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Sep 24, 2020
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UK launches pared-back job support scheme as Covid cases rise

Reuters API
Sep 24, 2020

British finance minister Rishi Sunak announced on Thursday fresh plans to help the pandemic-ravaged economy with a new jobs support scheme to help keep people employed on shorter hours, but warned he could not save every business or role.

A new jobs support scheme could help retailers in the UK - Photo: Sandra Halliday

Sunak also said he would extend support loan repayments for businesses and delay ending a tax cut for the hospitality sector which has been severely hit by COVID-19 restrictions.

"These are radical interventions in the UK labour market, policies we have never tried in this country before," Sunak told parliament as he announced the government's so-called "Economic Winter Plan".

"The primary goal of our economic policy remains unchanged - to support people’s jobs - but the way we achieve that must evolve," he added, acknowledging, however, "I cannot save every business, I cannot save every job."

At the heart of the new measures is a replacement for the Coronavirus Job Retention Scheme, which supported 8.9 million private sector jobs at its peak in May and ends next month.

Under the new programme, support will only be available to workers whose employers keep them on at least a third of their normal hours. For unworked hours, government and the employer will each pay staff at a third of their normal rate, with a maximum contribution of £698 a month.

"The government will directly support the wages of people in work, giving businesses who face depressed demand the option of keeping employees in a job on shorter hours, rather than making them redundant," Sunak told parliament.

Around 5 million jobs were still supported by the previous programme at the end of July, according to tax data, and earlier on Thursday Britain's statistics agency estimated that one in eight workers were being helped by the programme in early September.


The pandemic has killed nearly 42,000 people in Britain, the worst death toll in Europe. The United Kingdom is borrowing record amounts to pump money through an economy on track for its biggest annual contraction in at least 100 years.

Sunak also said he would extend a cut to value-added tax for hotels, cafes and restaurants until March 31 to support the sectors which are struggling with demand.

He also introduced a new scheme to give businesses flexibility to repay loans taken out during the coronavirus crisis, giving them up to 10 years to repay rather than six.

Under the government's Bounce Back Loan Scheme, 1.3 million small businesses have taken out a total of £38 billion in loans worth up to £50,000 each, from banks which have received a 100% state guarantee.

The Bank of England forecast last month that unemployment would jump to 7.5% by the end of the year if there were no replacement for the existing furlough scheme ending at the end of October, up from 4.1% in the three months to July.

The opposition Labour Party said the new support had come too late.

The plunge in demand for flights, clothes and nights out has already led to tens of thousands of workers losing their jobs from companies such as British Airways, Rolls-Royce, Marks & Spencer and Whitbread.

A new government programme to support employers who bring staff back part-time will save hundreds of thousands of jobs, the Confederation of British Industry employers' organisation said on Thursday.

"These bold steps from the Treasury will save hundreds of thousands of viable jobs this Winter. It is right to target help on jobs with a future, but can only be part-time while demand remains flat," CBI director-general Carolyn Fairbairn said.

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