Money (7)

Chancellor Rishi Sunak is preparing to announce a package to subsidise employee wages in a bid to save millions of jobs.

It is understood that the government held talks with business leaders and union groups, including the likes of the Federation of Small Businesses and Trades Union Congress, late into Thursday night.

It comes just days after Mr Sunak launched more than £330 billion worth of government loans and other measures designed to support small businesses.

In the days following that announcement, the Prime Minister and senior figures including the governor of the Bank of England have urged businesses not to fire staff. Speaking at his daily update on Coronavirus on Thursday, Boris Johnson called for businesses to “stick by their employees, because we’re all going to need them”.

However, plenty of small business owners, particularly in the hospitality, have seen their revenues plummet and have said the government loans simply won’t come quick enough to save either staff or the business.

It is not yet known what form these new measures will take, with plenty of speculation about the method the government will follow. There has been most speculation surrounding the pledge made by Denmark’s government, which is providing 75% of staff’s salaries for an initial three month period to businesses who pledge not to cut jobs.

Labour is understood to be pushing for the government to cover as much as 80-90% of salaries. Elsewhere, a group of academics has written to the government calling on it to introduce Universal Basic Income, whereby every person is given £1,000 a month.

Speaking to the BBC, Dame Carolyn Fairbairn, director general of the CBI, said: “Many other countries have now done this – France, Germany, Spain, Italy have put employee wage support in place and if that comes through quickly I believe there are businesses who will take a different decision because they want to keep their people and they want their businesses to be viable for when we recover.”

Frances O’Grady, general secretary of the Trades Union Congress, said: “As well as providing emergency support to business, it is essential that money goes into workers’ pockets now. We must do whatever it takes to stop businesses going to the wall and workers being plunged into poverty.”

 

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