The immediate issue confronting the fishing industry, as the covid-19 virus crisis takes grip of the economy, are the gaps in the otherwise very significant financial support measures announced by the Government.
The fishing sector has its unique contours, which means that generalised support measures only fit where they touch.
Grants that are available to businesses closed down in hospitality sector, do not extend to the boats that are equally affected downstream, as markets for fish and shellfish disappear
Many self-employed share fishermen will be supported by the measures announced for the self-employed, but a considerable number at the bottom and top of the range will lose out because of the way that their past earnings have been recorded – and July, when the funds become available, is a long way away
There is a desperate need for clear guidance and support in making applications
COVID 19 – UK GOVERNMENT PROPOSALS
- CJRS (Coronavirus Job Retention scheme)
- 80% wage paid to furlough workers up to value of £2,500 p.m. until end May, possibly longer.
- Covid 19 Corporate Finance facility
- Designed to provide financial assistance on short term liabilities for large companies.
- Assistance for Self Employed
- Provides 80% of average salary up to £2.5kpm for Tax registered self-employed. Payments unlikely before June.
- Coronavirus Business Interruption loan scheme
- Designed to provide access to bank loans, Government underwriting 80% . Available to small and medium size businesses only.
- UK Export Finance (UKEF)
- Tools include Export Working Capital Scheme, Export Insurance and Direct Lending Facility.
- £20bn Government grants
- Grants restricted to SMEs and to larger companies in most vulnerable sectors (hospitality, retail and leisure).
- 1 year 100% rate relief
- Applies only to hospitality, retail and leisure properties.
- HMRC -time to pay scheme
- Allows deferment of tax payments. Agreed on case by case basis.
- Bank of England reduced interest rate
- Bank rate now set at 0.1%
- Potential to reduce interest on liabilities.
- Vat deferral from 20 March to 30 June 2020
- Business will not be required to make VAT payments during this period.
- Extension of time to file reports
- 3 month extension to deadline for filing of company reports.
- 3-month Mortgage/ Rent holiday, including commercial properties
- Temporary benefit to workers/companies.
- Classification of food sector workers as “key” sector
- Key workers school aged children will have continued access to schools.
- Statutory Sick Pay relief allowing SMEs to reclaim sick pay payments to staff
- Applicable only to SMEs.
- Increase in Working Tax Credit allowance
- Workers currently able to claim working tax credit will see weekly increase of around £20 per week.
Fishing Businesses
But the biggest and most obvious gap in support is for fishing businesses of all sizes who face ongoing costs – harbour dues, insurance costs, equipment rentals etc. with no, or dramatically reduced earnings to cover them. There is a real risk of business failure, threatening the aim of keeping fishing businesses intact, so that they can recover and rebuild when this crisis is over.
In our twice weekly (online) meetings with Defra ministers and officials, the NFFO has been pressing the case for a bespoke scheme to fill this gap. It is our understanding that work is under way on the design of a support package by weighing options for different types of scheme and assessing where other support measures fall short. Treasury approval will be required but the Chancellor’s commitment to do what it takes, gives hope that support for what is regarded as a unique and iconic sector will be forthcoming.
We have argued for a twin track approach:
Tie-up aid for those vessels where their markets have completely disappeared, or where continuing to operate wouldn’t cover costs
Top-up aid, for those vessels where there is a continuing, albeit depleted, market to ensure that operations and supply chains can continue
The UK has left the EU but has paid into the EU budgets for 2020 and is subject to all EU rules until the end of December. Close attention is being payed, therefore, to moves in Brussels to change the state aid rules to allow temporary cessation aid in the current extreme circumstances.
Regulatory Easement and Other Support Measures
Towards the end of last week Defra circulated a long list of potential additional measures which had been suggested to the department. These ranged from the vital, relevant and workable to the opportunistic and potentially harmful. Over two conference calls involving NFFO representatives from all sectors and parts of the coast, and numerous emails across the weekend, the Federation put together a response which separated the wheat from the chaff and was submitted to Defra by the deadline on Monday.
Above all, the Federation argued for a robust procedure to ensure that those measure adopted are the ones that do good, rather than harm. A simple filter is required to quickly but thoroughly assess each proposal:
1. Is the measure justified by evidence and proportionate?
2. What would the effects be, including effects on markets?
3. Who would be positively and negatively affected?
4. Will the medium and longer-term impacts outweigh any short-term benefits?
Summary
As the current health emergency continues, the NFFO along with other representative bodies in the industry, are pressing for an aid package that would fill the gaps in the Government’s current support measures. The most obvious of these is support for fishing businesses to allow then to recover when markets recovers. A list of other “regulatory easement” measures is being assessed to identify those that would provide maximum benefit.
See the NFFO for updates: