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RISHI Sunak is ready to announce an extension of the government wage rescue scheme today as 2 million people have emerged who have now signed on.
He has been finalizing details of adjustments to the taxpayer-funded job retention scheme, which currently pays 6.5 million workers 80 percent of their wages, up to a limit of £ 2,500 per month.
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The plan will expire in June, but the chancellor is expected to allow employers to suspend their staff part-time to help them re-operate. But he is also willing to cut taxpayer-funded support to 70 or even 60 percent.
Sunak, who will announce the changes to the Commons today, is expected to announce a temporary extension until September, but details were not yet finalized last night.
The chancellor will use the announcement to try to reduce the alarming rate of people claiming universal credit.
Yesterday, the ministers revealed that the government has processed around two million Universal Credit claims since mid-March, when the closure was imposed.
Welfare Minister Will Quince told parliamentarians yesterday that nine out of ten Universal Credit applications will be paid “in full and on time” despite the huge increase in claims.
Yesterday, Boris Johnson confirmed yesterday that the plan would somehow continue beyond June.
‘THEY WILL RECOVER’
He told parliamentarians: “It has been one of the most aggressive aspects, the most important feature of this country’s response to this crisis so far: that we have cared for some of the lowest-paid workers in our society, the hardest-working and we will continue to do so. “
Last night, Johnson promised that most people in the hardest hit industries will get their jobs back, defying dire predictions of massive job loss.
He insisted that working class people were “our priority,” but admitted that the country “would have to think of our economy differently as we go along.”
When asked by The Sun what message he would give to people who work in gyms, nightclubs, and other leisure and hospitality jobs facing months of work, the Prime Minister said: “I think they will recover.
“We have the ambition to achieve at least some hospitality by July 4, it will be a difficult question, it will be difficult to achieve and it depends on a lot of conditionality that I have established.
“But that is ambition, that is the goal we are setting, so at least some of the jobs will start to come back. And then, in the medium term, I have no doubt that the UK economy is immensely resilient and It will come back.
“But we are going to have to think a lot more: if we can’t get vaccinated quickly, we will have to think a lot more about how to make our businesses, our lives safe for Covid as we continue to be active.
“But we are a very resourceful group, the British, I am sure we will find ways to move forward, and that is what we intend to do.”
Sunak was inundated with an avalanche of warnings about the future of the scheme.
The Resolution Foundation urged him to keep the scheme open for longer for workers in the most affected sectors to recognize that the Government’s roadmap revealed that some sectors should remain closed for at least the rest of the year.
‘THE SCHEME CANNOT LAST FOREVER’
It also wants the government to allow partial leaves from June, allowing employees to return to work for a few hours, while still receiving 80 percent of their wages for hours they were without leave.
Currently, the scheme requires that unlicensed employees are not working to qualify for the scheme.
Resolution Foundation chief Torsten Bell said: “However, the scheme cannot last forever. It should be phased out, with a longer time frame for the worst affected sectors.
“The Chancellor should also use the scheme to support recovery by asking employers to contribute to the salary costs of permits and allowing” partial leave, “with workers returning to work for part of the week, even if not all .
“The retention scheme could end up costing almost £ 50 billion. It is a huge sum, but money well spent given the great threat this pandemic poses to our health, economy and standard of living.
“This policy has made a big difference in this crisis. Now he needs careful and gradual change to ensure that the benefits he has provided are insured rather than wasted. ”
The Small Business Federation has long campaigned for employers to resign part-time staff.
FSB chief Mike Cherry said last night: “The vast majority of small employers have suspended staff and are telling us loud and clear that the ability to do so part-time as we move toward recovery will be key to maintaining your operations afloat.
“For companies that don’t have the green light to open until July in particular, we need to see the schemes expand significantly, not least the job retention scheme.”
Treasury Committee Chairman Mel Stride suggested that the licensing scheme be “reduced” to protect jobs and ease the burden on the Treasury.
He told parliamentarians: “I just wanted to focus for a minute on how we could roll out the licensing scheme more productively and effectively.
“I think the first thing is that we should see a gradual decrease in those particular measures from 80% to 60% and 40% and so on to smooth our output.”
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“The second thing, I think this is particularly important, is that I think employers should contribute something to the cost of the license beyond the end of June.
“I say that because there will be a lot of employers out there who currently have staff members on leave and don’t have to pay them to be on leave, and they really have no intention in the medium term to at least bring them back to business.”
“Thirdly, I think we should make sure to encourage part-time work within the licensing scheme when possible, and finally I think the Chancellor should very carefully analyze the orientation of the support and I say that not only with regard to the license but also in respect of the other support that the Government is providing “.
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