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Rishi Sunak is expected to announce a license extension beyond December amid mounting pressure from business leaders to safeguard jobs and the economy during the second wave of the coronavirus.
The chancellor is preparing to announce that the flagship wage subsidy scheme, which pays for 80% of workers’ wages, will continue to be available to parts of the country under the highest levels of Covid restrictions, the sources said, in a significant decline for the government.
In a double-headed fight to keep unemployment from spiraling out of control amid rapidly growing Covid infections, Sunak is scheduled to deliver a Commons statement on Thursday, a few hours after the Bank of England is expected. launch a new £ 100bn stimulus package.
The chancellor’s announcement comes after Britain’s top business lobby group and the main union body joined forces to call for the leave to be extended until spring.
Demanding an extension in wage support as nationwide lockdown measures take effect in England for the second time this year, the heads of the Confederation of British Industry and the Trade Union Congress said urgent action was needed to avoid a tsunami of job losses.
Carolyn Fairbairn, CBI CEO, and Frances O’Grady, TUC Secretary General, said the coronavirus job retention scheme (JRS), which pays 80% of the salaries of licensed workers, should be extended to spring to help businesses. and workers during a difficult winter.
In a tweet late Wednesday, Fairbairn said: “As closing shutters close for many companies, extending the license until next spring is the right thing to do. Businesses and employees need more certainty and stability to plan and recover; an extension of JRS will help ”.
O’Grady said an extension of support for workers and the self-employed through the spring was vital. “Working families need financial security to get through the tough times ahead. And employers need to put an end to last minute decisions, ”he said.
The interventions come after Boris Johnson announced over the weekend that the license would be extended for a month during England’s second lockdown. Costing more than £ 40bn since its launch in March and used by up to 9 million workers at its peak, the scheme will be replaced in December by the less generous job support scheme, which pays 67% of workers. wages and has a stricter eligibility. criteria.
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However, business leaders said a higher level of support was needed for longer as companies that are already in distress approach the brink of collapse.
The comments from Fairbairn and O’Grady are important, as they both helped Sunak launch the Downing Street Stairs replacement leave. However, the TUC and the CBI believe that the plan was better suited to a period of economic recovery, which has now been drastically undermined by the second wave of Covid-19.
Sunak’s announcement comes after the government steadfastly refused to push the licensing plan for parts of the country that fall under Covid’s higher restrictions, including a high-profile battle with Andy Burnham, the mayor of Greater Manchester on the last month.
With the economic outlook deteriorating rapidly and tighter restrictions launched across the country, the prime minister appeared to concede earlier this week that the Treasury’s licensing policy should change.
After multiple adjustments to the scheme in the past month, Johnson suggested on Monday that decentralized administrations in Scotland, Wales and Northern Ireland could use the license in the future. Responding to questions from MPs in the Commons, he said: “If other parts of the UK decide to take action that requires the licensing scheme, of course it is available to them, that has to be correct. That applies not only now, but also in the future. “
