effects of the crisis are not yet being felt so severely.
This support will be backdated to cover March’s payroll.
It will provide those businesses who have been materially affected with an opportunity to consider how they might find the ways and means to retain and pay staff, even if this means on reduced rates and even if they are working from home.
I will keep the time period for this support and the scope of the scheme under review and I will amend it as necessary.
Details of the scheme and all the others I am going to announce today will be available shortly.
However I recognise that businesses do need cash now. The fastest route to achieving this is through your existing relationship with your bank.
I can announce that we have agreed to work with the Island banks to create a new Loan Guarantee Scheme.
Through this scheme Government will support and underwrite 80% of new lending to viable business with certain criteria applied.
For those businesses demonstrating previous good management and profitable activity, this should provide a solid base to source additional funds to meet immediate working capital pressures.
As a further measure to help support cash flow, I am providing businesses across the economy with the option of deferring any VAT payments due between now and the end of June 2020.
No interest or penalties will apply to deferrals of VAT payments due during this period.
We will also work on a case by case basis to defer Tax and National Insurance payments for any business finding themselves in difficulty at this time.
These measures will give where applicable immediate support to businesses by keeping cash at their disposal during this extraordinary time of uncertainty.
I have already announced that any business in affected sectors can currently apply for a £3k grant. Today I am extending this to anyone who is self-employed in affected sectors and extending the provision to include smaller retailers.
In addition I will extend the scheme to employers in qualifying sectors with only one employee.
It is vital that we maintain our strategically important industries and assets so that we are well positioned to recover after this event. I am therefore setting up a fund to assist businesses to maintain their critical assets through this period even if they cannot trade. This will be aimed at the visitor accommodation sector, making up to £5m available for this purpose and I will consider the inclusion of other strategic industries in future.
There are numerous examples of businesses demonstrating their resilience and changing their operating models. I applaud this fighting spirit and to assist with this I am amending the terms of the Financial Assistance Scheme to provide an initial £3.5m and government will offer match funding for the necessary infrastructure needed.
Of course these measures may not protect every job.
I am therefore announcing that as from today we are creating a new welfare benefit for those suffering job loss or those unable to work as a result of COVID-19.
The new COVID-19 benefit will pay out to anyone on our Island who finds themselves in these circumstances at a rate of £200 per week. The benefit will be in operation from 6 April.
In addition to this I will ensure that measures are introduced under the Emergency Powers Act to ensure that no one will be evicted from either their homes or their business premises for non-payment over this period.
I am pleased to confirm that we have been speaking to the banks and I expect them to support our population through a range of measures including Mortgage / Loan repayment holidays for those who have been affected and seek assistance.
I have also been in discussion with the key utility providers and the MUA, Manx Telecom, and Manx Gas have all indicated a willingness to consider support for anyone affected, and have committed that no-one will be cut off as a result for the next 3 months.
I cannot emphasise to you enough now that this is a whole Island effort.
Last week In Tynwald I paid tribute to those on the frontline, our Doctors, Nurses and Healthcare workers and now increasingly our Policemen and Civil Defence.
I committed to them they would get the financial resources they need without question or delay to keep us safe and protect lives.
Now it is the turn of all of us across this nation to play our part and I know that across the community huge numbers of you are engaged and willing.
Today I have brought forward £100m of direct support that we need to join this fight across the economy.
Now we must think act and work together as an island nation to overcome this unseen enemy.
It will be hard, there will be sacrifices necessary, but the sooner and the quicker we can do it, the sooner and quicker we can get our economy and our nation back on its feet.