Government will cover business wage costs as pubs ordered to close

Cafes, bars, pubs and restaurants are to be closed under sweeping new measures to try and slow the spread of coronavirus.

Prime Minister Boris Johnson announced the latest drastic move in his latest daily Covid-19 Downing Street press conference.

But those worried about losing their jobs have been told the Government will pay 80 per cent of wages for everyone who finds themselves out of work – up to a maximum of £2,500 a month.

It comes on the day that Britain’s schools closed their doors to all but the children of “key workers” and as the global death toll passed 10,000. Italy, the country with the worst death toll, saw the number of fatalities climb by 627 to more than 4,000.

The Prime Minister said public venues such as pubs and leisure centres, would close as of tonight. Take-aways would continue.

He said: “The speed of our eventual recovery depends entirely on 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.

“We need now to push down further on that curve of transmission between us.

“And so following agreement with all the ... devolved administrations, we are collectively telling cafes, pubs, bars and restaurants to close tonight as soon as they reasonably can and not to open tomorrow.

Prime Minister Boris Johnson (centre), Chancellor Rishi Sunak (left) and Dr Jenny Harries (right) speaking at a media briefing in Downing Street (Image: PA)

“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.

“You may be tempted to go out tonight and I say to you please don’t, you may think that you are invincible - but there is no guarantee that you will get it.

"But you can still be a carrier of the disease and pass it on.

“We want you as far as possible to stay at home.”

Chancellor Rishi Sunak said the move to support people out of work would cover anyone on PAYE – which would included many people on zero hours contracts.

He said: “Our desire is to cover as broad a range of people as possible.”

He said: “I have a responsibility to make sure that we protect, as far as possible, people’s jobs and incomes.

“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.

“We’re setting up a new coronavirus job retention scheme. Any employer in the country small or large, charitable or non-profit, will be eligible for the scheme.

“Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll rather than being laid off.

“Government grants will cover 80% of the salary of retained workers up to a total of £2,500 a month - that’s just above the median income.”

Mr Sunak said “our planned economic response will be one of the most comprehensive in the world”.

He added: “To all those at home, right now anxious about the days ahead, I say you will not face this alone.”

The Chancellor said the coronavirus business interruption loan scheme will now be interest-free for 12 months rather than the six months previously announced.

“And thanks to the enormous efforts of our critical financial services sector those loans will now be available starting from Monday,” he said.

He added: “Any employer in the country, small or large, charitable or non-profit, will be eligible for the scheme.”

He also promised further measures next week to ensure larger and medium sized businesses will be able to access the credit they need.

Communities minister Deirdre Hargey said she is working to relieve the hardship and negative impact of coronavirus on people and their wellbeing, with actions from “building early flexibility in our social security system” to ensure people in need the help they require.

Ms Hargey revealed there has been an increase in demand of 300% of the social security system, adding resources are being adjusted to cope with demand.

She also announced that her department is providing £200,000 of match-funding to Community Foundation NI’s (CFNI) Coronavirus Community Fund.

Mr Sunak said: “We want to look back on this time and remember how we thought first of others and acted with decency.

“We want to look back on this time and remember how in the face of a generation-defining moment, we undertook a collective national effort and we stood together. It’s on all of us.”

The Chancellor said the next quarter of VAT payments will also be deferred until the end of June in a cash injection of £30 billion.

Mr Sunak said: “To help businesses pay people and keep them in work I’m deferring the next quarter of VAT payments, that means no business will pay any VAT from now until the end of June.

“And you’ll have until the end of the financial year to repay those bills. That’s a direct injection of over £30 billion of cash to businesses equivalent to 1.5% of GDP.”

He also made an appeal to bosses to stand by their workers during the coronavirus crisis, saying: “The Government is doing its best to stand behind you and I’m asking you to do your best to stand behind our workers.”

The Novel Coronavirus SARS-CoV-2 (Image: AP)

Mayor of London Sadiq Khan said he agreed with the decision to shut pubs, restaurants and other public spaces.

He tweeted: “I want to make a direct appeal to everyone: Act immediately on the expert advice,” he tweeted.

“If you ignore this, people will die as a result.”

Shadow health secretary Jonathan Ashworth tweeted: “We all have to adjust our behaviour to defeat this virus.”

Wetherspoon later confirmed it was closing all its pubs.

Nik Antona, chairman of the Campaign for Real Ale, said: “Whilst the pubs industry will be devastated by the decision to force closure, it is exactly the type of decisive leadership that has been called for this week as many pubs hung in limbo.

“Pubs and the wider hospitality industry now have clear instruction that closing their doors is the right thing to do, and the confidence that the Government will support their staff and their business.

“This decision will ensure that they can emerge from this crisis in the best position to rebuild their businesses and continue to offer their vital community service to their customers."

Frances O'Grady, general secretary of the Trades Union Congress, said on Twitter: "This is a breakthrough. @RishiSunak has shown real leadership. We’re glad he's listened to unions and taken vital steps to support working families.

"Employers can now be confident they'll be able to pay their wage bills. They must urgently reassure staff that their jobs are safe."

And Adam Marshall, director-general of the British Chambers of Commerce, tweeted: "So pleased to see @RishiSunak @hmtreasury announce deferral of VAT payments for next quarter.

"Keeps money in the pockets of businesses to pay their employees and suppliers - and keep the economy going.

"This step will make an immediate difference on cash flow for many firms."

Henri Murison, director of the Northern Powerhouse Partnership, said: “Today, the Chancellor has helped businesses up and down the country, with the job retention scheme and enhanced safety net.

General Secretary of the Trades Union Congress, Frances O'Grady. (Image: Getty Images)

It is a bold step by helping pay workers’ wages which will prevent hundreds of thousands losing their jobs in the North and will prevent damage which otherwise could have taken a decade or more to repair.

"We will need to build a recovery for all – and this Chancellor is demonstrating he will be as bold as is required now and throughout this crisis."

Chief executive of the Recruitment & Employment Confederation Neil Carberry said: "The Chancellor’s announcement is the big action the REC and many other business organisations has been working hard to achieve all week.

"The key thing now is to make sure the money can flow quickly and simply to the businesses that need it.

"Cash flow support, VAT deferment and wage payments are the exact radical measures that will help.

"The most important thing now is to implement these changes with great speed."

Mike Hawes, chief executive of automotive trade body the SMMT, said, "The Chancellor’s unprecedented package of emergency funding and tax support will come as a huge relief to automotive companies of all shapes and sizes as they battle to safeguard their businesses and support thousands of workers and their families who otherwise face hardship.

"99% of ��Ƶ automotive output is now halted meaning thousands of businesses are counting their future, not in months or weeks, but in days. We need these measures implemented swiftly and will work closely with government and our members to keep this critical and fundamentally competitive sector alive.”

The Federation of Small Businesses (FSB) welcomed many of the measures but said the self-employed must not be forgotten.

National chairman Mike Cherry said: “While it was encouraging to hear the Chancellor pledge his support for the self-employed today – with a commitment to defer self-assessment and VAT bills and suspend the Minimum Income Floor – this Government has a long way to go to show it’s on the side of our five million-strong self-employed community.

"Over the coming days, we need to see the Chancellor map out how he will directly support the self-employed in the same way as he has committed to directly support employees.

"The question at this point is – with firms being force to close – why have the self-employed been excluded from the commitment to pay 80% of earnings?

“It cannot be right that an employee currently earning £25,000 a year could access £20,000 per annum through the new job retention scheme, while someone who’s self-employed earning the same sum might only access around £5,000 worth of support.

“We need to see the Prime Minister’s ‘whatever it takes’ approach extended to the self-employed – that means following the lead of other nations by guaranteeing 80% of incomes for those who lose work.”