Coronavirus: British Chancellor unveils “radical” package of wage subsidies and loans

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CHANCELLOR RISHI SUNAK: Today I am announcing the new employment support program. The government will directly support the wages of working people, giving companies facing depressed demand the opportunity to keep their employees in jobs with shorter hours rather than firing them. The employment assistance program is based on three principles. First, it will support viable jobs. To ensure this, employees must work at least one-third of their regular hours and be paid for this work normally by their employer.

The government, in collaboration with employers, will then increase the wages of these people, covering 2/3 of the wages they lost by reducing their working hours. And the employee will keep his job. Second, we will target support to businesses that need it most. All small and medium enterprises are eligible, but large enterprises only when their turnover has passed through the crisis. Third, it will be open to employers across the UK, even if they haven’t already used the leave scheme.

The program will run for six months starting in November. And employers who retain staff on leave for shorter hours can claim both the employment assistance scheme and the job retention bonus. Mr President, throughout this crisis we have sought parity between employees and the self-employed, providing more than £ 13 billion in support to more than 2.6 million small independent businesses. I am therefore extending the existing aid to self-employed workers under conditions similar to those of the new employment aid scheme. Mr President, these are sweeping interventions in the UK labor market – policies we have never tried in this country before.

Together – with the Job Retention Bonus, the Youth Starter Program, tens of billions of pounds in job creation programs, new investments in training and apprenticeships – we are protecting millions of people. ‘jobs and businesses. Businesses need every extra pound to protect jobs rather than paying off loans and tax deferrals. So I’m taking four more steps today to make this happen. First, rebound loans have given more than a million small businesses a £ 38 billion boost to survive this pandemic. To give these businesses more time and flexibility to repay their loans, we’re introducing compensation as you grow.

This means that loans can now be extended from six to 10 years, almost halving the average monthly repayment. Firms in difficulty can now choose to pay only interest. And anyone in real difficulty can request a total suspension of repayments for up to six months. No business taking a salary as you grow will have their credit rating affected as a result. Second, I am also amending the terms of our other loan programs. More than 60,000 small and medium-sized businesses have now taken out loans for business disruption linked to the coronavirus.

To help them, I plan to extend the government guarantee on these loans up to 10 years, which will allow lenders more time to pay more people back. I’m also extending the deadline for all of our loan programs to the end of this year. And we’re starting to work on a new successor loan guarantee program that is slated to begin in January. Third, I want to give businesses more time and flexibility on their deferred tax invoices. Almost half a million businesses have reported more than £ 30 billion in VAT this year.

On current plans, these payments are due in March. Instead, I’ll allow businesses to split this VAT invoice across 11 smaller refunds with no interest payable. And any of the millions of self-assessed income taxpayers who need the extra help can now also extend their unpaid 12-month tax bill starting next January.

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