UK Update (June 2020): UK Government policy announcements

Changes to lockdown measures, effective 4 July: The UKG announced that from 4th of July, pubs, restaurants and other such businesses will be allowed to reopen, provided they adhere to social distancing rules.

Extension of Coronavirus Job Retention Scheme: In June and July, there will be no changes to the scheme. In August, the taxpayer contribution will remain at 80%. Employers will be asked to pay National Insurance and employee pension contributions. In September, the taxpayer contribution will reduce to 70%, with employers asked to pay 10% of staff wages alongside National Insurance employer contributions and pension contributions. In October, the taxpayer contribution will reduce to 60%, with employers asked to pay 20% of wages, alongside the other contributions above. Employers will be able to bring back staff on part-time hours, with the government providing support for the hours not worked on a pro-rata basis.
Implications for industry:

  • Recognising the potential for large scale unemployment, the UKG continues to support companies.
  • Industry members should continue to think about how to reintroduce furloughed staff into the workplace, with the ability to keep some staff on part time furlough and part time work.
  • Member should also prepare to pay for some of the costs for their furloughed workers, on a gradual basis, until October.

Support for the self-employed scheme extended: Chancellor Rishi Sunak announced that the scheme will be extended, with applications open in August for a 2nd and final grant. This will work in the same way as the 1st grant, paid in a single lump sum covering 3 months’ worth of average monthly profits, to a value of 70% of profits, up to a total of £6,570.
Implications for industry:

  • The continuation of scheme will provide a higher degree of resilience amongst independent technology contractors.
  • Unlike employees on the furlough scheme, individuals who receive the support may continue to work, reducing the impact on member companies

14 Day Quarantine: The UKG announced that anyone arriving into the UK  must quarantine themselves for 14 days and provide their address to authorities for random inspection. Government may introduce a ‘traffic light system’ for countries, where arrivals from ‘green light’ countries will not face any quarantine restrictions.
Implications for industry:

  • It is unlikely that India, due to its ongoing high rates of infection will be a country prioritised in any ‘air bridge’ negotiations. Therefore, member companies will be especially affected by the self-quarantine measure. Members should prepare for this scenario when planning out the movement of workers from and to the UK.

Brexit & trade: The transition period (UK exiting EU) will not be extended beyond 31st December 2020. Free trade agreement (FTA) talks have not progressed recently, as the UK is unwilling to accept legally binding “level playing field” commitments on EU standards as a prerequisite for any FTA.
Implications for industry:

  • From 1st Jan 2021 the UK will no longer be bound by any regulations of the EU.
  • Whilst it is possible that a trade agreement is reached, it is highly unlikely given time window. A small, barebones agreement could be signed.
  • NASSCOM will continue to share with the UK government the large role Indian companies and workers have on the UK economy and keep highlighting their contributions.

Immigration: The new immigration point based system is expected to role out from January 2021.  Our industry most frequently uses the Tier II (ICT) visa system, and there are a number of areas members requested further clarity on.  For eg how Tier II (ICT) visas will sit within the new Points Based Immigration System,  information on how the Immigration Skills Charge is being utilised by the government, definition of a ‘job offer’, parameters for assessing the criteria of “speaks English at required level”,

Skills & Apprenticeships: Chancellor Rishi Sunak is likely to lay the road map for the current £3bn of funding for the National Skills Fund. The government has been suggested to expand the types of training which qualify under the apprenticeship levy. Given the growing pressure from business representatives, trade bodies and think tanks to reform the Apprenticeship Levy and for the government to invest more into the National Skills Fund, there is an opportunity for NASSCOM to be vocal about the role it has in driving the UK’s skills base and engage with stakeholders around the levy review. Last year NASSCOM in partnership with techUK published a white paper for recommendation on streamlining the apprenticeship levy.

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