Millions of pounds have been paid out by the government in support for businesses and individuals in the wake of the Covid crisis.

And Treasury Minister Alfred Cannan said there has been a huge influx in claims for welfare benefits with 1,400 people now on Job Seekers’ Allowance, an increase of some 250% since February.

He told a press briefing that Treasury would seek Tynwald permission to make £250m of borrowing available in the short and medium term to deal with the pandemic, and its impact on government revenue and expenditure.

Mr Cannan said that ’significant progress’ had been made with the support schemes put in place and thousands of people were now benefiting from payments.

He said support schemes had been widened, backlogs cleared and processing times improved.

More than £6.4m has been paid out so far to small businesses and the self-employed through the business support scheme, with the £3,000 payment received by 2,141 firms and individuals, with hundreds more processed by the end of this week.

Wages of thousands of employees are supported by the salary support scheme which covers the March, April and May payroll and aims to keep jobs open and businesses running during the health emergency.

Salary support

Mr Cannan said Treasury expected to pay out £7m of salary support, at a maximum of £1,120 per employee per month, for March wages alone, with £3.8m already distributed to 569 businesses with 4,713 employees and with a further 405 applications to be processed this week.

Tynwald this week approved an extension to the salary support scheme so that it includes companies with just one employee. This will cost an extra £5.3m.

Mr Cannan said £11.8m of quarterly VAT income and £12.4m of income tax revenue had been deferred.

The Treasury Minister said MERA, the Manx Earnings Replacement Allowance, has been paid to 1,667 individuals and £4m of the benefit was expected to be paid out over the 12 weeks of the scheme.

MERA was introduced from April 6 to provide a set income of £200 per week to individuals who had been made redundant, temporarily laid off or lost their self-employed work as a result of the Covid crisis. It is paid two weeks in arrears direct to customers’ bank accounts.

Claims

Mr Cannan announced at the press briefing that MERA will continue to be paid for a further 14 days from the date a person returns to work, while they await their first wage packet. He said social security was receiving 20 to 30 claims a day for Job Seekers’ Allowance. Claims are being processed in about five working days.

Mr Cannan said attention was now turning to how support schemes could be extended and he will bring an update to this year’s Budget to the July Tynwald.

He said Treasury was looking at a ’wide range of options’ given Covid’s impact on public finances but suggested cutting government expenditure at a time of potentially going into recession could make the situation worse.