UK bolsters salary support for those hit by virus restrictions
LONDON — The British government said Friday it will pay two-thirds of the salaries of workers in companies that have to close as a result of new coronavirus restrictions widely expected to come into effect this week.
In a change of policy, Treasury chief Rishi Sunak has responded to calls from businesses, local leaders and unions to provide a financial package to prevent mass job losses in sectors that are expected to be subject to tighter restrictions, such as pubs and restaurants in parts of northern England.
“I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves,” Sunak said. “The expansion of the Job Support Scheme will provide a safety net for businesses across the U.K. who are required to temporarily close their doors, giving them the right support at the right time.”
Sunak would not be drawn on what businesses would be forced to close but said the rise in cases and hospital admissions in certain parts of the country is a “concern” that requires a change in approach.
The U.K. as a whole has suffered Europe’s deadliest outbreak, with over 42,600 deaths. The latest daily figures published Friday showed 13,864 new cases. Though down on the previous day’s 17,540, the number is around double the level from a week earlier. As infections rise, the number of people requiring hospitalization increases followed by deaths. The latest figures show
the number of people being hospitalized fell slightly to 597, but the daily death toll rose to 87, the highest since early July.
With infections rising, the pressure on Prime Minister Boris Johnson to impose further local restrictions has grown. He is expected to back a new three-tier local lockdown system, which could see hospitality venues in coronavirus hot spots such as the northern cities of Liverpool, Manchester and Newcastle, being temporarily closed. Restrictions are already being tightened Friday in Scotland, where pubs in the two biggest cities, Glasgow and Edinburgh, have to close for 16 days.
Under the terms of the new financial support package, the government will pay 67% of the salaries of workers who won’t be able to work, up to a maximum of $2,730 a month. Employers will not be required to contribute toward wages.
A more generous nationwide program will expire at the end of October, having already cost the government nearly 40 bil
lion pounds. At the height of that program, the government paid 80% of the salaries of furloughed workers, keeping a lid on unemployment. That is being succeeded by the less generous Jobs Support Scheme, which will see the government pay up to 22% of wages for people returning to work from furlough from Nov. 1.
Carolyn Fairbairn, director general of the Confederation of British Industry, said the change “should cushion the blow for the most affected and keep more people in work,“while noting that many firms, including pubs and restaurants, “will still be hugely disappointed if they have to close their doors again after doing so much to keep customers and staff safe.”
Closing pubs and restaurants will be a bitter blow to the sector, barely three months after reopening. Figures released Friday showed the sector was largely behind the 2.1% increased in GDP recorded from the previous month.