Sunak gives ‘unprecedented’ wage boost to help jobs under threat
RISHI SUNAK was today promising “an unprecedented response” to the threat to millions of jobs from the coronavirus shutdown.
The Chancellor was this afternoon unveiling details of a major intervention to replace a significant share of the wages of workers who face being laid off. A Treasury source told the Evening Standard: “These are unprecedented times and need an unprecedented response — from all of us. It’s time for thinking outside the box and we’ve been working round the clock to deliver for people. Our top priority is to do everything we can to keep people in their jobs.”
Whitehall sources were not dismissing suggestions that 60 per cent of salaries could be provided by the Treasury, possibly via employers using PAYE or the National Insurance system. But details of how Mr Sunak plans to deliver — and how many billions of pounds he is willing to commit — was being worked on at the Treasury.
Prime Minister Boris Johnson yesterday said the Government’s aim was to be “looking after the people first” and urged employers to “stand by employees because we are going to stand by you”.
The Government wants to ensure that workers obey calls to self isolate and do not feel under financial pressure to work, even when showing possible symptoms of Covid-19. Mr Sunak has massively ramped up business support already, with £12 billion of coronavirus support in his Budget, followed by £20 billion of grants and £330 billion of access to loans earlier this week.
But economists warned that without more support for staff pay, bars and restaurants would simply decide to “mothball” their businesses and lay off workers to cut their outgoings, while
pocketing a business rates holiday promised by the Chancellor.
The need for a rescue was underlined by warnings that tonight is an effective deadline for more than a million workers in London’s hospitality sector alone. They are typically informed on Fridays and Saturdays what shifts they will work in the week ahead.
Demand for hotel rooms has reached record lows, the boss of InterContinental Hotels warned. Keith Barr, whose company owns Holiday Inn, said a massive fall-off in new customers had forced his business to “take the right steps” to protect itself as he announced swingeing cuts. “Demand for hotels is currently at the lowest levels we’ve ever seen,” Mr Barr said.
Mike Ashley’s retail empire Frasers Group is the latest high street firm to speak of “significant disruption” to its business. The head of the Scottish Tourism Alliance said he was left “speechless” by news that a Highland hotel has sacked and evicted its staff. A letter to workers at the Coylumbridge Hotel in Aviemore — owned by Britannia Hotels — terminated employment and told staff to leave their accommodation immediately.
Marc Crothall, chief executive of the Scottish Tourism Alliance, told the BBC: “I was absolutely speechless as to the actions that Britannia Hotels have taken. There is huge anger among our industry as well... Hundreds and hundreds have come out to condemn what is a deplorable action.”
Former business secretary Greg Clark and former shadow local government minister Jack Dromey buried political differences to write in the Daily Mirror: “It will involve the state providing a vast sum. For businesses, support should replicate what business continuity insurance would provide. It should allow workers to continue to be employed. It should offer cash for paying the demonstrated wage bill.”
Mr Johnson told the nation he is “absolutely confident that we can send coronavirus packing in this country”, and the tide can be turned within 12 weeks. But he implied that this is only if the public heeds the social distancing guidance, saying: “I know it’s tough... Please, please follow the advice.”