UK unveils new six-month virus jobs support scheme

By: AFP      Published: 07:11 PM, 24 Sep, 2020
UK unveils new six-month virus jobs support scheme
Britain's Chancellor of the Exchequer Rishi Sunak presents his Winter Economy Plan in the House of Commons in London on September 24, 2020. AFP

British finance minister Rishi Sunak on Thursday launched a new coronavirus jobs protection scheme that will support wages of staff keeping at least one third of their usual working hours.

Beginning in November, it does not go as far as the current furlough scheme due to end next month that has paid out billions of pounds to support wages of almost ten million workers.

"As I've said throughout this crisis, I cannot save every business," Chancellor of the Exchequer Sunak told parliament as he unveiled the new scheme. "I cannot save every job. No chancellor could. But what we can and must do is deal with the real problems businesses and employees are facing now," Sunak added.

Under the new jobs protection scheme, employers will pay a third of salaries earned by workers on reduced hours. The government and employers will top up wages to cover the remaining lost pay.

To keep the UK economy alive and keep people in jobs during the pandemic, the government's furlough scheme has paid the bulk of wages for millions of workers.

Analysts warn that Britain faces soaring unemployment despite the new support as many businesses cannot afford to keep staff, even on reduced hours. Sunak's update comes on the day Britons began facing new restrictive measures -- including early closing times for pubs and restaurants.

Conservative Prime Minister Boris Johnson this week called on Britons to work from home as the country faces a spike in virus cases, hurting city-centre services.

His call comes as businesses were just starting to get back on their feet after a three-month nationwide lockdown earlier this year.

'Fact of life'

"It is now clear, as the prime minister and his science advisers have said, that for at least the next six months the virus and restrictions are going to be a fact of our lives," Sunak added Thursday. "Our economy is now likey to undergo a more permanent adjustment," he warned.

British gross domestic product (GDP) shrank by a fifth in the second quarter, more than any European neighbour, after the March 23 lockdown plunged the country into its deepest recession on record.

While retailers, hospitality and travel groups have been at the forefront of slashing tens of thousands of jobs during the pandemic and despite furlough support, supermarkets have created lots of new ones to meet a surge in online food demand.

Britain on Wednesday meanwhile recorded 6,178 new virus cases -- the highest daily increase since May 1.

The government's top medical advisers had warned that the country could see up to 50,000 coronavirus cases a day by mid-October, and a month later exceed 200 deaths every day if nothing was done. Almost 42,000 people who have tested positive for Covid-19 have died in Britain, the worst death toll in Europe

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