UK grants £2500 per month to workers affected by Covid19

The UK government has announced that it will pay the wages of employees who are unable to work because of the COVID-19 crisis. The move is aimed at protecting the jobs of those who work in the UK.

The UK government will pay 80% of the salary for the staff who are retained by their employers. The package will cover wages of up to £2,500 a month.

Chancellor of Exchequer Mr. Rishi Sunak said that with this measure, the layoffs of workers due to the pandemic will be avoided. There are worries of firms getting closed and jobs destroyed. Mr. Sunak observed that closing restaurants and pubs would have a great impact on the business scene in the UK.

Firms that have already been forced to lay off workers due to the pandemic can avail the subsidy upon bringing back the workers. The firms must grant leave of absence instead of laying off the workers. This new scheme will keep the workers in their jobs even if their employers cannot pay them. The wages will be applied to gross pay. It will be backdated to the start of March and will last for 3 months. Mr. Sunak also hinted at the possibility of extending the scheme if necessary.

HMRC (Her Majesty's Revenue and Customs) will run the scheme. It’s expected to make the first grant to businesses within weeks.

The Confederation of British Industry (CBI) calls this "a landmark package". Director-General Carolyn Fairbairn takes this as the beginning of the UK's economic fightback. The Resolution Foundation welcomed the package appreciating its reach to the lower-paid workers. They bear the highest risk of losing jobs. With the wage package, the UK government aims at reducing the burden on businesses and their employees.

Increased benefits are announced for the self-employed. Other measures to support and help firms and workers include:

• Small businesses granted interest-free cash
• Companies deferred from VAT payments until the June end
• Self-assessment income tax payments for July 2020 postponed for 6 months
• A hike of £20 a week done in standard Universal Credit. The same raise applied for those even now on the working tax credit scheme
• Nearly £1bn allowed for those finding it almost impossible to pay rent. This is done through increased housing benefit and Universal Credit

Capital Economics observed that without governmental intervention, the unemployment rate would have risen to a crisis-level of 8%. With the help of the UK’s banks, the employers will soon begin to get the benefits of this new package.

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