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Rishi Sunak is drawing up plans for a new German-style wage subsidy scheme to prop up the UK economy and prevent a wave of job losses when the leave ends, it was stated today.
Business bosses are urging the chancellor to “ move around the table ” and agree to new job support measures after Boris Johnson gave up his urge to go back to work and imposed a series of new coronavirus restrictions.
Businesses fear that the new crackdown will hit companies that are already in trouble, especially with the closure of the licensing program at the end of October.
But reports suggest that Sunak is already planning a new plan to prevent job losses after retail bosses warned that up to a million unlicensed workers could be laid off without another bailout.
The plans discussed by the Chancellor would make the government and companies share the cost of increasing the salaries of employees who can only work part-time due to the pandemic.
Sir Keir Starmer lobbied Mr. Johnson on the issue during today’s PMQs, saying that ending the license meant that “health measures and economic measures are now dangerously out of sync.”
Johnson replied: ‘Let us have no doubt that the work this government has done to protect the economy of this country, to support the jobs of 12 million people through the licensing scheme and a total spending of about £ 160 billion has not been matched anywhere else in the world.
“I think I should pay tribute to the Chancellor and his work and we will go ahead with more creative and imaginative schemes to keep our economy moving.”
Rishi Sunak is drawing up plans for a new German-style job retention program to replace the government’s outgoing coronavirus leave scheme, the reports suggest.
The government’s leave scheme has helped maintain nearly 10 million jobs during the crisis, covering up to 80 per cent of an employee’s salary up to a maximum of £ 2,500 a month.
It is now in the process of being liquidated and will formally close at the end of next month after racking up a bill of over £ 39bn.
There have already been calls from opposition politicians and business groups for the scheme to be extended even before Johnson announced yesterday his latest coronavirus restrictions.
But the Prime Minister’s decision to encourage workers to work from home where they can and to impose a 10 p.m. curfew on the hotel sector, potentially for the next six months, has spooked companies and accelerated orders for More help.
Luke Johnson, a businessman and former head of Pizza Express, told BBC Newsnight that he believed a million workers without permission could be fired if the government does not implement new financial support measures.
He said: ‘Rate relief and business loans have made a big difference and if they are extended they will help.
“There are still three million people probably on license and many of those jobs are at risk if the lockdowns continue in some form or fashion and severe restrictions are maintained.”
He added: ‘It may just be that all subsidies are cut and in which case I would estimate that of the maybe three million, at least a million maybe more will be laid off because I think those companies will feel very bad. demoralized and without confidence in investment and reconstruction and possibly insolvent, so they close completely. ‘
Bank of England Governor Andrew Bailey said yesterday that it was time to “stop and rethink” the end of the licensing plan while advocating for a new, more targeted approach.
The Trade Union Congress (TUC), which outlined its proposed license replacement last month, said the government must “accelerate a new plan” to protect jobs.
TUC General Secretary Frances O’Grady said: “We have published detailed proposals for a new work scheme and short-term skill enhancement.
‘With the right approach we can stop the massive unemployment that leaves millions of people.
“My message to the ministers is clear: let’s set the table and accelerate a new plan.”
It comes as Boris Johnson yesterday reversed his way back to work and imposed new restrictions on the Covid-19 hotel industry in a bid to slow Britain’s rising infection rates, while avoiding a second national lockdown. economically devastating.
Mr. Sunak has repeatedly stressed that the licensing regime will not be expanded.
But he has vowed to be “creative” in helping companies and is understood to be weighing a number of possible measures to subsidize workers’ wages, after consulting with unions and business groups.
He is believed to have postponed an announcement scheduled for yesterday to expand the government’s emergency loan plans in favor of a larger support package.
One option being considered is reportedly a scheme similar to Germany’s highly praised Kurzarbeit, or a shorter working time policy, under which companies can radically reduce working hours in economic downturns and the state replaces part of your lost income.
The TUC has proposed a similar scheme that would allow workers to receive 80 percent of their salary for the hours they are not working.
Businesses would receive a 70 percent subsidy from the government, provided they bring back all plan workers for a minimal proportion of their normal working hours.
Another proposal presented by the CBI business group would see subsidies for companies that can staff at least 50 percent of their normal hours, with the cost of non-working hours shared equally by the company, the Treasury and the employee.
Dame Carolyn Fairbairn, CEO of CBI, said: ‘A second national lockdown would be devastating to our economy, so it is right to prioritize infection control.
“But the crushing blow that the new measures deal with thousands of companies, especially in city centers and for our hotel sector, which employs more than four million people, cannot be avoided.
“It is vital that all announcements of restrictions clearly go hand in hand with business support that protects jobs.”
The Treasury declined to comment.
The licensing plan has cost the government £ 39.3 billion to date, with £ 3.9 billion paid between August 16 and September 20 alone, according to the latest figures.
More than £ 13 billion has been given to businesses and workers through five different government support schemes in the last month.
John Phillips, Acting General Secretary of the GMB union, said: “Other countries have moved forward by offering support, protection and peace of mind to industries while our economy is on the brink.
“The Treasury has promised creative action in this long and unprecedented period, but time is short.
“Ministers should focus on supporting industries, supporting incomes and taking action to save jobs.”
