Rishi Sunak: Govt to pay two-thirds of wages for businesses closed due to Covid-19

9 October 2020, 15:00 | Updated: 9 October 2020, 15:34

Rachael Kennedy

By Rachael Kennedy

Staff in pubs, restaurants and other businesses can have up to two-thirds of their wages supplemented by the government if their companies are forced to close under new restrictions, the chancellor has announced.

Rishi Sunak, who unveiled the expansion to the Job Support Scheme on Friday, said he hoped the plan would be "reassurance and a safety net" for people across the UK as we head into a "difficult winter".

He said any businesses legally required to close because of coronavirus measures would receive grants to cover staff wages - up to a maximum of £2,100 a month.

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Such grants, which launch under the scheme on 1 November, will be open for application only for employees who are unable to work for at least seven consecutive days.

It will run for six months in total and will be subject to review in January.

Meanwhile, employers will not be expected to contribute to the wages, but will still be asked to cover national insurance and pension contributions.

The chancellor has unveiled a new scheme to help support workers affected by the pandemic
The chancellor has unveiled a new scheme to help support workers affected by the pandemic. Picture: PA

In a statement, Mr Sunak said: "Throughout this crisis my priority has always been to protect jobs so today I'm announcing an expansion of our Jobs Support Scheme, specifically to protect those jobs of people who work in businesses who may be asked to close.

"If that happens those workers will receive two thirds of their wages for the time that they're unable to go to work.

"I hope this provides reassurance and a safety net for people and businesses in advance of what may be a difficult winter."

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The chancellor insisted the new plan was a "very different" initiative to the furlough scheme introduced earlier this year, when Covid-19 hit its peak.

He said: "This is not a universal approach, this is an expansion of the Jobs Support Scheme specifically for those people who are in businesses that will be formally or legally asked to close so in that sense it's very different.

"I've always said that we will adapt and evolve our response as the situation on the health side adapts and evolves.

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"That's what's happening.

"I think that's the pragmatic and right thing to do."

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According to a Treasury source, the expanded scheme is expected to cost "hundreds of millions" of pounds every month, while ministers will also increase cash grants to businesses in England.

These grants will go to companies forced to close, and could see up to £3,000 per month payable each fortnight.