Chancellor announces worker support package

The Chancellor has outlined an unprecedented package of measures to protect millions of people’s jobs and incomes as part of the national effort in response to coronavirus.

The support comes as the UK Government instructs entertainment and hospitality premises, like bars and restaurants, to close to limit spread of coronavirus.

A new Coronavirus Job Retention Scheme will be set up to help pay people’s wages. Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak.

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

Universal Credit and tax credits will also be increased as part of an almost £7 billion welfare boost, as he outlined one of the most generous business and welfare packages by any government so far in response to Covid-19.

To ease cash flow pressures for UK VAT registered businesses, VAT bills from now until the end of June, will be deferred until the end of the tax year.

The Chancellor’s workers’ support package means:

  • UK workers of any employer who is placed on the Coronavirus Job Retention Scheme can keep their job, with the government paying up to 80% of a worker’s wages, up to a total of £2,500 per worker each month. These will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary.
  • VAT payments due between now and the end of June will be deferred. No VAT registered business will have to make a VAT payment normally due with their VAT return to HMRC in that period. Income tax payments due in July 2020 under the Self Assessment system will be deferred to January 2021, benefitting up to 5.7m self-employed businesses.
  • Additionally, the Coronavirus Business Interruption Loan Scheme, launched at Budget, will now be interest free for twelve months.
  • The standard rate in Universal credit and Tax Credits will be increased by £20 a week for one year from April 6th, meaning claimants will be up to £1040 better off.
  • Nearly £1bn of additional support for renters, through increases in the generosity of housing benefit and Universal Credit. From April, Local Housing Allowance rates will pay for at least 30% of market rents in each area.

HMRC are working “night and day” to get the unprecedented Coronavirus Job Retention Scheme up and running and we expect the first grants to be paid within weeks.

Chancellor of the Exchequer Rishi Sunak said: “We continue to do everything possible to protect the public from coronavirus. We have been working round the clock so that we can today confirm an unprecedented package of support to protect people’s jobs and wages. And we’re strengthening our safety net at the same time.

“I said we would help individuals, businesses and the most vulnerable through this outbreak and I meant it. We will do whatever it takes in the weeks and months ahead.”

Work and Pensions Secretary Therese Coffey said: “We will do whatever it takes to protect the most vulnerable and get them through these unprecedented times, and the changes we are making to Universal Credit will help millions of people in most need.

“We are standing by those who rely on the welfare safety net as we work towards turning the tide on this disease and moving on together.”

Business Secretary, Alok Sharma, said: “We have committed to doing whatever it takes to support businesses and households through these unprecedented times, and today shows just how far we are willing to go.

“This intervention is unheard of in peacetime, but it is crucial we stand behind our businesses and those that rely on them for work and income.”

All measures announced yesterday across the business and welfare package are UK-wide.

In order to help delay the spread of Coronavirus, the Government instructed entertainment and hospitality businesses including pubs, bars and restaurants to close from last night.

This follows expert advice that more needs to be done in order tackle the spread of infection – following the call to action to isolate or socially distance. The measure, set to be reviewed on a monthly basis, will not affect supermarkets or retailers that supply fuel, medicines and other vital goods, which will continue to be open as normal for the public.

The following businesses have been asked to close:

  • Food and drink venues for consumption on-site, such as restaurants and cafes.
  • Drinking establishments, including pubs, bars, nightclubs.
  • Entertainment venues, including cinemas, theatres, concert halls, and bingo halls.
  • Museums and galleries.
  • Spas, wellness centres and massage parlours.
  • Casinos and betting shops.
  • All indoor leisure and sports facilities, including gyms.

This measure will not impact the relaxation of planning rules announced earlier this week which will allow pubs and restaurants to operate as hot food takeaways during the coronavirus outbreak.

The decision on closures will be reviewed on a monthly basis, and are being implemented across the whole of the UK in agreement with the devolved administrations. If needed, the government will enforce these measures by law.

Communities Secretary Rt Hon Robert Jenrick MP said: ”We will do whatever it takes to protect people across this country as we tackle the coronavirus outbreak. 

“While people have responded well to calls for social distancing and self-isolation, we must go further if we are to be able to stop the spread of the virus and protect the most vulnerable people in our society, and our NHS.

“That is why we are now telling entertainment and hospitality premises to close temporarily, and people to only travel if absolutely essential, to help protect each other from the further spread of the virus.

“We stand behind businesses and their employees and are offering an unprecedented range of support as we tackle this huge challenge together.”

More information about the measures announced for businesses by the Chancellor can be found here.

Responding to the Chancellor’s further economic announcementsJohn McDonnell MP, Labour’s Shadow Chancellor, said: “The Chancellor has shifted direction but unfortunately not far enough or fast enough.

“The Government must give people the economic security to stay at home by lifting the level of Statutory Sick Pay, but it appears that the Government hasn’t done that today. Sick pay is being left at a level that the Health Secretary said he could not live on, yet this is what the self-employed are being asked to get by on.

“The Chancellor’s wage protection plan sets out no obligation for employers to keep staff on, and no commitment to full wages being paid, with the cap on incomes meaning that many people will take a significant pay cut.

“This will also take some weeks to roll out at a time when wages need to be guaranteed more urgently.

“Other benefits, including for carers, are not being lifted adequately.

“The Chancellor said he would do whatever it takes, but he can and should go further – and we will keep working constructively with Government to ensure the best possible response to the Coronavirus crisis.”

A spokesperson for the Scottish Licensed Trade Association said: “These extra unprecedented measures are very much welcomed and are a life saver for Scotland’s pubs and bars and the hospitality industry in general. 

“Without all the measures introduced to help our industry, many business would have been forced to close and staff would have lost their jobs and for many these actions would have been permanent.

“Considering our industry was on the edge of a precipice only a week or so ago, the future, for both businesses and staff is now more secure than anyone could have ever foreseen.”

The initiative has also been welcomed by the country’s biggest trade union.

Unite general secretary Len McCluskey said: “This is the package of measures that trade unions like Unite have been pressing for as the most effective way to stave off mass hardship and the conditions for a depression.  

“We recognise that these are huge decisions for any government, and especially for a Conservative government, but they have listened to the calls for action and have acted appropriately. Rishi Sunak’s wage support measures are a historic first for this country, but are bold and very much necessary.

“The key to any wage support programme is that it needs to be simple, straightforward and above all fast. This is the only way to put money into the pockets of the millions who see their livelihoods hanging by a thread.

“This will definitely be some relief amid all the fear in households across the UK this evening. Never before has the country faced a crisis of this nature. People who were only days ago in secure work are now worried sick about putting food on the table in light of the coronavirus pandemic.

“The chancellor has done the right thing and we look forward to working further with him in the coming days to get this money into the hands of those most in need.”

 

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davepickering

Edinburgh reporter and photographer