Chancellor reveals “unprecedented” wage subsidies package

Chancellor Rishi Sunak announced an “unprecedented” move that the Coronavirus Job Retention Scheme would be in place for an initial three months and would be extended as needed. The scheme applies to payroll from March 1, 2020.

Employees who were on organisations’ payroll on February 28 can be covered, even if they’ve since been let go.

"Today I can announce that for the first time in our history the government is going to step in and pay people’s wages,” Sunak said.

Businesses and trade bodies across the country had been warning they could collapse, placing jobs across the UK at risk.

Under the scheme, employers would apply via HMRC for grants to cover their staff’s wages.

Responding to the move, Peter Tutton, head of policy at StepChange, said: “With millions of households worrying whether they’ll be able to make ends meet in the coming months, strong and meaningful support from government is vital. This announcement brings much needed reassurance now, and should also help mitigate the anticipated surge in financial difficulties later. No-one can pretend this is going to be an easy period for household finances, but timely and decisive action will help.

“People are already being plunged into financial crisis, so the payment holidays, forbearance, protection against evictions and better help for those who are unwell are essential, as well as the wage support. We’ll need to keep a close eye on whether the benefits system keeps people out of financial harm.”

Sunak added that the Coronavirus Business Interruption Scheme, which will be delivered by the British Business Bank from Monday offering loans of up to £5m, would be interest-free for 12 months. It had initially been set to be interest-free for six months.

Businesses will also benefit from VAT deferrals until the next quarter, the chancellor said.