How UK government could support people as coronavirus spreads | World news

Pressure is mounting on the government to provide emergency financial support for people, and renters in particular, after the chancellor promised to provide £350bn in assistance for businesses as the coronavirus outbreak spreads.

Rishi Sunak said he would take further steps, promising to do “whatever it takes” to shore up confidence in the British economy, and that he was holding talks with business and unions to develop new forms of employment support. Here are some key questions:

I have a privately rented flat and I’ve already lost my job. What could the government do to help me?

The government is offering mortgage payment holidays that will benefit homeowners, but tenants, most of whom have no savings, also need urgent help if they lose their job.

Likely short-term solutions could be much faster access to improved housing benefits, now wrapped into universal credit. It can take five weeks before benefits are paid out. They are also disqualified from housing benefits if they have savings over £16,000.


Current benefit levels may have to be temporarily increased so that tenants are able to pay their rent in full. A single unemployed person over 25 is currently eligible for £323 a month or about £73 a week basic benefit. They also receive help with their rent although in most cases they won’t get the full amount that they pay their landlord, says the advice group Turn2Us. This is because the amount of rent payable to claimants is set locally, and varies according to the local housing allowance.

The campaign group Generation Rent is calling for a temporary halt to all section 21 “no fault” evictions and section 8 evictions for rent arrears. It wants the five-week wait for housing benefit removed, and for rents to be frozen for a year.

Council tax will be another issue. The government may be looking at ways local authorities can delay demands for payment, or suspend it for a short-term period.

I am a council tenant, or rent from a housing association. Will I be supported?

Housing associations have already promised not to evict any tenant because of coronavirus, and are calling on the government to urgently strengthen the welfare system so tenants can get help quickly.

Kate Henderson, the chief executive of the National Housing Federation, said: “No one should be evicted because of the coronavirus. We are confident that no housing association will do this, and want anyone affected by the outbreak to be reassured they will not be evicted.

“We urge the government to further strengthen the welfare system to ensure that everyone who needs it can quickly get help if their income drops,” she added.

I’m a buy-to-let landlord and my tenant has stopped paying. What help might I get?

There are 2.6 million buy-to-let landlords in the UK, but their mortgages are not part of the “payment holiday” measures introduced by the banks. If there is widespread non-payment of rent by tenants losing their jobs, landlords are likely to default on their loans and possibly be repossessed, and the tenants evicted.

The Residential Landlords Association wants landlords to be given the same access to payment holidays as conventional mortgage holders.

Some but by no means all landlords will have bought insurance which includes rental guarantees. Direct Line, for example, has a deal that promises to “provide cover for any unpaid rent if you have to repossess your property. If your tenants can’t pay, we will.” Quite how that will work in this crisis is unclear – especially as the landlord can only claim on the policy if they have issued a section 21 eviction notice.

I can work, but I might be off sick for some time, or my company is reducing the hours I can work or putting me on unpaid leave. What sort of things could be put in place for me?

Most companies offer sick pay schemes as part of their employee benefits, with 60% going above and beyond the statutory minimum set by the government, according to the the Chartered Institute of Personnel and Development(CIPD). Support from the government to firms, including offering small companies compensation for their sick-pay bills, could help people in this position. The government has also asked firms to relax their rules on providing evidence of sickness. But there are fears for those with inadequate sick pay from their job, the self-employed and gig economy workers.

Employers must pay statutory sick pay worth £94.25 a week to employees, including agency workers. Workers need to earn £118 a week to qualify. The prime minister has shortened the period for the payment of statutory sick pay from day four of illness to day one, as a result of the coronavirus outbreak.


There are mounting calls to increase the level of sick pay. At a little under 20% of the average weekly income, statutory sick pay in the UK is much lower than elsewhere in Europe.

Growing numbers of companies are laying off staff temporarily on unpaid leave, or reducing the hours available to workers. Unions are calling for the government to pay wage subsidies, as used in countries such as Germany, Denmark and Sweden to help individuals and families make ends meet. Denmark is offering to pay workers 75% of their salaries.

According to research from Close Brothers Asset Management, supporting just half of Britain’s wage bill would cost the government about £40bn a month. “This is the sort of protection that might be required to ensure that when we come out the other side, consumer demand returns to pre-crisis levels and the economy isn’t damaged beyond repair,” said Robert Alster, the head of investment management at the firm.

I’m self-employed. Can I get sick pay?

About 6 million people in Britain are self-employed or are contract workers, making up about 15% of the overall workforce. Some of these people will be eligible for sick pay, although 2 million workers do not meet the thresholds.

The CIPD says there is a strong case for eligibility for statutory sick pay to be temporarily expanded to help the self-employed.

I have lost my job or have no work coming in. Will the government provide more support than usual?

Out-of-work benefits are worth less than sick pay, while cuts imposed in the past decade of austerity have reduced the level of support.

The government made changes at the budget to expand eligibility for universal credit, while employment and support allowance – the benefit for those with health conditions – will be made available from day one rather than eight.

However, there are demands for the government to go further and to provide grants instead of loans to new universal credit claimants, who need to wait five weeks until their first payment comes through.


Why don’t they just send us all cheques?

In the US, the Trump administration is looking at sending cheques worth at least $1,000 (£915) directly to American citizens, in a form of “helicopter money” to boost the economy.

Britain may lack a mechanism to easily make such payments. Andy King, a member of the Office for Budget Responsibility, told MPs at a hearing of the Treasury committee on Monday that the government considered such a policy during the 2008 financial crisis, but lacked the mechanism to make the payments. The government paying people’s utility bills or council tax could be easier.

Paul Donovan, the chief economist of the Swiss bank UBS, said the support might not be the best use of taxpayers’ money. “A $1,000 cheque buys lots of toilet rolls. In a lockdown, it does not save jobs at a bar or cinema. Cash for consumers focuses on phase two – supporting the bounceback.”


Source: https://www.theguardian.com/world/2020/mar/18/how-uk-government-could-support-people-as-coronavirus-spreads

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