Government to cover 80% of wages for jobs to coronavirus crisis

Government to cover 80% of wages for jobs to coronavirus crisis
The new economic measures are in addition to the business rates being abolished for the next financial year.
// Government to cover 80% of wages up to a total of £2500-a-month to save jobs during coronavirus crisis
// The new Coronavirus Job Retention Scheme is available for any employer in the country
// The next quarter of VAT payments from businesses have also been deferred, saving them £30bn

The government is to cover 80 per cent of the wages of workers up to a total of £2500-a-month under unprecedented intervention in a bid to save jobs during the coronavirus crisis.

Chancellor Rishi Sunak yesterday conceded that people had already lost their jobs because of the pandemic, but he unveiled a series of measures aimed at averting an employment catastrophe.

A Coronavirus Job Retention Scheme has been set up, available for any employer in the country, covering small or large businesses or companies, charities or non-profit organisations.


“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,” Sunak said during a press conference last night.

“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 salary.”

The scheme will cover the cost of wages backdated to March 1 and will be open initially for at least three months, with the Chancellor pledging to extend for longer if necessary.

“I am placing no limit on the amount of funding available for the scheme,” Sunak said.

“We will pay grants to support as many jobs as necessary.

“To meet our commitment to that effort, I am today announcing a combination of measures unprecedented for a government of this nation.”

Government to cover 80% of wages for jobs to coronavirus crisis
Chancellor Rishi Sunak has announced new measures to help save jobs. (Image:

The Chancellor said HMRC was working around the clock to get the scheme up and running and he expected the first grants to be paid within weeks, adding: “We’re aiming to get it done before the end of April.”

The government is launching a major national advertising campaign in the next few days to communicate the available support for businesses and people.

Sunak also announced that the Coronavirus Business Interruption Loan Scheme will now be interest-free for a year rather than six months as previously planned, and will be available from Monday.

The next quarter of VAT payments from businesses have also been deferred.

“That means no business will pay any from now until the end of June, and you will have until the end of the financial year to repay those bills,” he said.

Sunak said this was a direct injection of £30 billion of cash to employers, on top of business rates being abolished altogether this financial year for firms in hospitality, retail and leisure, and cash grants of £25,000 for small business properties.

The Chancellor said further measures will be spelt out next week to ensure that larger and medium-sized companies can also access the credit they need.

The retail industry in particular has suffered from the coronavirus crisis, with high street and shopping centre footfall plummeting dramatically as Brits are advised to stay home and practice social distancing in order to combat the rapid spread of the virus.

Many retailers have also taken the extraordinary measure of temporarily shutting their stores without the government mandating a lockdown like in neighbouring European countries, with TK Maxx, Clarks, Ikea, Sweaty Betty, Selfridges, Fenwick and the Arcadia Group retail empire leading the way.

However, while most retailers are suffering, grocers are doing exceptionally well due to a wave of panic-buying.

In an appeal to businesses, the Chancellor said: “Please look very carefully at that support before making decisions to lay people off.

“We are starting a great national effort to protect jobs, but the truth is we are already seeing job losses, and there may be more to come.

“I cannot promise you that no one will face hardship in the weeks ahead.”

Unions and leading business groups welcomed the measures.

Government to cover 80% of wages for jobs to coronavirus crisis
UK retail has been hammered by the coronavirus crisis, with footfall in particular plummeting. (Image: PA)

Unite leader Len McCluskey described it as “historic, bold and very much necessary”.

“This is the package of measures that trade unions like Unite have been pressing for as the most effective way to stave off mass hardship and the conditions for a depression,” he said.

“We recognise that these are huge decisions for any government, and especially for a Conservative government, but they have listened to the calls for action and have acted appropriately.

“Rishi Sunak’s wage support measures are a historic first for this country, but are bold and very much necessary.

“The key to any wage support programme is that it needs to be simple, straightforward and above all fast. This is the only way to put money into the pockets of the millions who see their livelihoods hanging by a thread.

“People who were only days ago in secure work are now worried sick about putting food in light of the coronavirus pandemic.

“The Chancellor has done the right thing and we look forward to working further with him in the coming days to get this money into the hands of those most in need.”

TUC general secretary Frances O’Grady said the announcement was a “breakthrough”.

“The Chancellor has shown real leadership. We’re glad he has listened to unions and taken vital steps to support working families,” she said.

“Large-scale wage subsidies are the best way to boost household finances and keep businesses running, and they’ll help our economy bounce back after this crisis.

“Employers across the economy can now be confident that they will be able to pay their wage bills. They must urgently reassure their staff that their jobs and livelihoods are safe.”

Other union leaders warned that workers had already lost their jobs, and others will suffer hardship, even on 80 per cent of their wages.

Paddy Lillis, general secretary of the shopworkers’ union Usdaw, said: “There are many workers, particularly in retail, who are contracted for fairly few hours each week, but regularly work many more to make a weekly wage they can live on.

“These short-hours contract workers rely on this regular additional money, so for their income to be drastically reduced to 80 per cent of contract pay will put them in real hardship.”

Mike Clancy, general secretary of Prospect, said: “The government has finally acted to secure incomes during the pandemic and we welcome the steps they have taken on universal credit, tax delays and income protection for employees.

“However, this is far from the ‘whatever it takes’ approach the Chancellor promised and his plan still contains gaping holes which could sink many family finances and ultimately the economy.

“This is too late for many of our members from flight engineers to cinema staff who have already been let go.

“The Chancellor must make it clear that these workers should be rehired with their incomes secured by government for the duration of the crisis. They should not pay the price of the government dragging its feet.

“There is still no real protection for freelance, self-employed and contract workers who seem not to be covered by the income protection scheme and are being left to struggle through the inadequate benefits system.”


BRC chief executive Helen Dickinson said “this extraordinary economic package from the Chancellor packs a punch”.

“He has not flinched from taking essential action to support jobs and underpin consumer confidence. He has offered urgent action to help firms operate now and in the immediate future,” she said.

“The VAT deferral is a vital lifeline for thousands of firms and millions of jobs in UK retail. Hardworking staff across the retail industry should benefit from the Coronavirus Job Retention Scheme, which will guarantee wages and help keep people in jobs. But it is essential that both are delivered promptly and effectively.”

“However, the challenge to communities, shops, jobs and livelihoods remains all to real.

“The government has shown itself to be both bold and flexible in its handling of this unfolding crisis. This approach will be vital in the coming months as further actions may well become essential to the survival of businesses and jobs around the country.”

CBI director general Dame Carolyn Fairbairn said: “This is a landmark package of measures for business, people and jobs.

“The Chancellor’s offer of substantial payroll support, fast access to cash and tax deferral will support the livelihoods of millions. Firms and employees will respond with relief and determination.

“It marks the start of the UK’s economic fightback – an unparalleled joint effort by enterprise and government to help our country emerge from this crisis with the minimum possible damage. An important day for our country.”

British Chambers of Commerce director general Dr Adam Marshall said: “The Chancellor has given businesses desperately needed breathing room at this critical moment.

“The deferral of VAT payments keeps money in the pockets of businesses so that they can pay their people and suppliers, and the commitment to cover wages of those unable to work will allow firms to retain jobs if they are forced to reduce their operations.”

Federation of Small Businesses chairman Mike Cherry said: “The closure of thousands of small businesses on our high streets will threaten futures.

“It’s critical that the cash grants being made available to those in the retail, hospitality and leisure sectors reach them as swiftly as possible.”

Jace Tyrrell, chief executive of New West End Company which represents 600 retailers and businesses across London’s West End, said: “The offer to meet the majority of the wages of laid-off employees, together with the deferral of VAT, will ease the minds of those working hard to protect their cashflow and their livelihoods.

“Today’s unprecedented intervention is a significant step in minimising the impact of Covid-19 on the West End’s world-class workforce and will do much to aid a swift recovery once this pandemic comes to an end.”

with PA Wires

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  1. Can you tell me what’s to happen to people that have to self isolate having bad health, having no child care and schools are off so can’t work, I have bad Asthma and I am very worried about this situation, I am told I will only receive sick pay. My Daughter in law is pregnant she has been told the same she will only receive sick pay.
    Can you please shed some light on this


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