The U.K government announces financial aid to businesses affected by COVID-19
Posted on April 4, 2020
To help employers and businesses in the U.K affected by the Coronavirus pandemic, the U.K government has announced that it will help pay the wages of their employees. The government has decided to pay 80% of the salary who have been retained by their employers. The government declared that it is ready to pay wages up to 2,500 pounds.
The government hopes this step will prevent businesses from laying off employees. This financial help is targeted at employers who have already laid off workers but have promised to bring them back once the pandemic is over.
This move will employees to keep their jobs even if their employers are not able to pay them. The government has promised to pay the gross salary of these employees for three months.
Economic experts have welcomed the move saying it shows the government’s determination to fight the economic impact of the crisis.
Experts estimate the proposed measures will cost the U.K government 78 billion pounds but will save thousands of jobs. Without the relief package, unemployment could have increased up to 8% which was at 4% before the crisis. The unemployment rate is expected to climb to 6% despite the government aid.
The latest decision is part of a series of moves by the U.K government to help businesses face the impact of COVID-19. The other measures taken by the government include:
- Deferring the VAT payments of companies till June
- Providing cash payments to small businesses
- Deferring self-assessment income tax payments to six months
- Providing nearly 1 billion pounds in financial aid to companies struggling to pay their rents
Relief move follow similar moves like other countries:
The move is part of the effort to reduce the economic impact of the Coronavirus lockdown. The move it is hoped will help to save hundreds of jobs. Self-employed citizens have been given relief through tax and welfare systems.
The U.K government’s move is not alone; many other countries have stepped up their efforts to help employees and business tide over the Coronavirus pandemic. The U.S government is considering a move to make direct cash payments to its citizens while Denmark has decided to pay 75% of its worker’s wages. French workers laid off due to the pandemic are now entitled to claim partial unemployment benefit equal to 84% of their salaries and employers will have to keep the jobs open for them.
Australia has decided to give USD 3.9 billion in aid to more than 680,000 small businesses in the country.
The proposed financial aid it is hoped will help businesses come out largely unscathed from the pandemic and help them rebuild their businesses once things return to normal. The move should help small businesses put their business in order once the crisis is over.