Tom Swarbrick 10pm - 1am
Coronavirus: Rishi Sunak announces plans to help pay employees' wages
20 March 2020, 17:21
The Government will help pay wages in a bid to keep people in employment during the coronavirus pandemic, Rishi Sunak has announced.
The Chancellor said a new scheme will allow businesses to apply for grants covering up 80 per cent of the salary of workers, up to £2,500 per month.
It will be open for "at least three months" but will be extended. He expects the first payouts to come within weeks, and they will be backdated to March 1.
The Chancellor said he is placing "no limit" on the funding, which will allow businesses to retain staff while they are forced to close.
Mr Sunak said: "I have a responsibility to make sure that we protect, as far as possible, people's jobs and incomes.
"Today I can announce that in the first time of our history, the Government is going to step in and help pay people's wages.
"We're 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 £2,500 a month - that's just above the median income."
Mr Sunak said "our planned economic response will be one of the most comprehensive in the world.
"To all those at home, right now anxious about the days ahead, I say you will not face this alone."
He is also deferring the next quarter of VAT payments - until the end of June - and companies will have until the end of the financial year to repay those bills.
The Chancellor Rishi Sunak also said the coronavirus business interruption loan scheme will now be interest free for 12 months rather than the six months previously announced.
"And thanks to the enormous efforts of our critical financial services sector those loans will now be available starting from Monday," he said.
Mr Sunak added: "Any employer in the country, small or large, charitable or non-profit, will be eligible for the scheme."
He promised further measures next week to ensure larger and medium sized businesses will be able to access the credit they need.
Mr Sunak said: "We want to look back on this moment and remember the many small acts of kindness done by us and to us.
"We want to look back on this time and remember how we thought first of others and acted with decency.
"We want to look back on this time and remember how in the face of a generation-defining moment, we undertook a collective national effort and we stood together. It's on all of us."
The Chancellor said the next quarter of VAT payments will be deferred until the end of June in a cash injection of £30 billion.
Mr Sunak said: "To help businesses pay people and keep them in work I'm deferring the next quarter of VAT payments, that means no business will pay any VAT from now until the end of June.
"And you'll have until the end of the financial year to repay those bills. That's a direct injection of over £30 billion of cash to businesses equivalent to 1.5 per cent of GDP."
The Chancellor made an appeal to bosses to stand by their workers during the coronavirus crisis.
"Let me speak directly to businesses: 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."
The Chancellor said the next self-assessment payments will be deferred to January 2021 to further support the self-employed.
The Chancellor also announced support for the self-employed.
Mr Sunak said: "I'm strengthening the safety net for self-employed people too by suspending the minimum income floor for everyone affected by the economic impact of coronavirus.
"That means that self-employed people can now access, in full, Universal Credit at a rate equivalent to statutory sick pay for employees.
"Taken together, I'm announcing nearly £7 billion of extra support through the welfare system to strengthen the safety net and protect people's incomes."