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Statement by Minister for the Treasury on COVID-19 - 30 March 2020

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Good Afternoon

I know that many of you are bewildered, afraid and worried both about your health and also increasingly about your financial future and your jobs.

Since I spoke to many of you a week ago today, events have happened at a rapid speed and we have, to all intents and purposes, closed down large parts of our domestic economy.

We have seen the devastation that Coronavirus can leave behind if it remains unchecked. Our actions have been driven by an overarching desire to save lives.

By staying at home and maintaining social distancing you will all play your role in suppressing the virus.

But there is another equally important element to this – by staying at home now you are also helping to protect jobs and the economy.

In short, the quicker now that we can suppress the virus, the quicker that we can bring about a controlled return to work and the quicker that we can get our economy functioning again.

Over the last week we have, step by step, moved to remove uncertainty and de-risk the chances of Coronavirus spreading on construction sites and in retail shops.

We have moved to remove uncertainty for those supplying additional domestic services such as painters and decorators.  We have removed uncertainty for gardeners and those in horticulture.

As we close down parts of the economy we must recognise that we need to take further action to support those who, through no fault of their own, are facing an abrupt cessation of their income.

On Friday Tynwald formally approved a number of financial assistance measures, including the Covid 19 Welfare Benefit formally known as the Manx Earnings Replacement Allowance or MERA for short paying £200 per week to those who have lost their job or unable to earn as a result of the virus and the Covid 19 Salary Support Scheme paying £280 per week per full time equivalent employee.

I understand the situation that many business are in and the desperation to receive this support, however please be patient, we are working as hard as we can to get process up and running.  Whilst we are do this, I urge businesses to reach out to their banks to assist with immediate cashflow issues.

I am sure you will all understand that in delivering these substantial measures we have to balance the need to help businesses and individuals with their immediate needs against the long term sustainability of our finances. 

One consequence of this was the exclusion of certain sectors where we considered that the impact of the economic situation has not had the immediate impact felt elsewhere. 

A number of smaller domestic businesses that fall into these excluded categories have written to me describing circumstances that they feel means they should be included within the scope of the support and I can sympathise with their position.

Under the Salary Support Scheme the Chief Financial Officer has the power to amend the scheme to cover any business if he considers it to be in the best interests of the Island’s economy. 

I have asked him to set a process whereby small and medium sized businesses who currently fall outside the scope of the scheme and who fulfil certain criteria, may apply for special consideration.  I expect this process to be in place within a matter of days.

I announced last week the Coronavirus Business Support Scheme was providing businesses and the self-employed in the most affected sectors with an immediate £3k grant to assist with their costs and their fall in income.  Following recent announcements I have extended that scheme to Education, Construction and horticulture.

We are processing applications for the Coronavirus Business Support Scheme as quickly as we can.  The first payments have been made and many more will be made next week.

I can also announce today that Government will be bringing forward two further support packages in the coming days.  A scheme to preserve strategic capacity in the tourist accommodation sector and one to provide additional support for the fishing industry.  More details on these schemes will be announced this week.

Even with all these measures, we will not save every business and every job, but we do have safety nets in place. 

The COVID 19 Benefit or MERA is available to provide support, as are the existing welfare payments schemes. 

The MERA will be available from 6 April, those who require assistance immediately have access to our existing welfare system.  People will be able to apply for the MERA online or by phone.

To provide much needed flexibility during this time, with the appropriate security measures, Treasury has introduced processes to allow the acceptance of instructions to pay a person’s pension or benefits into the bank, or to an appointee, over the telephone as well.

Extra staff have been allocated to this area to answer calls and emails. However, we are experiencing high levels of demand so please be patient on the phones, we will answer your call, but it will take longer than normal. 

Extending this support from the National Insurance Fund has caused us to reflect and consider the appropriateness of National Insurance Contributions and the variance in rates that is applied across our society. 

I intend, if at all possible, to speed up a review of our National Insurance Fund in order to ensure that fairness and equality is put back at the heart of the contributions regime.

Of course some sectors and businesses must remain open by a physical presence on site and some can remain open by undertaking home working. 

  • all those involved in the food chain we need you to keep working, you are on the frontline and we salute you,
  • our manufacturers are now turning their hand to vital parts to support the efforts against coronavirus – we are proud of you and we need you to keep working,
  • our banks and financial institutions – many of you are working from home – thank you, we need you to keep doing that, and
  • in our digital economy many of you are also keeping global businesses running from your home offices – please keep going.

In general terms therefore, I remain satisfied that the overall measures that we have brought forward are now sufficient to provide the broad safety net that the economy needs to get through this.

There are four clear layers of direct support; the Salary Support Scheme, the Business Interruption Grant, that can also be accessed by the self-employed, the MERA, for which anyone in any sector who finds themselves out of work can apply for and finally, if all else fails, you will be caught by the existing welfare system.

Last week I told you that no-one will be evicted from their home during the period of this crisis.  I can now tell you that further support for residents will come from the seven Island banks that offer personal mortgages.

Isle of Man Bank, Santander International, HSBC, Barclays, Lloyds, Nedbank Private Wealth International and Cayman National Bank have all agreed to provide a mortgage repayment holiday to existing customers who have fallen into financial difficulty as a result of the coronavirus pandemic.

I want to thank them as I do every company and organisation that is providing support to their customers as this difficult time.

In light of these measures I have over the last week thought long and hard about whether it is appropriate for the Government and local authorities to issue the Rates demands for this year and I have concluded that although many are struggling, there are those in the community who are in a position to continue to meet their liabilities. We must keep some money coming through the system otherwise our local authorities and indeed our national finances will come under even more pressure and therefore the rates bill will be issued as normal but will also contain a letter explicitly stating that if you feel unable to pay your rates you may consider that payment is deferred without explanation until further notice.

We will issue further clarification on unpaid rates later this year but I ask you, if you can pay your rates early, please do so and if you can afford to pay them as you would normally, please do so.

In fact I make that call to everyone on the island, to all businesses and their employees.  To get through this crisis we must all play our part, act together and act responsibly. 

If your business can still make its taxation and statutory payments then make them, if your business is in good health and does not need financial support, please allow room for those who do, if you don’t need to access the financial support packages please allow us to get to those who need it most. 

I know that even with all that is in place, some of you are facing tremendous fear about your future job security and livelihoods that will be causing you anxiety and worry - but we must keep our nerve our focus and our wits about us. The Government is doing everything it reasonably can, but both corporate and personal self-discipline and self-responsibility is vital. 

I have been heartened by the actions that have been taken across the private sector and the community to respond to this crisis. 

Community support to those who need it is being delivered in a variety of ways either directly one to one or through groups coalescing through social media.

  • I know of a food business working flat out to get food parcels out to frontline workers and the over 70s,
  • a construction firm who offered its whole vehicle fleet for national service
  • a high net worth resident who despatched a helicopter to retrieve a vital piece of medical equipment from East Midlands Airport.
  • And the significant number of offers of support have been provided directly to Government

This morning some of our leading businesses and executives came together to launch the Manx Solidarity Fund to help people in need and assist businesses get back on their feet.  I thank them for their initiative. The Public Sector is coming together, the private sector is coming together and the community is coming together.

But let me recap; this Island is now looking to suppress this virus to protect our health and save lives.  The quicker this is done, the better and intrinsically linked to this is our economic health and our future job security.  We are in a fight to save lives but we are also in a fight to protect our economy and save jobs. I am asking you to join that fight – please now focus on staying at home to suppress the virus, protect lives and protect the economy.