Coronavirus: Chancellor to announce wage bailout plan
Rishi Sunak set to act after warnings that companies across Britain could face ruin
Chancellor Rishi Sunak is today expected to announce an employment and wage subsidy package in a bid to protect millions of jobs amid the coronavirus pandemic.
The government has held talks with business groups and union leaders, who urged Boris Johnson to help companies to pay wages amid the economic shock caused by the global outbreak.
“Negotiations went on into the night,” according to BBC economics editor Faisal Islam, with “many British companies see[ing] their cashflow dwindle because of the coronavirus and measures brought in to suppress it”.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Johnson has urged struggling businesses to “stick by their employees”, with the prime minister and Sunak expected to make an announcement about the wage rescue plan at this afternoon’s daily coronavirus briefing.
–––––––––––––––––––––––––––––––For a round-up of the most important stories from around the world - and a concise, refreshing and balanced take on the week’s news agenda - try The Week magazine. Get your first six issues for £6–––––––––––––––––––––––––––––––
The package had been due to be announced next week, but has been brought forward amid accusations by senior Tory MPs that the government’s existing measures are “simply not going to be enough”, according to The Times.
Conservative MP Greg Clark, a former business secretary, said yesterday that businesses can “see no choice but to lay off workers now”.
Clark added that many businesses are also rejecting the offer made earlier this week of government-backed loans because they “have no idea when they would be able to pay back the debt they would incur”.
Sir Bernard Jenkin, Conservative MP for Harwich and North Essex, echoed this, arguing that even traditional, small-state “diehards are lining up for far more radical measures”.
The Times claims that the wage annoucement could include cuts to employers’ national insurance and the basic rate of income tax and a plan to subsidise people’s wages.
A source told the paper that the government could in effect underwrite 60% of the average national wage for each worker. The plan was described by an official as an “entirely new approach” that would present “significant technical challenges”.
The BBC says the temporary support could be pegged to the 12-week period within which the prime minister yesterday said the country could “send the virus packing”.
After making another emergency rates cut yesterday, the Bank of England added to the pressure on the government when it said the measures announced by Chancellor Rishi Sunak were not going to be enough.
Sunak had earlier this week unveiled an “unprecedented” £330bn loan scheme to support businesses, alongside a raft of “direct support” measures including tax cuts, millions in grants and three month “mortgage holidays”.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Airplane food is reportedly getting much worse
Cockroaches and E. coli are among the recent problems encountered in the skies
By Justin Klawans, The Week US Published
-
What Mike Huckabee means for US-Israel relations
In the Spotlight Some observers are worried that the conservative evangelical minister could be a destabilizing influence on an already volatile region
By Rafi Schwartz, The Week US Published
-
Crossword: November 19, 2024
The Week's daily crossword
By The Week Staff Published
-
'Brain drain' fear as record numbers leave New Zealand
Under The Radar Neighbouring Australia is luring young workers with prospect of better jobs
By Chas Newkey-Burden, The Week UK Published
-
Is the UK economy returning to normal?
Today's Big Question Tories claim UK has 'turned a corner' while Labour accuses government of 'gaslighting' public
By The Week UK Published
-
Ghost kitchens are pulling a disappearing act
under the radar The delivery-only trend is failing to live up to the hype built up during the pandemic
By Theara Coleman, The Week US Published
-
Why au pairs might become a thing of the past
Under The Radar Brexit and wage ruling are threatening the 'mutually beneficial arrangement'
By Chas Newkey-Burden, The Week UK Published
-
The birth of the weekend: how workers won two days off
The Explainer Since the 1960s, there has been talk of a four-day-week, and post-pandemic work patterns have strengthened those calls
By Chas Newkey-Burden, The Week UK Published
-
New austerity: can public services take any more cuts?
Today's Big Question Some government departments already 'in last chance saloon', say unions, as Conservative tax-cutting plans 'hang in the balance'
By The Week UK Published
-
Would tax cuts benefit the UK economy?
Today's Big Question More money in people's pockets may help the Tories politically, but could harm efforts to keep inflation falling
By The Week UK Published
-
Why household wealth took off during the pandemic
Under The Radar The Covid-19 pandemic caused a lot of pain and hardship, but new research shows it also left most Americans wealthier
By Justin Klawans, The Week US Published