UK coronavirus live: government to support wages and help firms employ people on shorter hours

Andrew Sparrow and Graeme Wearden

from on 2020-09-24 16:17 (#58HAD)

Chancellor announces job support scheme' to subsidise wages of people in work; VAT cut extended for hospitality and tourism sector until end of March

5.13pm BST

Denmark, Slovakia, Iceland and the Caribbean island of Curacao are being removed from the UK's travel corridor list, Grant Shapps, the transport secretary, has announced. That means travellers arriving in England from those countries will (from 4am on Saturday) have to go into quarantine.

Data shows we need to remove DENMARK, SLOVAKIA, ICELAND, and CURACAO from the Travel Corridor list. If you arrive in the UK from these destinations after 4am this Saturday, you will need to self-isolate for 14 days. [1/3]

We will not be adding any destinations to the Travel Corridor list this week. Remember: You MUST complete a Passenger Locator Form by law if you enter the UK. This protects public health and ensures those who need to are complying with self-isolation rules. [2/3]

Also please don't forget that you MUST self-isolate (quarantine) when returning from a non-exempt country, or face fines which start at 1,000. Visit: https://t.co/wQuays1qsN [3/3]

5.04pm BST

Tens of thousands of care home staff and residents are waiting for longer than three days to get coronavirus test results, missing a key government target, official figures show.

Care home managers have raised concerns that the long delays risk leading to more infections among vulnerable residents because potentially infected staff who do not have symptoms will continue working until they receive their result.

Government figures released on Thursday showed that nearly three quarters (72.5%) of so-called satellite tests, the vast majority of which are carried out in care homes, have taken longer than 72 hours to return a result since the government rolled out weekly testing to care homes at the start of September.

4.41pm BST

Scotland's finance minister Kate Forbes says that Rishi Sunak's jobs package doesn't go far enough or provide sufficient clarity for the over 217,000 Scots still on furlough. In a statement Forbes said it was disappointing that these changes don't take into account our current reality of local lockdowns, with no apparent flexibility to support local or national restrictions, or those sectors, like the events sector, that have not yet been able to reopen".

She added:

As I have stressed before, we have responded to Covid-19 without the fiscal levers we require. Not only is the UK government denying us the appropriate financial powers needed to fully respond to the pandemic, it has also removed any clarity about how much funding we will receive by deciding to scrap this autumn's UK budget.

4.38pm BST

Rishi Sunak's scaled-back job support scheme will pull the rug' from under so-called zombie companies' who have been limping along through the pandemic.

So warns Gareth Prince, partner at accountancy firm Begbies Traynor.

Amid difficult circumstances, the Chancellor was under pressure to bridge the gap and avoid a cliff edge once the furlough scheme ends. On the face of it, this new package of measures provides a helping hand to get people back into the workplace on reduced hours. However, the lion's share of responsibility now shifts to the employer who will have to find 55% of an employee's pay for working just one third of their usual hours.

The proposals are clearly designed to support viable jobs and businesses, but will pull the rug from under so-called zombie' companies. It remains to be seen if it is enough to safeguard viable jobs and stem the tide of inevitable redundancies.

4.36pm BST

4.25pm BST

Experts have warned young people must be made aware that while they have a low risk of dying from Covid-19, it can leave them with persistent symptoms that can affect their ability to work and live life to the full, potentially for months.

Speaking at an online meeting of the Royal Society of Medicine, Carolyn Chew-Graham, GP principal in Central Manchester and professor of general practice research at Keele University, said it was crucial that GPs had a way of recording so-called long Covid", noting at present it was difficult to assess how many people were experiencing ongoing symptoms.

Testing is everything for people suffering with long Covid because they have some sort of solid evidence there is something wrong with me and it is not all in my head, and I am feeling these symptoms and I need investigations, and I need care.'

4.11pm BST

This chart, from Capital Economics, shows neatly how the UK's new wage support scheme will cost the Treasury rather less than the furlough scheme, and put more of the burden on companies.

Businesses still effectively have to cover 55% of employment costs for potentially only a third of work being completed. As a result, the scheme is most likely to be used where there has only been a small drop off in work.

3.50pm BST

Credit rating agency Moody's has warned that more UK households will miss mortgage payments in the coming months.

Greg O'Reilly, vice president at Moody's, points out that the UK's mortgage payment holiday ends on 31 October - just as the new wage subsidy scheme begins.

The replacement of the furlough scheme with the emergency job scheme will lead to an increase in missed mortgage payments because it will benefit fewer people,"

Around 10% of securitised prime mortgages were under payment moratorium based on monthly transaction data received in August. So far, maturing payment moratoriums have not resulted in any significant levels of arrears, but this pattern is likely to change starting from end of October, when borrowers will no longer be able to request further payment holidays at the same time that fewer will be eligible for employment support.

3.49pm BST

While Rishi Sunak was holding his press conference, the governor of the Bank of England was welcoming today's measures.

Reuters has the details:

Bank of England Governor Andrew Bailey said on Thursday he strongly welcomed new, scaled-back support for jobs announced by finance minister Rishi Sunak.

I welcome today that once again we've seen that action," Bailey told an online audience from the North East England Chamber of Commerce.

3.48pm BST

Here is our colleague Larry Elliott's take on Rishi Sunak's new job support scheme. The snap judgment from experts was that the winter package would temper the increase in joblessness but little more than that," Larry says.

3.41pm BST

Q: You must have done modelling. How many jobs do you expect to go?

Sunak says he does not have a figure. But other forecasters have come up with figures. And they make for grim reading, he says. That is why he is doing all he can to protect jobs.

3.32pm BST

Sunak says 95% of people who are majority self-employed have received support.

He says the Treasury cannot help people whom it does not know about, people who have not filed a tax return.

3.30pm BST

Q: What is your message to people still on full-time furlough? Should they get another job? And in the summer your message was eat out to help out. What is it now, given that Chris Whitty does not want us to do that?

Sunak says he hopes people on furlough will be able to go back to work.

3.28pm BST

Q: You said the damage to the economy is permanent. Shouldn't the state therefore also become smaller?

Sunak says he did not say the damage to the economy was permanent. He says he said that, because we know Covid will be around for a while, it is necessary to adjust.

3.25pm BST

Q: Don't firms have an incentive now to lay people off?

Sunak says if you look at how the scheme combines with the job retention bonus, there is a powerful incentive to keep people on.

3.23pm BST

Q: Were you given any advice on whether Eat Out to Help Out would contribute to the spread of the virus?

Sunak says what is happening in the UK is similar to what is happening elsewhere. So, he says, he does not think you can attribute a link.

3.22pm BST

Q: Capital Economics say these will cost 5bn. (See 1.29pm.) What is your estimate?

Sunak says the Treasury will publish full costings in the autumn.

Rishi Sunak says the new Job Support Scheme will cost roughly 300m per month per 1 million people on the maximum level of support from the government.

The exact costs will depend on how much take-up for the scheme, and how much hours are supported.

3.17pm BST

Q: How are you going to pay for these measures in the long term?

Sunak says that's an important question. He says it would not be sustainable or affordable to carry on as now. That is why the new support is more targeted.

3.15pm BST

Q: Will you beef up these measures if further restrictions are imposed?

Sunak says he has just announced these measures. The government will see how they work. But he is not ruling out doing more. He says he will continue to respond creatively.

3.14pm BST

Q: Can you say unemployment won't go over 4m? And can you say to people are risk of losing their job they will be able to get a new job by Christmas?

Sunak says he would be lying if he said he knew what would happen. Unemployment is rising and should continue to rise, he says.

3.11pm BST

Q: Some sectors of the economy are restricted, like hospitality. You did not extend the furlough scheme to those sectors. Are those areas where jobs will just have to go?

Sunak says the hospitality sector is not paying any business rates. They have had cash grants of 10,000 or 25,000. There was Eat Out to Help Out. And it has had a VAT cut, which has been extended.

3.09pm BST

Q: People will be very anxious about whether their jobs are viable. We spoke to the owner of a City sandwich firm recently. His trade has fallen by 90%. Are those jobs viable?

Sunak says it is not for him to talk about specific jobs. But he says the economy will change. He can't promise people will always be able to go back to the job they had. He says government measures will help people find new jobs.

3.06pm BST

Q: Will employers really want to hold on to staff?

Sunak says this scheme involves a partnership. The cost of people not working is shared equally between the government, the employer and the employee. We're all in this together," he says.

3.05pm BST

Q: How many jobs can you save? And what jobs are no longer viable?

Sunak says when he launched the furlough scheme, he did not know how many people would take it up. So he can't be sure. But he hopes a large number of jobs can be saved.

3.03pm BST

Rishi Sunak, the chancellor, is holding his press conference now.

He starts by repeating the point he made to MPs earlier, about how Britain needs to adjust to a new normal" because coronavirus will be with use for at least the next six months. (See 12.01pm.)

3.01pm BST

Scotland's national clinical director, Jason Leitch, has confirmed that, because of the ban on household mixing, Scottish students cannot go home to stay with their parents, or to self-isolate there. He issued the clarification with this on Twitter.

Was asked last night whether students in halls and flats can go back to parents' homes. To clarify, they are a separate household. There are exceptions, eg caring responsibilities, but the law is clear: they can't meet indoors with another household - even mum and dad. Sorry.

We are really worried about hundreds of students having to self-isolate in tiny rooms, in unfamiliar cities with people they don't know. Many of them will be first-years who have just moved away from their family networks and the onus really is on the universities and accommodation providers to support them, both for essentials like food and drink, but also with their mental health.

2.57pm BST

In the Commons this morning the equalities minister, Liz Truss, was challenged by a former Tory junior minister on whether she understood the crushing disappointment of trans people" after the government dropped plans to allow people to officially change gender without a medical diagnosis.

Crispin Blunt, Conservative chair of the all-party parliamentary group on global LGBT+ rights, condemned Downing Street's long-delayed response to the 2004 Gender Recognition Act consultation, labelling it an inherently unstable settlement".

2.55pm BST

As promised earlier, here is a summary of the main points in the weekly performance statistics (pdf) from NHS Test and Trace published this morning.

I do sometimes wonder whether people realise just how much of their money the government is ploughing into its #COVID19 test and trace programme.
At 12 billion that's equivalent to 432 for every household in the country.

2.24pm BST

The Institute for Fiscal Studies has put out a press release giving its assessment of the new job support scheme. It's here.

Here's an extract. (Bold type from the original.)

This is a much less generous scheme than the furlough scheme which it is replacing. It will also be much cheaper - though rather remarkably the Treasury has as yet given no indication of actual costs. In October employers have to pay just 20% of an employee's normal wages and that employee need not work at all. From November support will only be available where employees are working at least a third of their normal hours. For an employee working a third of normal hours from November the employer will have to pay 55% of the normal wage costs.

Employees on the scheme will continue to be treated generously. They will receive 77% of their gross salary for doing a third of their normal hours. For most that will translate into well over 80% of their net pay. There will also be more help for the self-employed, likely in the form of another grant; although details are yet to be announced.

2.17pm BST

NHS England has recorded 30 more coronavirus hospital deaths. Those who died were aged between 18 and 101, and all but two of them had underlying health conditions, NHS England says. The details are here.

2.15pm BST

The backlog of criminal cases in magistrates courts increased by 44% compared with last year as the pandemic and lockdown prevented trials going ahead, according to the latest quarterly criminal court figures issued by the Ministry of Justice.

The scale of the challenge facing the courts system during the crisis is underlined by the statistics which show that by the end of June there were 422,000 cases waiting to be heard by magistrates in England and Wales.

2.05pm BST

The events industry is bitterly disappointed that Rishi Sunak hasn't announced targeted help to help them through the next six months.

Chris Skeith, CEO of the Association of Events Organisers, says the 600,000 people employed in the sector across the UK face an existential' threat [currently, only 6 people who don't live together are allowed to socialise, and weddings are limited to 15 guests].

The chancellor's proposals today fail to provide the support the UK events sector desperately needs. Given that no UK events are permitted to take place until March 2021 at the earliest, a wage subsidy is of little use to events businesses that are not able to trade at all and the sector is facing an existential threat to its viability.

Without targeted action the future looks bleak for a sector that employs 600,000 people across the UK, with widespread business insolvencies and job losses a certainty. This is a desperate day for the industry.

1.59pm BST

From Paul Johnson, director of the Institute for Fiscal Studies

One of the stranger aspects of today's announcements was that they came with no price tag attached. I can't recall another occasion on which a Chancellor has made such major spending decisions without saying how much they would cost.

1.57pm BST

1.56pm BST

Nadia Whittome, one of the three Labour MPs who lost her shadow junior frontbench role after defying the party whip at the second reading of the overseas operations bill, has released a statement justifying her actions with an emotive attack on the party's leadership. She said:

This morning the leader of the opposition's office called me to confirm that I have been stood down from my role.

I opposed the bill because it effectively decriminalises torture and makes it harder for veterans to take legal action against the government.

1.52pm BST

The Treasury has now published its full Winter Economic Plan" document (pdf). There are only eight pages of text, but with a lot of white space they have padded the pdf out to 16 pages.

1.52pm BST

Companies will not be allowed to use the government's new Job Support Scheme to subsidise the wages of staff who are being made redundant.

And large companies who tap the scheme are discouraged from also handing money onto their shareholders, though dividends or share buybacks.

To support viable UK employers who face lower demand due to COVID-19, and to keep their employees attached to the workforce, the government will be introducing a new Job Support Scheme from 1 November 2020. Employees will need to work a minimum of 33% of their usual hours.

For every hour not worked the employer and the government will each pay one third of the employee's usual pay, and the government contribution will be capped at 697.92 per month. Employees using the scheme will receive at least 77% of their pay, where the government contribution has not been capped. The employer will be reimbursed in arrears for the government contribution. The employee must not be on a redundancy notice.

Two significant things not announced in Rishi Sunak's speech - but soon to be out. You won't be able to fire anyone who's on the new Jobs Support Scheme. And there'll be restrictions on companies paying out to shareholders (eg share buybacks) while they're using it.

1.46pm BST

Coronavirus outbreaks at universities across Scotland, with more than a thousand students currently self-isolating, dominated FMQs.

Confirming a further 465 infections, Nicola Sturgeon said that a large part" of the 219 cases in Greater Glasgow and Clyde health board reflected the significant cluster in student accommodation at Glasgow University.

1.43pm BST

And here is some reaction to the announcement from business groups.

From Dame Carolyn Fairbairn, director general of the CBI

These bold steps from the Treasury will save hundreds of thousands of viable jobs this winter. Wage support, tax deferrals and help for the self-employed will reduce the scarring effect of unnecessary job losses as the UK tackles the virus. Further business rates relief should remain on the table.

These new measures should bring some relief to many directors fearing a harsh winter for their businesses and people. As the virus wears on, the Treasury is right to seek a balance between protection and adjustment.

However, at first blush it's not yet clear how much the job support scheme will help hard-pressed firms hold onto staff. The chancellor may also have missed a trick by not combining the Scheme with measures to encourage wider job creation, for instance by lowering employment costs through reduced employers' NICs.

The measures will give business and the economy an important shot in the arm.

There are many measures to welcome here that will make a real difference. It's particularly encouraging to see that all small businesses will be able to access the new job support scheme without facing excessive paperwork, with a guarantee of help for the next six months.

The priority right now has to be saving as many jobs as possible and this is a bold and brave move which industry will welcome.

This new package will provide much-needed support for employees across our industries who are facing serious challenges.

1.31pm BST

Here is some reaction to the Sunak statement from trade unions.

From Frances O'Grady, general secretary of the TUC

This scheme will provide a lifeline for many firms with a viable future beyond the pandemic.

But there's still unfinished business. Unworked hours under the scheme must not be wasted. Ministers must work with business and unions to offer high-quality retraining, so workers are prepared for the future economy.

These measures show the Chancellor has been listening to unions and businesses. Supporting the wages of workers is an important first step in the battle to protect jobs across the UK.

Any support for jobs and key industries during this unprecedented global pandemic is to be welcomed. However, the chancellor's measures are akin to using a plaster to cover a gaping wound.

We have called for bold action from government and remain concerned that six months is too short to really stabilise businesses and jobs, which so badly need support and would like clarity over who decides which businesses are viable.

We are pleased that the chancellor has eventually stepped back from the cliff-edge ending of the jobs retention scheme and we will study the details of the new jobs support scheme.

However we are very disappointed that he made no mention of the deep difficulties the retail industry faces.

1.29pm BST

Capital Economics has estimated that Rishi Sunak's measures could cost 5bn ... and warned that they probably won't stop the UK economy stagnating in the last three months of 2020.

Its UK economist, Ruth Gregory, fears the package will only cushion the blow" from Covid-19.

This means that the total cost of the government's Covid-19 support could be in the region of 200bn (8.9% of GDP).

Once you add in the adverse effects on the public finances from the weak economy, the result could be that the chancellor ends up borrowing a whopping 370bn (18.4% of GDP) in 2020-21. That could push up the debt to GDP ratio from 88.4% in 2019-21 to 102%.

Independent assessments eg Capital Economics - saying this is a 5bn package altogether - the jobs support scheme about 3bn

1.20pm BST

These are from Torsten Bell, chief executive of the Resolution Foundation, a thinktank focusing on income inequality.

He says Rishi Sunak's scheme will not incentivise all employers to minimise job losses by cutting hours - because for some of them it will be cheaper to keep fewer staff on full time.

Chancellor's Job Support Scheme is a big deal that will (temporarily) stem but not halt the rise in unemployment coming. A thread...

This is basically an extension and reformatting of the partial furlough bit of the Job Retention Scheme. So long as a worker is brought back for a 1/3 of their previous hours, the govt covers 1/3 of their lost wages for hours they don't work. The employer covers another 1/3

The odd thing about this scheme (given all the short time working headlines/references to Germany) is not really a short hours work scheme (ie one that encourages employers to cut hours rather than jobs) when considered in isolation

The scheme on it's own WILL NOT encourage firms to cut hours rather than jobs because the 1/3 employer contribution means it is much cheaper for firms to employ 1 person full time than 2 people part time

BUT interaction with the 1000 Job Retention Bonus is REALLY important here. When this new scheme is combined with that we've now got a big incentive for firms to retain workers part time UNTIL you qualify for the bonus ie the end of January is the new end of October cliff edge

After January this scheme will not be effective at encouraging firms to hold onto workers in the sectors that are hardest hit (ie hospitality/leisure) - the employer contribution is just too high.

What should the Chancellor have done? Scrap the badly designed and too expensive job retention bonus and used the 9bn saved to provide much clearer and lasting incentives for firms to retain workers beyond January - this crisis is not going to be remotely done by then

Summary: Chancellor has rightly brought economic policy back into line with the reality that covid restrictions are here to stay. The policy is a big deal and will slow the rise in unemployment, but the design means it's big effect is to shift the jobs cliff edge to end January

1.12pm BST

This is from John McDonnell, the former Labour shadow chancellor.

It's clear from Sunak's announcement today that the Tories are wiling to countenance large numbers of job losses. Clearly they believe it's a price worth paying. This is archaic economics when a Marshall style plan is needed from government to aim for a full employment economy.

12.58pm BST

In the Commons Sajid Javid, Rishi Sunak's predecessor, praises Sunak for his decisiveness, resilience and creativity". He asks when the infrastructure investment plan will be published.

Sunak thanks Javid. He says he learnt much from working for him in two government departments. The infrastructure plan will be published in the autumn, he says.

12.50pm BST

12.49pm BST

This is from Sky's Tom Boadle, quoting from the Treasury briefing on the new job support scheme. The grant per worker will be capped at 697.92 per month, it says.

The Job Support Scheme will be capped at 697.92 per month.

Here's the Government's "support for workers" in full: pic.twitter.com/jALDpyavhr

12.41pm BST

Paul Johnson, the head of the Institute for Fiscal Studies think-tank, says Rishi Sunak's new support package won't prevent many furloughed workers from being laid off.

Johnson fears that many jobs will now be lost once the furlough scheme ends in October, because struggling companies can't justify bringing them back part-time.

This is a v big change from furlough. Less generous. Only open to those who are working a third of normal hours. Understandable given need to adapt as economy changes. Can't pay all wages forever. But a lot on furlough now likely to lose their job. https://t.co/lFBEgKtlnP

12.40pm BST

Back in the Commons Stephen Crabb, the Tory former work and pensions secretary, asks for an assurance that the increase to universal credit announced at the start of the crisis will be made permanent.

Sunak avoids giving that commitment, although he stresses what the government has done already, and he says that a Treasury distributional impact assessment published earlier in the year showed that low income families were benefiting most from its support measures.

12.37pm BST

This is from Frances O'Grady, the TUC general secretary.

1/2 Unions have been pushing hard for jobs support to continue. We are pleased @RishiSunak has listened and done the right thing. This scheme will provide a lifeline to firms with a viable future beyond the pandemic https://t.co/POPxS9hnTs

12.37pm BST

Here is the Treasury summary of today's announcement.

12.33pm BST

The CBI has welcomed Rishi Sunak's job support package.

CBI director-general Carolyn Fairbairn (who joined the photocall outside 11 Downing Street with the chancellor this morning) says it should save hundreds of thousands of jobs.

These bold steps from the Treasury will save hundreds of thousands of viable jobs this Winter.

It is right to target help on jobs with a future, but can only be part-time while demand remains flat."

12.27pm BST

Alison Thewliss, the SNP Treasury spokeswoman, says Sunak did not tell the finance ministers in the devolved administrations he was cancelling the budget. Does he realise what impact this has on those administrations, which need to know what is in the UK budget?

Sunak says the chief secretary to the Treasury regularly speaks to the devolved administrations. But he says there is no reason why the UK government has to set its budget before they set theirs.

12.26pm BST

Having warned that he cannot save every business or every job threatened by the pandemic, Rishi Sunak has outlined a four-point plan to help the economy through a tough winter.
1) A new wage subsidy scheme, to encourage struggling firms to keep people on short-term hours [corrected], rather than making them redundant.

It's designed to protect viable jobs over next six months after the furlough scheme ends in October. Employees must work at least one third of their hours, and be paid for them.

What Sunak's talking about is essentially sharing what work there is around, in firms facing slump in demand. New scheme covers people working at least 1/3 of their normal hours, govt tops up 2/3 of wages for the missing hours (ie pay cut but still got a job)

Jobs Support Scheme -

Applies to all small and medium firms
Can apply to big firms who prove turnover has fallen
Staff must work a third of their hours a week
Employer and government make up wages to two thirds
Scheme will last for 6 months

12.20pm BST

Sunak is responding to Dodds.

He says Labour has repeatedly changed its position on extending the furlough scheme. He says that is not the sort of consistency that business needs.

12.13pm BST

Anneliese Dodds, the shadow chancellor, is responding for Labour.

She says Labour has repeatedly called for an extension of wage support beyond October.

12.11pm BST

Sunak says Britain can no longer go on putting its life on hold.

The country must learn to live with coronavirus, he says.

Today's measures mark an important evolution in our approach. Our lives can no longer be put on hold. Since May we have taken steps to liberate our economy and society.

We did these things because life means more than simply existing. We find meaning and hope through our friends and family, through our work and our community.

12.09pm BST

Sunak says the VAT cut for hospitality and tourism has been extended to the end of March next year.

The final step I'm taking today will support two of the most affected sectors, hospitality and tourism.

On current plans, their VAT rates will increase from 5% back to the standard rate of 20% on January 13.

To continue supporting over 150,000 businesses and protect 2.4 million jobs, the Government has extended the 15% VAT cut for the tourism and hospitality sectors to the end of March next year. pic.twitter.com/5s5UMyqZSD

12.08pm BST

Sunak is announcing the extension of other loan and support schemes.

The Self-Employment Income Support Scheme extension will supportviable traderswho are facing reduced demand over the winter months, covering 20 per cent of average monthly trading profits via a government grant. pic.twitter.com/76LSZbfyE8

1/More than one million businesses which have borrowed under the Bounce Back Loan Scheme will be offered the choice of more time and greater flexibility for their repayments pic.twitter.com/NsXu9Z2yZf

2/Lenders have been enabled to offer Coronavirus Business Interruption Loan Scheme borrowers more time to make their repayments where needed.

The application deadline for all coronavirus loan schemes - including the future fund - has been extended to 30 November ensuring even more businesses can benefit from government-backed support. pic.twitter.com/lVHdqNzpaZ

I am extending the existing self-employed grant on similar terms and conditions as the new jobs support scheme ...

This means loans can now be extended from six to 10 years, nearly halving the average monthly repayment.

Businesses who are struggling can now choose to make interest-only payments and anyone in real trouble can apply to suspend repayments all together for up to six months.

12.05pm BST

Sunak says the government has never tried anything like this.

From 1 November, for the next six months, the Job Support Scheme will protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19. pic.twitter.com/8NpIKpQV8y

12.05pm BST

Sunak says in the spring the problem was that businesses were closed.

Now the problem is different. Businesses are open. But their future is fragile.

The government will directly support the wages of people in work, giving businesses who face depressed demand the option of keeping employees in a job on shorter hours rather than making them redundant.

The jobs support scheme is built on three principles.

First, it will support viable jobs. To make sure of that employees must work at least a third of their normal hours and be paid for that work as normal by their employer. The government, together with employers, will then increase those people's wages covering two-thirds of the pay they have lost by reducing their working hours, and the employee will keep their job.

12.01pm BST

Sunak says he will explain what is being done to protect jobs during the winter.

But the rationale for this stage is different from what came before.

Our economy is now likely to undergo a more permanent adjustment. The sources of our economic growth and the kinds of jobs we create will adapt and evolve to the new normal.

And our plan needs to adapt and evolve in response. Above all, we need to face up to the trade offs and hard choices coronavirus presents and there has been no harder choice than to end the furlough scheme.

11.58am BST

Sunak starts by saying the PM set out the next stage of the government's health response to Covid. Today Sunak will set out the next stage of the economic response, he says.

He says the balance the need to protect jobs against the need to fight the virus.

11.54am BST

Rishi Sunak, the chancellor, is about to deliver his Commons statement on his winter economy plan.

11.53am BST

NHS Test and Trace (to use its official name, although critics say it should be called Serco Test and Trace) has published its weekly performance statistics (pdf).

These are from Sky's Ed Conway. I will post more on the data after Rishi Sunak's statement, which is starting very soon.

Latest #COVID19 test and trace figs. Prob the best measure of the positivity rate.
It actually barely rose in the week to Sept 16. Up from 3.2% to 3.3%.
But (big but) pillar 1 positivity is rising fast (and that's poss a better measure)
And this is a v backward looking measure pic.twitter.com/FF8XPPQN74

Ugh. Further evidence of the woes of test/trace.
Percentage of people are getting their #COVID19 results within 24 hours in week to 16 Sep:
- Regional test sites: 8.4%
- Local test sides: 10.4%
- Mobile testing units: 17.3%
- Satellite test centres: 0.7%

11.31am BST

More than a million days of work were lost in the NHS in England due to coronavirus-related sickness between March and May, according to new official figures.

The figures, released by NHS Digital, show that 1.3m full-time equivalent (FTE) days were lost due to Covid-related sickness absence in those three months.

11.28am BST

This morning Matt Hancock, the health secretary, said that almost 10,000 people a day in the UK may be contracting coronavirus. Yesterday 6,178 new cases were reported, but not everyone with the virus gets tested.

But Dr Julian Tang, honorary associate professor of respiratory sciences at the University of Leicester, has said that the number of new cases is likely to be higher than Hancock suggested.

So the symptomatic cases that go for PCR [polymerase chain reaction] testing may only constitute just one-third of Covid-19 cases.

11.21am BST

Bus drivers need more help over the wearing of face coverings as fines against passengers ignoring the law are vanishingly rare", according to a leading union. As PA Media reports, Unite warned that new penalties for people refusing to wear a mask may make little difference" unless enforcement is properly resourced. The union, which represents more than 70,000 bus drivers across the UK, said its research suggested that just 38 fines or fixed penalty notices were issued outside London in the three months to August, and 368 in the capital.

11.19am BST

Rishi Sunak will hold a press conference this afternoon, No 10 has announced.

11.17am BST

A race equality action plan designed to tackle the structural and systemic racism" found to have contributed to the high Covid death rate among black, Asian and minority ethnic people in Wales is under way and will be complete early next year.

A report published earlier this year said that long-standing racism and disadvantage was a major reason behind so many people from BAME backgrounds falling critically ill.

We have to look carefully and honestly at the structures and systems in society.

Our work to develop a race equality action plan is already under way, and will provide the foundation for bringing about systemic and sustainable change for Wales.

11.14am BST

On budget day it's traditional for the chancellor to pose for a photograph outside No 11 with his red box and his Treasury team. There is no red box today, but there does seem to be a winter economy plan document, which Rishi Sunak was holding when he had his picture taken in Downing Street a few minutes ago.

Much more interesting was his decision to stage the photocall with Frances O'Grady, general secretary of the TUC, and Carolyn Fairbairn, director general of the CBI. The Treasury has been consulting both organisations ahead of today's announcement. That in itself is not particularly unusual, but to get both of them to sign up to pre-announcement endorsement-by-photocall is striking.

10.46am BST

These are from Matt Hancock, promoting a video about the NHS Covid-19 app just launched for England.

We've worked extensively to develop an app that's secure, simple to use & will help keep us safe.

This is an important step in our fight against #coronavirus & I urge everyone who can to download the app to protect themselves & their loved ones.https://t.co/wnfauZx9GK

1/2 pic.twitter.com/OHAR048XuQ

If you are able to download the @NHSCovid19app, please make sure to do so here:https://t.co/c4Ek4IitYs https://t.co/8oI9VIpSdf

2/2

10.27am BST

The ONS has this morning published a useful coronavirus article - Covid-19 in 10 charts.

Here are three of the most striking.

10.10am BST

The Covid crisis has left businesses little time to plan for Brexit with just 38% saying they have done a risk assessment for the change in trading conditions next January, the British Chambers of Commerce has said.

It said the government has addressed just nine of the 35 issues which apply to businesses, deal or no deal, with no clarity on food labelling, replacement of EU funding or rules of origin.

While we recognise that some of the questions facing businesses are subject to ongoing negotiations between the government and the EU, other matters are within the UK's hands. The government must ramp up engagement with business urgently.

10.08am BST

In his interview with Sky News Matt Hancock, the health secretary, was also asked if he could clarify whether or not the government was trying to stop casual sex on the grounds that it poses a Covid health risk. The question has been raised by recent updated guidance saying that people who do not live together but who are in an established relationship" don't need to self-isolate.

Hancock did not want to be drawn on what was and wasn't an established relationship, and just stuck to the guidance. He told Sky's Kay Burley:

I think we should stick to the letter of it, which is it is okay in an established relationship. It just means that people need to be careful, they need to be sensible.

If you're in a relationship that is well established ... what it means is people realising that coming into close contact with people from other households, then that is how the virus spreads.

The health secretary is asked, 'how long will the ban on casual sex last?'

Matt Hancock says sex is "okay in an established relationship" but adds people need to be "careful".

Latest updates on #coronavirus: https://t.co/nRkk2nNJlG pic.twitter.com/yLhLEWldoQ

10.00am BST

Matt Hancock, the health secretary, was doing the morning interview round for the government to promote the new contact-tracing app launched in England.

He said that, although people advised by the app to self-isolate because they had been close to a person testing positive should follow that advice, it was not a legal requirement - unlike an instruction from NHS Test and Trace. He told Times Radio:

If the app tells you to self-isolate, then you should self-isolate. But if an NHS Test and Trace contact tracer tells you, then you must by law.

9.44am BST

According to a report in the i, government scientists think students might have to stay at university at Christmas, instead of going home, to reduce the risk of their spreading coronavirus to their relatives and local communities.

Asked if this would happen, Matt Hancock, the health secretary for England, told the Today programme this morning that he was not ruling it out. He said:

I don't want to have a situation like that, and I very much hope we can avoid it.

I've learned not to rule things out. And one of the challenges we have is making sure that people are as safe as possible and that includes not spreading between the generations, but ... this is not our goal.

I would like them to think very, very carefully about weekends at home, and think about how they can make that as safe as they can.

I think we will have to take a view in the next couple of months about what we do at Christmas time.

9.26am BST

Nicola Sturgeon has written to Boris Johnson calling for urgent four-nation talks to reach a UK-wide consensus on tightening restrictions ever further.

More detail from Nicola Sturgeon's letter to Boris Johnson emerged overnight, in which she writes:

While all four governments announced new restrictions yesterday, there is clearly a significant strand of scientific opinion to the effect that bringing R back below one and the virus back under control will require measures beyond those which any of us have so far announced. In my view, there is considerable force in that opinion.

We've been battled Covid, because of the devolution settlement, with one hand tied behind our backs. Without a UK budget this year we'd have both hands tied behind our backs ...

At a time of unprecedented change my counterparts in Wales and Northern Ireland and myself are absolutely clear that to be expected to set budgets in the devolved governments for the NHS, local governments, tax rates, without information from the UK government just does not understand the challenges.

9.14am BST

Almost 10,000 people a day in the UK are contracting coronavirus, the health secretary, Matt Hancock, has warned, as Scotland's first minister requested urgent talks with the UK government to consider further tighten social restrictions. My colleague Jessica Elgot has the story here.

9.09am BST

Good morning. Rishi Sunak is today announcing what he calls his winter economy plan, which will explain what will be done to support jobs and businesses when the furlough scheme runs out at the end of next month. He has also cancelled the budget due in the autumn (by my count, the fourth time the Boris Johnson government has postponed a budget) and today's announcement is being seen as budget-like in its importance. In fact, it will probably turned out to be much bigger. In a normal year, a budget is seen as far-reaching if it cuts or increases spending by 5bn or more. The furlough scheme, announced outside a budget, has cost the Treasury 39bn.

But that's just a fraction of the overall cost of the Covid crisis to the exchequer. Today the Institute for Government thinktank has published a report saying Covid-19 is already likely to cost the UK government 317bn - in increased public borrowing - in 2020/21 alone." This chart explains where those numbers come from.

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