Published on Friday, March 20, 2020

Government to pay salaries to prevent redundancies

The Government has ramped up its coronavirus support for businesses, promising to pay 80% of the salaries of staff who aren't needed at work during the current crisis.

Chancellor Rishi Sunak said companies of any size would be eligible for grants to cover staff costs, which will be back dated to March 1 and will be available for at least three months, possibly longer.

The government will cover 80% of an employee's normal salary, up to a maximum of £2,500 per person per month, which Sunak said was just above the average wage, as long as companies keep them on their books.

Sunak pleaded with companies to look at the support available before laying off staff. 

His announcement came just after Hays Travel, the largest travel retailer, announced it was placing 880 staff on zero hours contracts and cutting the working hours for the remainder of its workforce.

ABTA had only hours earlier warned the government that time was running out to save travel businesses, calling for a package of measures, including direct funding, tax holidays and a suspension of air passenger duty.

The Chancellor also announced today that it was extending the interest-free period on the government-backed business loans announced in the Budget from three to six months.

However, an ABTA spokesperson said the Association was still warning the Government that further action is needed.

It also wants temporary changes to the Package Travel Regulations to ease the financial burden on businesses of refunding thousands of holidays.

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