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Business, trade unions and senior Tories have urged Rishi Sunak swiftly to deliver a massive package of wage subsidies and tax cuts as the coronavirus pandemic threatens millions of jobs, with swaths of companies facing imminent ruin.
The chancellor is expected to announce “unprecedented” measures to support companies and their employees on Friday, in addition to this week’s promise of £20bn of direct support for business and a £330bn loan guarantee scheme.
Boris Johnson said he hoped Mr Sunak would have a “great package ready to go” and vowed that the government would prioritise help for those people worst affected, arguing that in the financial crisis of 2008 the banks appeared to have more state protection than ordinary workers.
Mr Johnson told companies: “Stand by your employees, stand by your workers, because we will stand by you.” So far, employers in the leisure and hospitality sectors — among the ones most exposed to the shutdown of social activities — have laid off more than 200,000 people with millions of others at risk.
Crisis talks in the Treasury between the chancellor and business and union leaders continued into Thursday evening, with participants saying that Mr Sunak was serious about setting up a scheme of wage subsidies. The chancellor acknowledged that the government was in a race against time to stop companies collapsing and hundreds of thousands of workers losing their jobs.
“A lot of businesses are hours, not days, away from collapse,” said one person present at the talks. “It’s critical that we get cash to them now.”
Mr Sunak is considering a range of radical options, including tax holidays for companies or reversing the pay-as-you-earn tax system so that the government picks up some or all of the wage bill for companies that keep on staff.
One person said that the meeting covered the possibility of deferring of PAYE, VAT and other taxes and the prospect of the government underwriting wages. Mr Sunak agreed that money had to get to the front line immediately.
“We are working around the clock to deliver further support to individuals and families whose jobs and incomes will be affected by Covid-19,” Mr Sunak said.
The chancellor’s earlier support package for business, notably the offer of loan guarantees, has been criticised by some Tory MPs as insufficient to persuade companies to retain workers as the virus bites.
