The government is to pay the wages of millions of workers across Britain to keep them in jobs as the economic fallout from the coronavirus outbreak escalates.
In an unprecedented step for the British government, the chancellor, Rishi Sunak , said the state would pay grants covering up to 88% of the salary of workers if companies kept them on their payroll , rather than lay them off as the economy crashes. The extraordinary payments will be worth up to a maximum of £ 2, 500 per month, just above the median income.
Coming just days after the government announced a business bailout package worth £ 798 bn to help firms cope with the lockdown of large parts of the British economy as the disease spreads, the chancellor described his revamped plan as one of the most comprehensive in the world and “unprecedented in British history”. City economists said the new plan would cost an additional £ 78 bn.
Sunak said: “We are starting a great national effort to protect jobs. 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 his commitments were “unprecedented measures for unprecedented times” as he appealed to the public to support each other.
“Now more than at any time in our history we will be judged by our capacity for compassion. Our ability to come through this won’t just be down to what government or businesses do but the individual acts of kindness that we show each other. ”
He said there would be no limit on the funding available to pay people’s wages. The payments will be backdated to the start of March, will be up and running within weeks, open initially for at least three months, and could be extended if necessary.
Speaking directly to employers as growing numbers of British firms teeter on the brink of collapse, leaving millions of jobs hanging in the balance, Sunak 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 government is also deferring the next quarter of VAT payments, which is the equivalent of injecting another £ bn into the economy and is designed to help companies stay afloat, he added.
Sunak was speaking alongside Boris Johnson at the daily Downing Street press conference hours after schools shut to most children until further notice and just after the prime minister announced the enforced closure of pubs, restaurants, theaters and other social venues. The shutdowns will have dramatic repercussions for the economy, and Johnson said the package of financial aid was intended to be temporary, and part of a “joint objective” between people and the government to beat the disease.
“We will do everything in our power to help. Supporting you directly in a way that government has never done before, in addition to the package we have already set out for business, ”Johnson said.
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