Government to pay wages if Covid rules force firms to close

The UK Government will pay two-thirds of staff wages at businesses forced to temporarily close under coronavirus restrictions.

The new scheme will run for six months from November 1 for firms hit by local or national lockdown measures.

It will see the UK Government pay 67 per cent of each employees’ salary, up to a maximum of £2100 a month.

However, the Scottish Government had called for any new salary support to start immediately, with pubs and restaurants being hit by fresh restrictions from 6pm on Friday.

The new support is less generous than the furlough scheme, which paid 80 per cent of millions of workers’ wages and warded off larger levels of job losses.

It ends this month and 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.

Chancellor Rishi Sunak made the announcement hours before pubs and restaurants in central Scotland were set to close for two weeks.

He said: “Throughout the crisis the driving force of our economic policy has not changed.

“I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.

“The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.”

Under the scheme, employers will not be required to contribute towards wages, but asked to cover national insurance and pension contributions.

Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for at least seven consecutive days.

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

The government said it would work with the devolved administration to make sure the UK wide scheme “operates effectively across all four nations”.

The measures will be used alongside the scheme announced two weeks ago, which is designed to support businesses facing low demand over the winter months and the £1000 job retention bonus, which encourages employers to keep staff on payroll.

A business grant scheme has also been announced for England, meaning money will be made available to the Scottish Government for similar measures.