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Chancellor Rishi Sunak is under pressure to launch a second wave of license payments as the government’s plan will run out in June.
Industry and manufacturing expert groups have warned that without additional payments, up to 35 percent of jobs could be lost in parts of the UK, as companies struggle to survive during the national shutdown.
The scheme allows companies to ask the government to pay the wages of employees at home and not work, set at 80 percent of their salary up to £ 2,500 per month.
So far, 140,000 have taken advantage of the offer to issue a work permit to approximately 9 million staff members, at an estimated cost of £ 42 billion during the first three months by the Office of Budgetary Responsibility.
Boris Johnson is expected to set plans to pull the UK out of the shutdown today, and other European nations, including Spain and France, could warn that the restrictions could last until July.
Chancellor Rishi Sunak has been called to extend the licensing plan. The CIPD said it should continue payments until September at the earliest.
The industry think tank, the Royal Society for the Encouragement of the Arts, Manufacturing, and Commerce, warned that without more licenses, unemployment could rise to levels not seen since the 1930s.
The head of the future RSA Job Center, Alan Lockey, warned that no part of the country will be spared a “severe recession,” but those most dependent on hospitality and tourism will be “particularly affected.”
“The government response so far has been strong,” he said, “but you should avoid going back to” business as usual, “including Universal Credit, sanctions and media testing, to avoid the devastating impact of prolonged unemployment overall. strips of the population.
The Chartered Institute of Personnel and Development business association said the chancellor should extend the permit until September to support paralyzed companies.
They warned that without this change the plan could become a “waiting room for unemployment and fail to protect a significant number of the jobs it set out to save.”
“This will provide more certainty to employers and ensure there is no” cliff-edge “exit from direct redundancy leave for hundreds of thousands of workers at the end of June.”
Four-fifths of manufacturing companies have seen a drop in orders due to the coronavirus outbreak as the economy freezes
The Manufacturers Organization, Make UK, asked the UK government to extend the license within its sector, where four-fifths of companies have seen a drop in orders.
“The possibility that a significant number of companies will not withdraw until they see increased orders means that the government will have to consider extending some form of job retention plan beyond the end of June,” they said.
UK Chief Executive Stephen Phipson said: ‘The degree of collapse in demand is such that it means that the recent OBR forecast could be underestimated unless there is a quite remarkable change that, to be honest, is simply not going to happen.
‘All indications at this time indicate that even if a gradual reduction in blockades begins soon, the impact of this shock will continue to affect businesses and livelihoods for some time.
“As such, the government may need to be flexible with its future support schemes in the same way that the industry will have to be flexible with its recovery plans.”
Chief Economist at the Institute of Directors Tej Parikh told the Observer that the government should act to avoid a cliff.
“Getting the economy back on track will not be like flipping a switch,” he said. Even if the blocking measures were lifted entirely, many companies would not expect demand to rise to normal levels immediately.
“A sudden removal of the licensing plan in late June could cause major problems for some companies, so the government should explore how it could flexibly reduce the system.”
Areas of the UK with a heavy reliance on tourism and hospitality are said to be at higher risk from a coronavirus recession. In the photo above there are houses along the Swindon canal
Data released by Monitor says that 19 percent of companies have laid off between 11 and 25 percent of employees, while 15.9 percent have laid off between half of their workforce.
The main companies that signed up to the plan include BA, which has suspended 22,260 staff members, and easyJet.
Rishi Sunak said earlier this week that he was willing to consider extending the plan until July.
“I am determined to make sure as many people as possible go back to work after this crisis,” he said during an update on the parliamentary economy on Monday.
“I want to make sure that as we come out of this crisis, we can return to the lives that we once knew.”
Boris Johnson is set to announce a closing exit strategy later today.
Manufacturers are also at risk for the coronavirus. The image above is the Normanton Industrial Estate in Yorkshire
France extended its blockade measures until July 24 on May 2. Health Minister Olivier Veran announced a new extension of the blockade, which began on March 24, warning that his country “will have to live with the virus for a time.”
Spain allowed people to leave their homes for the first time in more than a month yesterday.
Pedro Sánchez’s government has announced a tiered closure survey system, which will see the regions progress through gradual relaxation measures every two weeks if the virus does not start to spread again among the population.
