Published: Mon, March 23, 2020
Markets | By Otis Pena

Coronavirus: Government to pay 80% wages for staff who can not work

Coronavirus: Government to pay 80% wages for staff who can not work

"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".

Government grants will cover 80% of the salary up to £2,500 a month - that's just above the median income.

As per reports, Sunak announced that the United Kingdom government will be paying 80 per cent of wages for employees who are not working.

And, the Coronavirus Business Interruption Scheme will be interest free for 12 months, rather than six months as initially planned, with loans available from Monday.

Sunak also announced that small businesses would be able to defer next quarter's Value-Added Tax, a direct injection of £30bn of cash-flow support for SMEs.

Melissa Davies, economist at Redburn, said: "The UK can afford this and shouldn't be squeamish about running a much larger deficit".

His lifeline to staff members might set you back the Treasury ₤14 billion a year, according to estimations from the Financial Times on the basis one million individuals register to the plan. I know that some people in the last few days have already lost their jobs. "But getting through this will require a collective national effort".

On Friday Chancellor Rishi Sunak's announced plans to underwrite the wages of workers who face being laid off as a result of the virus. There have been warnings that without action GDP could be slashed by a fifth and a million could lose their jobs within months. - with many more to follow - after "social distancing" measures brought the economy to a halt. [We will] help workers of all kinds to get through this crisis, supporting [them] directly in a way government has never done before.

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This comes soon after he announced he will donate 500,000 coronavirus testing kits and 1 million masks to the United States .

The musicians, led by Ed Barker, a former Tory candidate and sax soloist for George Michael, added: "We are not asking for special treatment, we are simply asking for fair and equal treatment and for the Coronavirus Job Retention Scheme to be extended to the self-employed".

While speaking to an global media outlet, Sunak said that the measures were equivalent to 15 per cent of GDP.

Prime Minister Boris Johnson told cafes, pubs, bars, restaurants, nightclubs, theatres and leisure centres to shut as soon as possible to cut the risk of transmission from close contact. But the exponential growth of the economic impact requires an urgent, bold new approach to protect pay and livelihoods.

Brian Murphy, head of lending at Mortgage Advice Bureau, explained further: "We are living in unprecedented times and some homeowners are rightly anxious about their finances".

After the crisis has passed a universal basic income could remain in place "as an economically secure path for workers in the 2020s", it said.

"As well as providing emergency support to business, it is essential that money goes into workers" pockets now.

"I do accept that what we're doing is extraordinary", Johnson said.

However, economists recognised the importance of keeping the economy afloat during the outbreak, with the pound up 1.5% at 1.167 dollars - suggesting investors are happy to see the UK Government spend the extra cash.

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