Government to pay up to 80 per cent of wages for employees not working
Chancellor Rishi Sunak has announced an “unprecedented” range of economic measures to protect jobs.
Employers who cannot pay staff will be able to keep them on as the UK government has promised to underwrite 80 per cent of wages up to a maximum of £2500 per month.
That initial period of investment will last for three months but Mr Sunak said it would continue further if needed.
He also announced:
- The coronavirus business interruption loan scheme will be interest free for 12 months, not six months as previously planned
- Those loans will now be available starting on Monday
- Deferring the next quarter of VAT
- Increasing the universal credit standard allowance for the next 12 months by £1000 a year
- Increasing the working tax credit basic element for for the next 12 month
- The next self assessment payments will be deferred to January 2021
Mr Sunak said: “Combined with our previous announcements on public services and business support our planned economic response will be one of the most comprehensive in the world.
“This will require a collective national effort with a role for everyone to play – people, businesses, government. It's on all of us.
“The first part of our plan is to protect people's jobs. This week the government has taken unprecedented steps to fight the coronavirus.
We have closed schools, told people to stay at home to prevent the spread of infection.
"We are now closing shops, restaurants, bars – those steps are necessary to save lives, but we don't do this lightly we know these measures will have a significant economic impact.
“I can announce that for the first time in our history the government is going to step in and help to pay people's wages by setting up a new coronavirus job retention scheme.
“Any employer in the country – small or large, charitable or non-profit – will be eligible for the scheme.
"Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll rather than being laid off.
“Government grants will cover 80 per cent of the salary of retained workers up to a total of £2500 a month. That's just above the median income and of course employers can top-up salaries further if they choose to.
“That means workers in any part of the UK can retain their job even if their employer cannot afford to pay them and be paid at least 80 per cent of their salaries.
"The job retention scheme will cover the cost of wages and will be backdated to March 1 and will be open initially for at least three months.”