Coronavirus: New protections for workers with jobs threatened by virus expected in chancellor announcement

Labour calls on government to underwrite wages to prevent redundancies due to Covid-19

New protections for jobs and wages are expected to be unveiled on Friday by chancellor Rishi Sunak, amid growing clamour for support for workers whose livelihoods are threatened by the coronavirus crisis.

Labour released its own plan for the state to underwrite up to 90 per cent of wages in return for a guarantee from employers that they will not lay off staff.

As Boris Johnson issued a plea for bosses to “stand by your workers”, shadow chancellor John McDonnell accused the government of being “too slow in developing a plan to keep people in work”.

Mr Sunak was locked in talks with businesses and unions until late on Thursday in the hope of producing a package to bail out workers in the same way the government has already offered help to companies, mortgage-holders and rental tenants.

The Treasury was keeping tight-lipped about the content of the proposed scheme, as wrangling continued about details of the plan.

But business chiefs are expecting a package of German-style measures under which employers can claim a percentage of workers’ pay back from the state, with sick pay extended to parents and carers impacted by school closures.

CBI director general Carolyn Fairbairn said the situation required “an urgent, bold new approach to protect pay and livelihoods”.

Speaking on Thursday evening after a day of talks with the TUC, CBI, British Chambers of Commerce and Federation of Small Businesses, Mr Sunak said: “We are working round the clock to deliver further support to individuals and families whose jobs and incomes will be affected by Covid-19 – and to do so urgently.

“We are in this together, and will all have to play our part which is why today’s meeting was so important.”

Mr Johnson told a Downing Street press conference: “To everybody in the UK business world, everybody who is worried about their jobs and everybody who faces difficulties because of the advice that we are giving, I say to business – ‘Stand by your employees, stand by your workers because we will stand by you’.”

Labour’s package envisages the government underwriting 90 per cent of wages in the lowest income bands, 85 per cent in a middle band and 80 per cent at a higher level, with a cap excluding the highest earners.

Employers would be required to contribute the remainder of wages and payments would go direct to workers, with no loss of rights such as paid holiday.

Meanwhile, the party called for urgent reforms to extend statutory sick pay to all low-paid workers, part-timers and those on zero-hours contracts and equivalent compensation for the self-employed.

Mr McDonnell said: “The government has been widely criticised, including by Conservative MPs, for being too slow in developing a plan to keep people in work.

“This is a plan that will help secure people’s wages, welfare and well-being in a time of real uncertainty.”

Mr Johnson faced a Tory revolt in the House of Commons over his failure to protect millions of workers from redundancy during the coronavirus crisis.

Former cabinet minister Greg Clark warned that the government’s loan scheme was “not enough” to stop companies making “irreversible” decisions, adding: “If the government does not act immediately, large numbers of people will be unemployed.”

The independent Joseph Rowntree Foundation issued a list of recommendations to assist people on low incomes, including a rise in the £94-a-week statutory sick pay to two-thirds of full-time earnings up to the National Living Wage (around £219) and 75 per cent state cover for the wages of those who see their jobs or hours cut due to falling demand.

Helen Barnard, of the JRF said: “We must free people who are already struggling to get by from the fear, anxiety and restrictions imposed by poverty in these uncertain times.”

Speaking after talks at the Treasury, TUC general secretary Frances O’Grady said: “The TUC and unions stand ready to work with government and employers to protect jobs and livelihoods across the UK.

“As well as providing emergency support to business, it is essential that money goes into workers’ pockets now. We must do whatever it takes to stop businesses going to the wall and workers being plunged into poverty.”

And Ms Fairbairn said: “Firms will do all they can to help employees through these unprecedented times.

“But the exponential growth of the economic impact requires an urgent, bold new approach to protect pay and livelihoods. The chancellor’s commitment to go further at speed is right – together we must deliver it within days, not weeks.”