U.K. pledges to help pay employees in order to avoid mass coronavirus layoffs
“We all remember what happened in 2008. This time, we want to make sure, as we heal the economic damage that this is causing, that we put the people first.”
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The U.K. government unveiled a vast economic backstop on Friday evening, telling British businesses of all sizes that it would cover the majority of furloughed workers’ wages, in order to prevent wide-scale layoffs as a result of efforts to stop the spread of the coronavirus.
The Coronavirus Job Retention Scheme will cover 80% of workers’ wages, up to 2,500 pounds ($2,903), for at least three months, backdating to March 1, in an unprecedented effort to get companies to keep workers on their payrolls, rather than laying them off en masse.
The scheme covers businesses of all sizes and comes alongside a range of other measures, including 1 billion pounds ($1.16 billion) in support for renters, unlimited interest-free loans for the next 12 months, and deferring VAT payments for businesses, a “direct injection” equivalent to 30 billion pounds ($35 billion) or 1.3% of the country’s GDP, said U.K. chancellor Rishi Sunak.
“We want to look back on this moment and remember the many small acts of kindness done by us and [for] us. We want to look back on this time and remember how we thought first of others and acted with decency,” said Sunak. “We want to look back on this time and remember how in the face of a generation-defining moment, we undertook a collective national effort, and we stood together.”
Prime Minister Boris Johnson also announced that the government would officially order the closure of social venues of all kinds—cafés, restaurants, gyms, and pubs—after previously only “advising” people not to use them earlier this week.
As of Friday morning, the U.K. had 3,983 confirmed cases, with 177 deaths, according to the Department of Health and Social Care. London is the “epicenter” of the crisis, the government said earlier this week.
Friday’s announcement is the third such wave of commitments the U.K. government has made in a matter of days. On Tuesday, Johnson committed 330 billion pounds ($383 billion) in government-backed loans and guarantees, alongside grants for small businesses and mortgage holidays for homeowners. That followed social welfare expansions and other measures totaling $30 billion pounds ($34.8 billion) announced in the government budget just the week before.
Taken together, the measures are remarkable both for their historically unprecedented scale, and for their source: a Conservative government, which for years in the lead-up to the coronavirus crisis presided over wide-ranging cuts to public services, including the country’s National Health Service, which is currently facing a shortage of protective gear and other critical equipment as coronavirus cases mount.
But on Friday, Johnson spoke directly not just to the concerns over the pressures on the NHS, but worries that amid the economic fallout, the mistakes of the financial crisis of 2008 would be repeated.
“Our message for business is we will stand behind you, and we hope you will stand behind your workers,” Johnson said Friday. “This time it is different. We all remember what happened in 2008. This time, we want to make sure as we heal the economic damage that this is causing, that we put the people first.”
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Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus and its impact on global business.