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Minister for the Treasury’s statement to Tynwald on coronavirus

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By: Hon Alfred Cannan MHK, Minister for the Treasury

Mr President

I want to thank the Minister for Health and Social Care for his statement.  I am sure that I speak for the whole Court and indeed the Nation when I say to him and the dedicated Doctors, Nurses, Care workers and Community Care workers on the frontline of this health crisis that our thoughts are with them and their families as they apply the full range of their abilities and capabilities to keep us safe.

I want to make it absolutely clear that whatever funding they need to face this challenge they will get.

But there is a growing second front arising as a direct result of this global pandemic and it is an economic and fiscal battle to sustain our economy and jobs throughout the next vital next three months and possibly beyond.

I recognise that there has already been an economic impact that has, at this stage, been most acutely felt in the tourism, leisure and travel sectors.

I also recognise that all businesses are working incredibly hard to ensure their businesses and our economy continue to function and services continue to be provided.  We must act together to keep business working and staff in employment.

I give a commitment that Government will take steps to help protect as much as we can, helping the island’s economy and our businesses to overcome the short term impact of Covid-19.

Today I can announce, subject to Tynwald approval, immediate measures to assist with business cash flow.

Mr President one of the most significant costs businesses have is their staff and therefore I have brought an Order to this Court today that will provide a 3 month holiday for employers National Insurance contributions in the following sectors:

  • Tourist accommodation
  • Catering, entertainment and leisure
  • Travel and tour operators, and
  • Logistics to and from the Island

The effect of this measure is to reduce to nil the rate of class 1 secondary National Insurance contributions.  The full details of these sectors will be provided in a list that will be published in the next few days and laid before Tynwald in the coming weeks.  This list will be kept under constant review and I will keep it under constant review and seek to broaden its scope as required. The full cost of the measure is difficult to quantify but will be in the region of £250,000 a month

This measure will come into operation for the month 12 payment (March payment) that is due to be paid to Treasury by the 19 April.  Should any employer that is covered by this measure have already paid month 12 to the Treasury, then they will be able to apply for a refund of the employer National Insurance contributions they have paid.

In addition to this, a grant of £3,000 for all businesses in the sectors specified earlier will be available, to provide a cash boost.  Details of the application process will be made available on the Department for Enterprise’s website very shortly and we will be making payments as soon as we are able to after that.

I recognise that more substantial support will be required for accommodation providers.  In conjunction with DfE and the industry I am working on a scheme that will provide much needed support to those effected businesses.

In addition if businesses are having difficulty in meeting their statutory obligations such as the payment deadlines for tax, national insurance or VAT or for the submission of returns, they should contact the relevant division as soon as possible.  Both the Assessor of Income Tax and Collector of Customs and Excise will work with businesses, and individuals, on a case by case basis to minimise the pressures that may be being experienced.

Also if individuals or businesses are experiencing difficulties in relation to any payments due to Government, I would encourage them to contact the relevant Government department where matters will be considered sympathetically.

In- line with the response outlined by the Health Minister earlier today, it is absolutely vital that individuals self-isolate if they display symptoms of Covid-19. I do recognise that this will have a short term impact on businesses’ ability to operate and their cashflow. To assist all businesses, in all sectors, who are providing discretionary sick pay to employees self-isolating, I will provide compensation to the employer of £20 per working day in a consecutive period of up to two weeks, per employee in self-isolation. As it stands currently those in self-employment are also able to access the full range of benefits for the duration of this crisis.

These measures will assist business in the short term.   However, it is not just Government that is able to assist in these tough times.  Our banks have announced that they are also providing assistance to businesses with loan repayment holidays and working capital assistance.  I know that businesses are working hard to react to the changes brought about by the virus, but the banking industry is stood ready to provide help and I would encourage everyone to be engaging with their banker.

As far as individuals are concerned, I know this will be a deeply troubling time for them and their families.  Until recently, individuals who cannot work due to sickness or incapacity can only claim Incapacity Benefit from the fourth day of sickness.

I have already signed an Order which will remove, with immediate effect and for a period of 26 weeks, the 3 day waiting period for awards of short-term incapacity benefit. This will ensure those who take the recommended action to protect others by self-isolating are financially supported from day one.

A further order is being brought forward to allow a person to self-certify their incapacity or work for up to 14 days, as opposed to the current 7 days.  This will remove the need for people who self-isolate for more than 7 days and up to 14 days to get a sick note from their GP. I expect to sign this tomorrow and it will be effective immediately. We are also actively considering alternatives to the doctor’s sick note where a person continues to be incapable of work on account of the coronavirus for more than 14 days.

In addition I have directed that:

  • The introduction of new minimum work requirements for employed person’s allowance which were due to have effect from 2 June this year is to be postponed until April next year. Given the current situation with regards to COVID-19, the availability of new jobs or additional work hours is likely to be impacted for a considerable period. There is also a risk to the availability of employment advisors to support people to secure additional work.
  • Lone parents claiming Income Support solely on account of being a lone parent will be able to continue to do so until their youngest child reaches age 12. Until recently, this was due to reduce to age 6 from 2 April 2020. This postponement will apply for 26 weeks.
  • Persons claiming Jobseeker’s Allowance will not be required to attend in person at a Social Security office to claim their benefit. Instead, applications can be submitted by post. New claimants should contact the Jobseeker’s Allowance Team to ask for a claim form to be sent to them.
  • Persons claiming Jobseeker’s Allowance will be temporarily excused from the requirements to ‘sign on’ in person at a social security office, usually once a fortnight. They will continue to be paid their Jobseeker’s Allowance, but they must contact the Jobseeker’s Allowance Team straightaway if their circumstances change, they do any work or they wish to end their claim.

I should also point out that workers who are not incapacitated for work and are not self-isolating, but are prevented from attending work for other reasons and as a result have no earnings, will be able to claim Jobseeker’s Allowance. As for short-term incapacity benefit, we also plan to temporarily remove the 3 waiting days for Jobseeker’s Allowance.

Persons who are concerned about their ability to collect their pension or benefits at the Post Office can nominate someone else to do so on their behalf, or they can opt to have them paid directly into their bank account instead. Anyone wishing to make changes to the way they collect their benefits or is in any way concerned about this should contact Social Security directly.

Social Security officers are actively exploring options for accepting benefit claims via means other than submission on paper-based forms, along with other measures which may become necessary to ensure people can get the help they need in an appropriate manner.

The banking industry is not only offering support to businesses but to individuals as well, with offers of mortgage and loan repayment holidays.  Once again if individuals have financial concerns I recommend they contact their bank as soon as possible. I want to thank the Banks, their Executive Teams and their staff for their offers of support and for the work they are about to embark on.

Finally Mr President, I am asking Tynwald to approve the transfer of £40m from the Operating Balance to the Contingency Fund.  I want to be clear to Tynwald, it is my intention, supported by the Council of Ministers to use powers exercised under the Financial Provisions and Currency Act to undertake such actions as deemed necessary for the protection of the Health and Economy of this Island.  

These initiatives today are our phase one approach. But I must be clear and honest with you all.  These measures may not be enough. £40 million, may not be enough, we may need more and much work continues on further support mechanisms both for business and individuals. I said we will not wait and we will act decisively. We will seek the recall of Tynwald if we need additional measures that require by law Tynwald’s authorisation. I will make a further public announcement regarding a second phase of improved financial measures on Tuesday 24 March.

These are unprecedented times and they call for unprecedented action.  We need self-discipline and social discipline to tackle the direct threat to our health and we need similar qualities to meet the fiscal and economic threat.  

So Mr President I urge those companies and businesses who may come under threat, who may find themselves facing difficult decisions to think outside the box.  Are staff willing to take a pay cut to save their jobs, are any staff willing to take a three month unpaid sabbatical, can offer your services or those of my company in a different way.  If a restaurant can I offer a take way service, if a hotel can I offer businesses hotel rooms for vital staff, can I set up an emergency working facility for staff in quarantine, if a taxi driver can I set up a home delivery service.

Mr President never before will businesses, leaders, entrepreneurs and workers ever have had to think so quickly to find solutions. We will act across Government but do not wait.  If you have ideas then get them out there, if you have problems, tell us, if you need help  - speak to your bank, speak to your advisers and speak to us. And now more than ever I call on the community of this Island to spend local and think local. Spread your money around, go somewhere new, use the butcher, the baker and the candlestick maker. Buy local meat and local produce, buy local bread and creamery butter. Expand your horizons, buy local fish, cook some kippers, stop at the farm shop you have never been to before. Think and act local.

And if you can cope, if you have the financial resources, if you and your business and your family have the financial security please, I urge you, give a space and time to deal with those most in need.

For all of us, for everybody across this Island nation we must do as much as we can to keep people employed and businesses intact. For the next twelve weeks, we must strain every sinew, consider every option and do our best to keep our economy alive.  If we succeed this Island economy will not only survive, it will have the opportunity to thrive.

I know and trust that all of us across Government, Business and the Community will draw on our full range of capabilities as this proud nation rises today do what is right to overcome this deeply challenging Crisis.  I ask Tynwald to support the measures before it today and support the actions of Government.