Chancellor's Statement: A new Coronavirus Job Retention Scheme will be set up to help pay people’s wages
The Chancellor has today 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.
This comes as Government instructs entertainment and hospitality premises, like bars and restaurants, to close from tonight 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 three 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 today across the business and welfare package are UK-wide.
“In order to help delay the spread of Coronavirus, the Government has instructed entertainment and hospitality businesses including pubs, bars and restaurants to close from tonight.
“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.
Prime Minister Boris Johnson said: “Yesterday, I set out the ambition of this government to turn the tide against coronavirus within three months. And I want to repeat that determination today.
“We are going to do it with testing. We are going to do it with new medicines and with new digital technology that will help us to see the disease as it is transmitted, and thereby, by eliminating it, to stamp it out.
“And above all, now we are going to defeat this disease with a huge national effort to slow the spread by reducing unnecessary social contact.
“And I want to thank everyone for following the guidance we issued on Monday:
to stay at home for 7 days if you think you have the symptoms,
for 14 days if anyone in your household has either of the symptoms – a new continuous cough or a high temperature.
To avoid pubs, bars, clubs and restaurants.
To work from home if at all possible.
Keep washing your hands.
“I know it has been tough. I know it has been inconvenient. But these actions that we’re all taking together are already helping to take the strain off our NHS (National Health Service).
“Bit by bit, day by day, by your actions, your restraint and your sacrifice, we are putting this country in a better and stronger position, where we will be able to save literally thousands of lives, of people of all ages, people who don’t deserve to die now.
“People whose lives can, must and will be saved.
“And as we take these actions together and as we make these sacrifices, we can see the impact on the real economy.
“Already, fantastic British companies, already under huge strain, big and small.
“Workers who are finding that their jobs are under threat or are going, through no fault of their own. And to all of them, we in government say: We will stand by you.
“And I say that to companies, remember our joint objective: to beat this virus. And we will do everything in our power to help.
“Supporting you directly in a way that Government has never been done before, in addition to the package we have already set out for business.
"And, of course, these measures are intended to be temporary and of course I am confident that, in time, the UK economy is going to bounce back - of course it is.
"But I must be absolutely clear with you: the speed of that eventual recovery depends entirely on our ability, our collective ability, to get on top of the virus now.
“And that means we have to take the next steps, on scientific advice and following our plan, we are strengthening the measures announced on Monday which you will remember.
“And, of course, people have already made a huge effort to comply with those measures for avoiding unnecessary social contact.
“But we need now to push down further on that curve of transmission between us.
“And so following agreement between all the formations of the United Kingdom, all the devolved administrations.
“We are collectively telling, telling cafes, pubs, bars, restaurants to close tonight as soon as they reasonably can, and not to open tomorrow.
“Though to be clear, they can continue to provide take-out services.
“We’re also telling nightclubs, theatres, cinemas, gyms and leisure centres to close on the same timescale.
“Now, these are places where people come together, and indeed the whole purpose of these businesses is to bring people together. But the sad things is that today for now, at least physically, we need to keep people apart.
“And I want to stress that we will review the situation each month, to see if we can relax any of these measures.
“And listening to what I have just said, some people may, of course, be tempted to go out tonight. But please don’t.
“You may think you are invincible, but there is no guarantee you will get mild symptoms and you can still be a carrier of the disease and pass it on to others, so that’s why, as far as possible, we want you to stay at home, that’s how we can protect our NHS and save lives.
“To repeat, I know how difficult this is, how it seems to go against the freedom-loving instincts of the British people and I also know much, right now, workers and business deserve the financial reassurance we are giving them.
“But we will get through this. We will get through it together, and we will beat this virus.
“And to ram that point home: the more effectively we follow the advice that we are given, the faster this country will stage both a medical and an economic recovery in full.”