How are Britons faring since coronavirus hit the economy?

Official figures show that the UK economy contracted by 2% in March, as the lockdown brought many industries screeching to a halt. Households have been hit by job losses and furloughing, and forced to adjust to working from home and balancing schooling with all of life’s other demands. The Guardian has revisited some Britons who we last spoke to on the day the chancellor, Rishi Sunak, delivered the 2020 budget, before lockdown, to see how they have fared since.

Income subsidies

Direct cash grants for self-employed people, worth 80% of average profits, up to £2,500 a month. There are similar wage subsidies for employees.

Loan guarantees for business

Government to back £330bn of loans to support businesses through a Bank of England scheme for big firms. There are loans of up to £5m with no interest for six months for smaller companies.

Business rates

Taxes levied on commercial premises will be abolished this year for all retailers, leisure outlets and hospitality sector firms.

Cash grants

Britain’s smallest 700,000 businesses eligible for cash grants of £10,000. Small retailers, leisure and hospitality firms can get bigger grants of £25,000.

Benefits

Government to increase value of universal credit and tax credits by £1,000 a year, as well as widening eligibility for these benefits.

Sick pay

Statutory sick pay to be made available from day one, rather than day four, of absence from work, although ministers have been criticised for not increasing the level of sick pay above £94.25 a week. Small firms can claim for state refunds on sick pay bills.

Other

Local authorities to get a £500m hardship fund to provide people with council tax payment relief.

Mortgage and rental holidays available for up to three months.

High earner

The south London plumber Ian Fisher has remained busy throughout the lockdown, dealing with domestic boilers that need repairing or installing, irrespective of coronavirus.

Financially it has had almost no impact on him, he says, with plumbers designated as key workers who have largely carried on through the crisis. But he worries about the health effects of having to work, at times, closely with colleagues.

“They were good at getting us sanitiser and gloves, and I would mostly have worn a mask anyway. We’re all kitted out,” says Fisher, who receives most of his work through Pimlico Plumbers. “I’ve not yet had to go in to anyone’s house who I know has coronavirus. But I’ve found everyone is very good at keeping a social distance; they open the door and then stand back and then go into another room.

“What is a bit more difficult is that you have to work at times in close proximity with another guy. There is no way really of getting around that. If it’s an installation, as I’m doing today, it’s a two-man job. But what we’ve done is to make sure we buddy up with just one other person. I’ve seen more of that guy than I’ve seen of my family.”

Fisher has a wife and three daughters who he says have been ultra-cautious throughout the crisis. “I almost get fumigated when I get home in the evening. My wife and my daughters have not been out of the house whatsoever. They are extremely cautious. Luckily we have a good-sized garden.”

Fisher’s wife trained as a school teacher, so home schooling for their eight-, nine- and 11-year-olds has been less onerous than for others. He reckons it has been toughest on his eldest daughter, who will now go on to secondary school missing her last two terms at primary.

There have been a few crumbs of comfort; he’s felt good standing by Pimlico’s pledge to not charge for emergency work for NHS frontline workers. Meanwhile, the roads are “massively empty” compared with before the crisis, even if numbers have picked up a bit in recent weeks. “I’m probably saving around half an hour or three quarters an hour a day just because there’s no traffic. And the traffic wardens seem to be OK about us too.” Patrick Collinson

Young person

Jess Popkin spent her 21st birthday in lockdown, like millions of other young people, unable to celebrate the usual milestones of life. But she has – financially at least – survived the crisis better than many of her peers. She remains on full pay on the Brightstart apprenticeship scheme at Deloitte, adding that while the money is “hardly piling up” she is inevitably spending less on socialising and is able to save more instead.

Popkin shares her Cardiff apartment with three friends, so the lack of a conventional social life has been bearable. “I live in a house share with three other girls and we’re all good friends. They have all stayed in work – one an accountant like me, another who works in a call centre, and another who is a care home nurse. The three of us, apart from the nurse, have all switched to working from home. And fortunately there’s not a coronavirus case yet in her care home.”

Some of her accountancy exams have been postponed, but she has been assured the timetable has been accelerated and she will qualify on the date she was expecting. “Of course it’s a great shame we can’t go out like we used to, but this won’t go on forever and things will return to how they used to be,” she says.

Her sister lives in the US and the rest of the family are in Surrey. “I was already used to living away from home, so it’s not that much of a change for me. If anything I think we are a little more in touch with each other than we used to be.”

The transition to home working has been relatively stress-free, she says, with her time split between a desk in her room and working from the kitchen. “We’ve got very good tech and everything works from home. Plus we have a good new thing at work, called the Fifteen Fifteen Fun. It’s at 15.15 every working day, you all get together for a short while on video, someone might do a cooking thing or a quiz. It’s a good way to collaborate and keep in touch.” PC

Middle-income family

When the country closed down, Cris Cohen, 44, in Stoke-on-Trent, Staffordshire, lost five months of bookings overnight, with two-thirds of his household income slashed.

His nascent business, Feasted, a gastronomy and educational dining service, fell through the cracks so he was not able to access any of the support schemes. “At first it was so tough, emotionally, because of the unknowns,” he says.

Luckily, Cohen’s wife, Heli, continued to work part-time as a teacher while he stayed at home with the two young children. Some money eventually came in from his educational consultancy work.

“I just feel very fortunate that I could continue to work, the extra time has given me a chance to really shape my business up.”

He has relished the free time to plan ahead and move his dining lessons online, where his following has grown considerably. Cohen doesn’t have any overheads or employees so was extremely relieved he did not have to furlough anyone.

He has to find time to work on his business in the early hours of the morning and late afternoon in between homeschooling the children. “Everyone being at home all the time has been a massive challenge,” he says. “It’s like having a couple of employees in the house, but more unruly.”

Cohen was initially encouraged by the measures introduced in the budget, but now feels “it is long forgotten”. He hopes to qualify for the micro business grant for small businesses of £1,000.

Even though the pair are not spending money on childcare or on diesel for their camper van, they are financially worse off now by 25%. “What we’re saving is offset by what we’re losing,” Cohen says.

In spite of the pinch, he remains optimistic: “I’m so pleased I’m where I am because I’ve got flexibility and freedom. I’m confident business will pick up.

“It’s a great time to address how you live your life or run your business.” Lucy Mansfield

Single parent

For Rachel Alake, 32, from Chigwell, Essex, the closure of schools during the lockdown has been the biggest challenge since the chancellor unveiled his budget on 11 March. And that is not just because of the exhausting hours spent trying to juggle homeschooling a 12- and eight-year-old while also caring for a toddler. She says the situation has also put a strain on her finances.

“When the children were at school, my son would take his packed lunch and my daughter would get the free school meals. But now they are eating three meals at home, food depletes a lot faster and I am spending £60 to £80 a week more on shopping – sometimes £100 more if I am buying baby supplies.

“I’m also trying to avoid the long queues at supermarkets so I go to corner shops instead. Because they don’t have many deals, it works out more costly.”

Alake’s income, however, has not changed. As well as receiving child benefits of £48.68 a week and a weekly child tax credit payment of £116, she is awarded £130 in housing benefit a week to cover the rent of her home. She quit her part-time job as a practice manager at a physiotherapy clinic after the birth of her youngest child in October 2018 and was planning to return to paid employment this year. With the outlook for the job market looking bleak, she doubts she will be working again soon.

She wishes the government had considered giving non-working parents such as herself more financial support to help pay for the extra costs of looking after children while schools are shut, even if it was as simple as vouchers to spend on groceries. Matthew Jenkin

Business owner

Like many business owners, John Woodward, from Lichfield in Staffordshire, has been hit hard by the coronavirus crisis. The 64-year-old is the founder of the childcare provider Busy Bees and says it has been facing difficulties as a result of the government order to close schools and nurseries to all children except those with key worker parents.

As a high earner with an income of about £150,000 a year and with more than 30 years of experience building businesses, Woodward says he is better able to weather this storm than a new startup owner. He has, for example, been able to use £300,000 of his own personal funds to keep the business afloat.

He says measures announced by the chancellor, Rishi Sunak, to support businesses during the crisis – such as the rates cut and delay on VAT payments – have been helpful. But he does not believe endless grants and bailouts are the answer.

“We shouldn’t become reliant on this government support because it is not going to be around forever and you have got to be able to stand up for yourselves.

“For me personally, I think I will be worse off for a bit and we will have to cope with that. I have been there before though, for example in 2008. At the moment it’s not so bad, because debt is relatively cheap, but we can’t guarantee that. So you have to be cautious. That’s why creating a robust business and ensuring you have a contingency plan in place is a good thing.”

Woodward believes the government is doing the right thing by focusing financial support on smaller businesses and those on lower incomes. He claims the chancellor offered enough for high earners in the budget, such as the pension tax change aimed at doctors, and thinks more needs to be done to protect those really struggling in these times, now and in the future.

“I do worry that there is not a real safety net for people who are struggling more and we should all as a country make sure there is help in place for them.” MJ

Pensioner

Evelyn Morgan returned to her home in Kendal, Cumbria, from a trip to Ireland on Friday 13 March, expecting to return to work as a carer for people with disabilities on the Monday. After becoming ill with flu-like symptoms on the Sunday, she feared the worst and told her client she was self-isolating for a week.

As events unfolded, the 70-year-old was told by her GP to stay at home and not return to work. But despite her age placing her at greater risk should she contract Covid-19, she was informed she could return to her job if she felt “comfortable”.

The mother of three and grandmother of eight felt conflicted, but knew the right thing to do was to stay at home and stay safe. But because she is paid per hour on a shift by shift basis, this meant losing a major source of income: £502.69 a month.

She has been receiving about £400 a month in statutory sick pay – paid from day one as the government promised for anyone self-isolating – but she knows her annual entitlement will end soon and then she will only be left with her state pension (now £600 a month) to live on.

Morgan feels frustrated there is not more to support older key workers who cannot be furloughed and are not eligible for any other benefits.

“I thought, I’m in the vulnerable category and must stay at home, so will get furloughed in order to do that – but no, it seems I can’t. I feel like there are a lot of people like me who are falling through the cracks on this,” she says.

Thankfully, she’s found herself saving money on luxuries such as eating out, going to the cinema or meeting friends for a coffee. Morgan also says she has enjoyed spending more time at home and believes it could be a stepping stone to retirement.

“It’s really nice now not having to get up and struggle to get across town to work,” she says. “Although I don’t want to do nothing. I do massage and Alexander technique and these are things that I love doing and would like to continue with instead. It might be a way of weaning myself off paid work and instead pursuing my own interests and passions a bit more.” MJ

Read More

Related Posts

Leave a comment