The government has pledged to pay 80% of the wages of people left out of work as a result of the coronavirus.
Payments will be as much as £2,500 per month.
Chancellor Rishi Sunak made the promise in the latest of the government’s daily coronavirus briefings, where prime minister Boris Johnson told pubs, cafes and restaurants to close “as soon as they reasonably can”.
Sunak also announced an extension of the interest-free period of the Business Interruption Loan Scheme to 12 months from the six months announced earlier this week. The loans allow small and medium-sized businesses to borrow up to £5 million.
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The chancellor also announced that businesses will not have to pay any VAT until the end of June, and said his announcements amounted to a “direct injection of £30 billion” to the economy, and were equivalent to 1.5% of the UK’s GDP.
“I know it’s incredibly difficult out thre,” he said. “We in government are doing everything we can to support you.”
The latest fiscal measures introduced by the government in response to the impact of coronavirus on the economy follow a business rates ‘holiday’ and loans of up to £25,000 for companies in the retail, leisure and hospitality sectors.
A national advertising campaign is set to be launched in the “next few weeks” to make businesses aware of the emergency measures.
“The government is doing its best to stand by you, and I’m asking you to do your best by standing by your workers,” added Sunak.
But he warned: “The truth is we are already seeing job losses and there may be mroe to come. I can’t promise you no one will face hardship in the weeks ahead.”
Sunak then went on to announce that the standard allowance for those receiving Universal Credit would be increased by £1,000 per year and that working tax credits would be increased by the same amount.
He also said self-employed people will be entitled to the equivalent of statutory sick pay through the Universal Credit system.
Sunak described his announcements as “unprecent measures for unprecedented times”.