The resurgence of coronavirus poses a threat to the UK’s “fragile” economic recovery, the UK chancellor Rishi Sunak warned as he confirmed plans for the state to top up the wages of workers forced to cut their hours due to the pandemic.
As part of a package of measures Mr Sunak said the new jobs support scheme was aimed at protecting “viable” roles rather than all posts which have been kept going as a result of state support under the furlough programme.
Under the terms of the new scheme, the Government will top up the wages of people working at least a third of their normal hours.
They will be paid for that work as normal, with the state and employers then increasing those wages to cover two-thirds of the pay they have lost by working reduced hours.
He also extended the self-employment income support scheme and 15% VAT cut for the hospitality and tourism sectors, and help for businesses in repaying government-backed loans.
Mr Sunak delivered his plans in the House of Commons, but Prime Minsiter Boris Johnson was not there to support him as he was visiting police recruits in Northamptonshire.
Downing Street denied speculation about a rift between at the top of Government, insisting there was “absolutely not” a problem between Mr Johnson and Mr Sunak.
The Chancellor told MPs: “The resurgence of the virus, and the measures we need to take in response, pose a threat to our fragile economic recovery.”
And he acknowledged “we can’t save every business” and “we can’t save every job”.
Jobs lost. Unions have accused Mr Sunak of using a plaster to cover a “gaping wound” while jobs have already been lost.
Mark Serwotka, general secretary of the Public and Commercial Services union said the furlough scheme should have been extended beyond next month.
He claimed the Conservatives have put “ideological opposition” to state intervention over saving jobs.
Any support for jobs and key industries during this unprecedented global pandemic is to be welcomed,” he said.
“However, the Chancellor’s measures are akin to using a plaster to cover a gaping wound.
“Our members in the commercial sector, aviation and culture are already being threatened with hundreds of redundancies, as employers seek to capitalise on the economic fallout from Covid-19.
“The Tories’ ideological opposition to increased state intervention is hurting the economy and costing people their livelihoods right now.”
Better late than never but the Government’s indecision has already seen jobs lost in droves
Transport Salaried Staffs Association (TSSA) leader Manuel Cortes said: “Better late than never but the UK government’s indecision has already seen jobs lost in droves and caused huge needless anxiety among millions of workers.
1/ The Job Support Scheme will directly support the wages of people in work, giving businesses who face depressed winter demand the option of keeping employees in a job on shorter hours rather than making them redundant. pic.twitter.com/Gj4HRyvdUq
— Rishi Sunak (@RishiSunak) September 24, 2020
“The Chancellor said they will target support at ‘firms who need it the most’.
“That must be fine-tuned so that the jobs of our members in the travel trade are saved and high-street travel shops don’t become a thing of the past. We will all need a holiday once the pandemic has passed.”
He added: “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.”