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Coronavirus: Government to pay up to 80% of workers' wages Coronavirus: Government to pay up to 80% of workers' wages
(32 minutes later)
The government is to pay 80% of wages for employees unable to work due to the coronavirus pandemic, up to £2,500 a month, the chancellor has announced.The government is to pay 80% of wages for employees unable to work due to the coronavirus pandemic, up to £2,500 a month, the chancellor has announced.
Chancellor Rishi Sunak said the "unprecedented" measures were part of plans to protect people's jobs.Chancellor Rishi Sunak said the "unprecedented" measures were part of plans to protect people's jobs.
Firms have warned the virus could see them collapse, wiping out thousands of jobs, as life in the UK is put on hold.Firms have warned the virus could see them collapse, wiping out thousands of jobs, as life in the UK is put on hold.
Mr Sunak said closing pubs and restaurants would have a "significant impact" on businesses.Mr Sunak said closing pubs and restaurants would have a "significant impact" on businesses.
The chancellor's wage package is the latest in a string of government moves aimed at easing the burden on businesses and their employees. It is understood that the wage subsidy will apply to firms where bosses have already had to lay off workers due to the coronavirus, as long they are brought back into the workforce and instead granted a leave of absence.
"I know that people are worried about losing their jobs, about not being able to pay the rent or mortgage, about not having enough set by for food and bills," he said. The chancellor said the move would mean workers should be able to keep their jobs, even if their employer could not afford to pay them.
"I know that some people in the last few days have already lost their jobs. To all those at home right now, anxious about the days ahead, I say this: you will not face this alone." The wages cover will be backdated to the start of March and last for three months, but Mr Sunak said he would extend the scheme for longer "if necessary".
There would be "no limit" on the funding available to pay people's wages, he added.
The chancellor promised the first grants from the scheme would be paid "within weeks".
'Not alone'
The government has faced huge pressure to intervene to support workers to prevent mass unemployment as anti-virus measures have seen many firms' revenues evaporate almost overnight.The government has faced huge pressure to intervene to support workers to prevent mass unemployment as anti-virus measures have seen many firms' revenues evaporate almost overnight.
The wage package is the latest in a string of government moves aimed at easing the burden on businesses and their employees.
"I know that people are worried about losing their jobs, about not being able to pay the rent or mortgage, about not having enough set by for food and bills... to all those at home right now, anxious about the days ahead, I say this: you will not face this alone," he said.
'Stand behind workers''Stand behind workers'
The chancellor said the announcement was part of a "great national effort to protect jobs." The chancellor also urged employers to stand by their workers during the coronavirus crisis.
He also appealed to employers to stand by their workers during the coronavirus crisis. "I know it's incredibly difficult out there.
"I know it's incredibly difficult out there. We in government are doing everything we can to support you," he said. "The government is doing its best to stand behind you and I'm asking you to do your best to stand behind our workers," he said.
"The government is doing its best to stand behind you and I'm asking you to do your best to stand behind our workers." This move is an incredible intervention for any British government, let alone a Conservative one, but proportionate to the size of the terrible, but temporary, economic impact that could follow the coronavirus shutdowns.
This is a colossal intervention from the government - as the chancellor said, unprecedented in the UK. In theory, it should save hundreds of thousands of jobs. Perhaps more. Employers have to accept that the government is doing something they would have never imagined a UK government to do.
It reflects how concerned the government is about the economic impact this crisis could have - and is having already. At 80% cent of wages up to £2,500 a month it is a scheme more generous than some of the high welfare Scandinavian countries. It instantly transforms the social safety net of this nation.
It's worth remembering this is the third big intervention from government in recent days. This crisis has changed all the rules completely. It shows that the Treasury does believe that the very sharp plunge in the size of the economy can be followed by a bounceback - but not if millions of people are scarred by unemployment. Economics shows that these can have long lasting impact.
The chancellor was given the room for this partly by the Bank of England's biggest ever announcement of purchasing government debt.
There are risks if this pandemic lasts much longer than three months. But the risks of not acting were much greater.
Now it requires employers to hold their nerve until the payments begin at the end of next month. And for the banks to help that process.