Government to pay 67% of staff wages if retailers are forced to lockdown

Rishi Sunak Chancellor Furlough
Rishi Sunak

The Government has announced it will pay two thirds of the wages of staff in retail and other industries that are forced to close under the new Coronavirus restrictions.

Chancellor Rishi Sunak said the expansion of the Jobs Support Scheme would protect jobs and provide “reassurance and a safety net” for people and businesses across the UK in advance of a potentially “difficult winter”.

The news comes as ministers are expected to outline a three-tier local lockdown system on Monday, which could see hospitality venues in surging COVID-19 areas being temporarily closed to combat the spread of the virus.

Retail locations, pubs, restaurants and other businesses whose premises will be legally required to close because of restrictions will receive grants to pay the wages of staff who are unable to work, up to a maximum of £2100 a month.

Employers will not be required to contribute towards wages, but will be asked to cover national insurance and pension contributions.

Businesses will be able to claim the grant if they are subjected to the restrictions and employees are off work for a minimum of seven consecutive days.

The scheme will launch on 1 November and will run for six months, with a review in January.

Ministers will also increase cash grants to businesses which are forced to close to support with fixed costs, with the grants linked to rateable values.

The Treasury said, up to £3000 per month will be payable every fortnight

Chancellor Sunak told reporters: “Throughout this crisis my priority has always been to protect jobs so today I’m announcing an expansion of our Jobs Support Scheme, specifically to protect those jobs of people who work in businesses who may be asked to close.”

“If that happens those workers will receive two thirds of their wages for the time that they’re unable to go to work.”

“I hope this provides reassurance and a safety net for people and businesses in advance of what may be a difficult winter.”

Referring to the furlough scheme which ends this month, Sunak said: “This is a very different scheme to what we’ve had before.”

“This is not a universal approach, this is an expansion of the Jobs Support Scheme specifically for those people who are in businesses that will be formally or legally asked to close so in that sense it’s very different.”

“I’ve always said that we will adapt and evolve our response as the situation on the health side adapts and evolves.”

“That’s what’s happening. I think that’s the pragmatic and right thing to do.”

The new scheme differs to the furlough scheme, which paid 80% of workers’ wages and pivoted off larger levels of job losses.

The furlough scheme will be replaced by the Jobs Support Scheme, where the government will pay up to 22% of wages for workers who come back part-time.