EXTENSION TO MORTGAGE HOLIDAYS
The Financial Conduct Authority (FCA) has announced proposals which will continue support for customers who are struggling to pay their mortgage due to Coronavirus crisis.
The proposal outlines the options Lenders will be required to provide customers coming to an end of a payment holiday, as well as those who are yet to request one. For customers yet to request a payment holiday, the time to apply for one would be extended until 31st October. For those who are still experiencing temporary payment difficulties due to Coronavirus, Lenders should continue to offer support, which could include extending a
payment holiday by a further three months.
Here is what the FCA would expect:
- Customers who can afford to return to full repayment should do so in their best interests – at the end of a payment holiday, firms should contact their customers to find out if they can resume payments and if so, agree a plan on how the missed payments will be repaid.
- Anyone who continues to need help gets help – lenders should continue to support customers who have already had a payment holiday where they need further help. Lenders are expected to engage with their customers and find out what they can repay and, for those who remain in temporary financial difficulty, offer further support. As part of this firms should consider a further three-month payment holiday.
- Extending the time the scheme is available to people who may be impacted at a later date – customers that have not yet had a payment holiday and experiencing financial difficulty will be able to request one until 31st October 2020.
- Keeping a roof over people’s head during a public health crisis – the current ban on repossessions of homes will be continued to 31st October 2020. This will ensure people are able to comply with the Government’s policy to self-isolate if they need to.
- Payment holidays and partial payment holidays offered under this guidance should not have a negative impact on credit files. However, consumers should remember that credit files aren’t the only source of information which Lenders can use to assess creditworthiness.
This guidance would not prevent firms from providing more favourable forms of assistance to the customer, such as reducing or waiving interest.
Firms should consider signposting customers towards sources of debt advice. Debt advice may be helpful for customers coming to the end of payment holidays and may be particularly useful for consumers with pre-existing payment shortfalls or who are likely to be in longer-term financial difficulty.
When implementing this guidance, Lenders should be particularly aware of the needs of their vulnerable customers and consider how they engage with them. For customers who aren’t able to use online services (such as digital channels), Lenders should make it easy for customers to access alternatives.
The FCA may issue additional guidance as the Coronavirus situation develops.
FURLOUGH SCHEME CHANGES
On 20/05 the Chancellor announced an extension of the Coronavirus Job Retention Scheme (CJRS) furlough scheme until at least 31/10. However, my Treasury sources confirm that by the end of this week the Chancellor will announce modifications to the furlough scheme to take effect from 01/08.
These changes have not yet been agreed in Cabinet but there is most likely to be a phased reduction from the current 80% Government subsidy, down by perhaps 5% each month until 31/12. Another option being considered is a single reduction from 80% to 60%, to take effect from 01/08. The intention is to encourage some legally-sanctioned part-time return to work for some people, with employers increasing their financial contribution to salaries whilst still benefiting from the revised CJRS.
We will advise you when the details are confirmed.
PART-TIME WORKERS’ RIGHTS
The Government has updated guidance on part-time workers rights and how employers should act. Part-time workers are protected from being treated less favourably than equivalent full-time workers just because they’re part time. A part-time worker is someone who works fewer hours than a full-time worker. There is no specific number of hours that makes someone full or part-time, but a full-time worker will usually work 35 hours or more
Part-time workers should get the same treatment for:
- pay rates (including sick pay, maternity, paternity, and adoption leave and pay)
- pension opportunities and benefits
- training and career development
- selection for promotion and transfer, or for redundancy
- opportunities for career breaks
Some benefits are applied ‘pro rata’ (in proportion to hours worked). For example, if a fulltime worker gets a £1,000 Christmas bonus, and a part-time worker works half the number of hours, they should get £500.
Overtime pay – part-time workers may not get overtime pay until they’ve worked over the normal hours of a full-time worker.
When employers can treat part-time workers differently
There are some situations when employers do not have to treat part-time workers in the same way as full-time employees. In these situations the employer must be able to show there is a good reason to do so – this is called ‘objective justification’.
For example, an employer may provide health insurance for full-time employees but not part-timers if this can be objectively justified. Their reason may be that the costs involved are disproportionate to the benefits part-timers are entitled to. In this case the employer may come up with an alternative like asking the part-time worker to make a contribution to the extra cost.
If a part-time worker has been treated less favourably
Part-time workers should first discuss this with their employer or trade union representative. They have the right to get a written statement of reasons for the treatment from their employer. The request should be in writing and the employer must write back within 21 days. If the worker is not satisfied that the reason given was objectively justified, they may be able to take a case to an employment tribunal.
SHOPS AND RETAIL RE-OPENING
The Government has announced it will allow a phased re-opening of shops and retail premises, which is planned to start in June. It has issued new guidance for people who work in or run shops, branches, stores or similar environments. Here are two helpful links:
Working safely during coronavirus (COVID-19) in shops and branches
Full PDF version of the guidance. Updated 25 May 2020 to reflect industry feedback and to expand coverage of non-essential retail categories ahead of planned opening.
Staying COVID-19 Secure in 2020
Poster to display in your workplace to show you have followed the guidance. The main document is to help employers, employees and the self-employed in the UK understand how to work safely during the Coronavirus pandemic, keeping as many people as possible 2 metres apart from those they do not live with. We hope it gives you freedom within a practical framework to think about what you need to do to continue, or restart, operations during the pandemic. We understand how important it is that you can work safely and support your employees’ health and wellbeing. We know that many businesses of this type are currently closed for their usual service. We hope this document will help those who are already working because they cannot work from home, as well as help other people think about how to prepare for when they return to work. The Government is clear that workers should not be forced into an unsafe workplace.
‘Shops and branches’ include all retail stores. These include:
- food retailers
- hardware/homeware stores
- fashion shops
- charity shops
- betting shops and arcades
- tailors, dress fitters and fashion designers
- car dealerships
- auction houses
- antique stores
- retail art galleries
- photography studios
- gift shops and retail spaces in theatres, museums, libraries, heritage sites and tourism sites
- mobile phone stores
- indoor and outdoor markets
- craft fairs
- similar types of retail
- bank branches
- post offices
- other open money businesses.
The guidance applies to those currently open and will help those that are currently closed consider what their operations need to look like when they re-open: https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19
PLANS ANNOUNCED FOR LONDON’S COVID-19 RECOVERY
A new London Transition Board will co-ordinate London’s response as it emerges from the lockdown and begins to reopen its economy while controlling the virus.
- The Communities Secretary and London Mayor will be joining forces to look at transition for London out of lockdown into the next phase
- A new London Transition Board will draw on wide range of London expertise to restart the Capital
- A new London Recovery Board will oversee the wider economic and social long-term recovery
The new London Transition Board, co-chaired by the Communities Secretary, Robert Jenrick and the London Mayor will co-ordinate London’s response as it emerges from the lockdown and begins to reopen its economy while controlling the virus.
The programme of work being put in place will be the biggest since the end of the Second World War and will include opportunities for Londoners to be involved in setting priorities and shaping London’s recovery and renewal.
The Board will be made up of senior leaders from across the city and provide strategic direction for the next phase of response and restart, focusing on the key issues which London will face over the coming months, including:
- infection control
- phasing in and out of varying levels of lockdown
- recovery of public services, such as transport
Until the end of the year, the London Transition Board will run in parallel with and complement the establishment of London Recovery Board, chaired and constituted by the Mayor of London and Cllr Peter John, the Chair of London Councils. The Minister for London, Paul Scully, will attend the Recovery Board on behalf of government.
The London Recovery Board will plan and oversee the capital’s wider economic and social long-term recovery, developing a strategy and plan of action to reshape London to be fairer, more equal, greener and more resilient than it was before the crisis. It will also work to create thriving neighbourhoods, with improved wellbeing and access to a strengthened healthcare system.
Long-term Covid-19 recovery planning has been taking place since March. The programme of work put in place will be the biggest since the end of the Second World War, dwarfing the response to the 2008/2009 financial crisis and taking years to deliver.
The work will be carried out in partnership with organisations from across sectors and across the city and will include opportunities for Londoners to be involved in setting priorities and shaping London’s recovery and renewal, as equal partners.
We will update you as these London initiatives develop.
We will issue further advice and guidance Bulletins as the Covid-19 situation develops.
Sir Henry Boyle
1230 hrs 27th May 2020