Ministers have come under fire for the speed of their response to help workers amid the coronavirus outbreak, as a Tory former business secretary warned firms are making "irreversible" decisions.

Greg Clark insisted businesses are "facing a crisis" as revenue is "collapsing", and he added the Government's £330 billion guarantee scheme - which includes loans - provides "no reason to keep staff employed".

He said "large numbers of people will be unemployed" if the Government does not act immediately, with the MP suggesting the nation should be "paying the wages" of people for the next few weeks in order to prevent redundancies.

Conservative former work and pensions secretary Iain Duncan Smith also suggested changing benefit rates and reducing waiting times to offer assistance to people via Universal Credit, with the Government saying it as looking at "all the options".

Asking an urgent question in the Commons, Mr Clark said of businesses: "With revenue collapsing and no knowledge of when normal trading can resume, they see no choice but to lay off workers now.

"The loan scheme the Chancellor announced on Tuesday is not enough to prevent that.

"These businesses have no idea when they will be able to pay back the debts that they would incur.

"It provides no reason to keep staff employed. In fact the reverse - because the smaller the wage bill, the less would have to be borrowed.

"On Tuesday, the Chancellor promised there would be employment support but as each day goes by, businesses are making decisions that will be irreversible.

"If the Government does not act immediately, large numbers of people will be unemployed.

"Registering them will put huge pressure on the welfare system.

"Vital skills will be lost and good businesses will cease trading, who themselves will be the customers and suppliers of other businesses."

Mr Clark said all employers have an account with HMRC to pay tax for employers through pay as you earn (PAYE).

He explained: "The monthly wage bill is known to HMRC.

"Instead of firms paying PAYE to the Government, that flow should now be reversed with the nation paying the wages of people for the next weeks if, and only if, they continue to employ their staff.

"Separate arrangements would need to be made for the self-employed but at a stroke, this would save people's jobs, save businesses and put an immediate end to the risk of contagion and help save the economy."

Treasury minister John Glen responded: "I recognise that the package of measures that we've put out with respect to statutory sick pay, easier access to Universal Credit and ESA, the business rates relief, the small business grant facility, the local authority hardship funds, and the HMRC forbearance measures, will for some not feel at this point sufficient.

"But (Mr Clark) will also know from his experience in government, that it's very important that when the Government announces the measures that we wish to take to assist with supporting employees, that they need to be effective and work."

For Labour, shadow Treasury minister Peter Dowd said: "People are asking us why Denmark had its first coronavirus case on February 27 and New Zealand its first case on February 28, four weeks after our first case, so why have Denmark and New Zealand announced comprehensive job protection plans though they had their first cases four weeks after us - while we've announced nothing to secure people's jobs and wages?"

Mr Glen said the UK is "looking at the furlough system" and proportion of support available while also examining other systems around the world.

Asked by the SNP about a universal basic income scheme, Mr Glen said the Government is "looking at that", before adding: "The issue there is will it help the most affected most urgently?

"Many of us in this House, for example, would not require such support and we've got to make sure we target at the most vulnerable."