Chancellor Rishi Sunak has this evening revealed extraordinary new measures designed to help businesses of all sizes during the Coronavirus crisis.
Any business think of laying off staff can instead give them temporary leave and the government will pay 80% of their salary up to £2,500 a month, although the chancellor urged businesses to top this payment up where possible.
“This is designed to retain jobs even if an employer cannot afford to pay their staff,” said Sunak.
The scheme is to run for three months and will have no financial limit, but won’t be ready to begin payments until the end of April.
“This is the first time a scheme like this has ever been seen in the UK,” said Sunak.
But to ease the pain in the meantime, he also revealed an extension of his previously-announced interest-free business loans scheme.
Another measure, which few were expecting, has been to suspend VAT payments for the next three months, although the VAT owed will have to be paid back once the crisis is over.
“I know this is an incredibly difficult time for business but we are doing everything in our power to help you,” said Sunak.
“I would urge businesses to look at the support options and schemes open to them before making a decision about whether to lay people off.”
Sunak also announced an increase in Universal Credit payments and measures to help the self employed workers to be given similar help as those who are employed.
Marc von Grundherr of Benham & Reeves, says: “This latest announcement provides a glimmer of hope for many independent agents and big corporates, in particular, taking a large proportion of the weight from their shoulders where staff cost are concerned. The ability to defer their VAT bill until the end of the year will also be a huge help.
Russell Quirk says in reaction to the announcement: “Unprecedented times call for unprecedented measures. This is the equivalent in Government support of the Battle of Britain – and it actually is a battle.
“Aiding estate and letting agencies, mortgage brokers and PropTech firms with up to £2500 per employee per month in salary subsidy for the foreseeable, is truly incredible stuff and the difference between survival and going bust. We can ride this out and beat the virus. The industry just got its delivery of Spitfires to do just that”.
Polly Neate, chief executive of Shelter said, “For the many thousands of people worrying about how they will pay rent, keep the lights on, and keep food in the fridge, today’s announcement will be a great relief.
“These are vital measures to strengthen the safety net and to keep people in work, and they will significantly reduce the numbers of people at risk of losing their home.
“We are already hearing from people who are rapidly losing work and we think the government may need to further increase Housing Benefit to cover average rents as well as introduce other measures to provide crucial security to these workers during this crisis”