Due to the Coronavirus, there have been great economical shifts. There have been big changes in the stock market and many businesses around the globe have been left counting their costs.
One of the most important points that the government is focusing on, is keeping the economy stimulated.
In short, if there is not enough money in the economy, currency will begin to decrease in value.
At the moment, there is a focus on ensuring people still have an income. Not having a guaranteed paycheck at the end of each month during this time of uncertainty, could lead to people being unable to reopen businesses after the lock down.
A lack of businesses will mean less taxes are being paid and even less money is being pushed around in the economy.
Another downside of this, is that people will begin to hoard their money. Due to everything being uncertain, it can cause people to panic and start saving their money rather than spending it.
Consequently, this means that money will begin to lose value due to inflation. If there is not enough liquidity in the economy, then the government will have to print more currency at a faster rate. This is because businesses need liquid money in order to maintain a stable cash flow.
To keep everyone motivated to spend their money, governments around the world are putting some new policies in place in this time of panic.
In this blog post, we will be discussing:
Self-Employment Claims
Due to the pandemic, a lot of people who are currently self-employed are struggling to find work.
The British government has put together a furlough scheme allowing businesses to compensate their staff up to 80% of their wages instead of letting them go.
This did leave freelancers concerned that they would be left high and dry, however right now, you can claim if you a self-employed individual if you:
This scheme allows self-employed people to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 a month. It will be available for 3 months, but may be extended if social distancing continues.
Considering a large part of the UK is self-employed or working freelance, these types of grants being put in place encourages more confidence in the economy and for business that would otherwise have collapsed, to keep their (figurative) doors open.
Lots of other countries are doing something very similar.
Authorities in the UAE have recently published new guidance to support all private sector employers against the pandemic.
Currently, many private sector employers in the United Arab Emirates are applying for more flexible working arrangements. This ensures that a business will stay open during this crisis.
Employment & Unemployment Claims
Like many other countries, America is experiencing an alarming rate of unemployment due to the pandemic. The American government is trying to combat this growing problem.
From the end of March, unemployment insurance will be extended by four months. This will widen eligibility and increase benefits, for all of the American population.
The UK government is also putting measurements in place for people who are still currently employed during this pandemic.
This includes paying the wages of employees who are unable to work due to the coronavirus pandemic, but are still employed by a company or business.
At the moment, the government is paying 80% of the salary of staff who are kept on by their current employer. This will cover wages of up to £2,500 a month.
Not only does this prevent employees from losing their jobs but it also allows businesses that are not considered ‘essential’ to operate from home or to continue to keep their doors open after the pandemic has passed.
Stockpiling
Whilst this is not an example of the government putting unemployment schemes in place, it is a good example of authorities driving money into job retention at speed.
Recently, there was a panic surrounding how other countries were handling the outbreak and fear that the UK would go into total lockdown like China and Italy.
This would mean that trips to the shops to buy food would be limited. This was mixed with the added misdirection of the news claiming that there would be shortages of certain food, drinks and other home amenities due to distributors not being able to enter countries.
Prior to lockdown, English people saw supermarket shelves bare of pasta, toilet paper, hand soap and other essential food and household items. Whereas in other countries such as Denmark, people stripped shelves of rye bread and yeast, in Greece, people bought out feta cheese and in Finland, boxed wine seemed to be all the rage.
The Coronavirus has left many people unemployed, which means that claims for Universal Credit have risen to an all-time high.
The UK government increased the standard allowance for Universal Credit. At the moment, it has been increased by 1.7 per cent. Which will be raising the monthly total by over £5 for some individuals claiming UC or nearly £65 a year for others.
This was the first cash increase of Universal Credit since 2015.
Coronavirus has put small businesses and their employees particularly, at very high risk of folding and layoffs respectively. To combat the drastic impact of the pandemic, it has been left to the government to keep the economy alive. Furlough schemes, free-lance support and Universal Credit Update are just the tip of the iceberg on what will be needed to keep the economy alive in the months to come.
