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UK to continue picking up wage bill of shut companies: Sunak
The state will pay two-thirds of the wages of employees of companies forced to close due to the curbs up to maximum of £2,100 a month.
Chancellor Rishi Sunak on Friday announced another extension and expansion of the job support scheme that was due to be wound down later this month, benefiting companies and millions of employees, after a surge in Covid-19 cases prompted new curbs across the UK.
The treasury department has already borrowed billions of pounds to fund the scheme, along with others aimed at companies and the self-employed. The state will pay two-thirds of the wages of employees of companies forced to close due to the curbs up to maximum of £2,100 a month.
As several unions and industry bodies welcomed the move, Sunak said: “Throughout the crisis the driving force of our economic policy has not changed. I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.”
“The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.”
As of Friday evening, 17,540 new Covid-19 cases were recorded across the UK, thrice the daily peak in April and May; there were 77 deaths in the last 24 hours, as hospitals reported rising admissions.
In addition to scheme’s expansion, Sunak increased the cash grants to businesses in England shut in local lockdowns to support with fixed costs. These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to up to £1,500 every three weeks that was available previously.
“This could benefit hundreds of thousands of businesses, including restaurants, pubs, nightclubs, bowling alleys and many more”, officials said. The new package is considered more generous than the earlier one implemented since April.
The announcement came soon after new official figures showed Britain’s economic recovery from the Covid recession was already slowing before the launch of new restrictions in the autumn. GDP rose by 2.1% in August, falling short of forecasts of a growth rate of 4.4%, despite a boom in consumer spending at hotels, pubs and restaurants fuelled by Sunak’s popular Eat Out to Help Out scheme in August.
Caroline Fairbairn of the Confederation of British Industry said: “The steep rise in infections in some areas means new restrictions to curb numbers feel unavoidable. The chancellor’s more generous job support for those under strict restrictions should cushion the blow for the most affected and keep more people in work.”
“But many firms, including pubs and restaurants, will still be hugely disappointed if they have to close their doors again after doing so much to keep customers and staff safe.”
Frances O’Grady of the Trade Union Congress added: “This scheme will protect jobs in businesses forced to close by local restrictions, but ministers still need to do more to stop the devastation of mass unemployment”.
“Firms which aren’t required to close but will still be hit by stricter local restrictions need a more generous short-time working scheme, and there needs to be extra help for self-employed people in local lockdown areas too.”
