Coronavirus: Chancellor unveils 'unprecedented measures' including government helping to pay wages

The Chancellor has said that “for the first time in our history” the Government will step in and help pay people’s wages through a coronavirus job retention scheme.

Speaking at the daily coronavirus media briefing, Rishi Sunak unveiled what he called “unprecedented measures for unprecedented times”.

The government is to pay 80% of wages for employees not working, up to £2,500 a month.

All employers will be eligible for the scheme, which will provide a grant to cover the payments of those kept on the payroll instead of being laid off.

He 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 in 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% of the salary of retained workers up to a total of £2,500 a month – that’s just above the median income.”

Mr Sunak added: “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.”

The government’s loan scheme will also now be interest free for 12 months rather than 6 months as previously announced, and will start from Monday.

“Thanks to the enormous efforts of our critical financial services sector those loans will now be available starting from Monday,” Mr Sunak said.

“Any employer in the country, small or large, charitable or non-profit, will be eligible for the scheme.”

Mr Sunak promised further measures next week to ensure larger and medium sized businesses will be able to access the credit they need.

The chancellor also announced that he is deferring VAT for all businesses until the end of June.

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% of GDP.”

Universal credit standard allowance has been increased by £1000 for the year to help the most vulnerable.

The next self assessment payments for people who are self-employed have also been deferred until next year.

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 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.

“Please look very carefully at that support before making any decisions to lay people off.

“It’s on all of us.”