LONDON (Reuters) – Britain will ramp up its bid to slow a surge in unemployment during the coronavirus crisis by pledging public money to cover national insurance and pension contributions for companies that temporarily ask employees not to work, as well their pay.
Britain’s government has ordered the shutdown of much of the economy in an attempt to slow the spread of the virus, raising the prospect of mass job losses.
Finance minister Rishi Sunak last week took the historic step of saying the British state would pay 80% of the wages of private sector workers – capped at 2,500 pounds a month – for at least three months.
On Thursday, Sunak announced a similar plan for self-employed workers and on Friday he added the pledge to cover national insurance and minimum auto-enrolment pension scheme contributions made by employers.
“Our Coronavirus Job Retention Scheme supports workers and businesses up and down the UK – and today we’re strengthening it because we will do whatever it takes to support jobs,” Sunak said in a statement.
The finance ministry said its national insurance and pension move could save companies an extra 300 pounds ($366.70) a month for each employee.
It also said workers made redundant after Feb. 28 could be re-employed and placed on furlough. Staff asked not to work during the crisis would be allowed to volunteer to help Britain’s health service.
Pano Christou, chief executive of sandwich chain Pret A Manger, was quoted in the Treasury statement as saying that the government’s wage plan meant his firm would continue paying its 8,000 employees, despite its shops being closed.