Chancellor 'pondering German-style job support scheme' amid pressure for action

Cornelia Mascio
Settembre 24, 2020

RISHI SUNAK is considering more "targeted measures" to help save jobs once its furlough scheme stops at the end of October, reports said, amid speculation that he could introduce German-style wage subsidies.

Sunak, meanwhile, was also likely to extend the Treasury's business support loans programme to help companies affected by the coronavirus pandemic, the Financial Times reported late on Sunday.

The Trades Union Congress (TUC), which outlined its furlough replacement proposal last month, said the Government must "fast-track a new plan" to protect jobs.

Even the Bank of England governor Andrew Bailey intervened on Tuesday to warn the chancellor to "rethink" his plans to shut down the scheme.

In one example, the Government and employers would share the cost of paying a worker two thirds of their "missing" wages.

Johnson said: 'What we will do is continue to put our arms around the people of this country going through a very tough time and come up with the appropriate creative and imaginative schemes to keep them in work and keep the economy moving.

"With the right approach we can stop mass unemployment scarring millions".

The government has come under increasing pressure to extend or replace the furlough scheme, which helped prevent mass unemployment as the United Kingdom plunged into the deepest recession since before the second world war.

But his plans have been blown off course by the rapid upsurge of coronavirus cases which forced the prime minister to impose new restrictions on economic and social activities.

The TUC has proposed a similar scheme that would see workers receive 80% of their salary for the hours they are not in work.

The Chancellor is said to be looking at a "short working hours" scheme where workers would remain part-time and have some of their wage subsidised by the government.

Mr Sunak had been expected to deliver his second budget of 2020 within the next few weeks, and was hoping to use it to set out plans for major investment in infrastructure to turbo-charge the UK's recovery from lockdown and drive Boris Johnson's "levelling up" agenda.

Furloughing has been the most expensive and cost around £40bn so far.

More than £13 billion has been handed to firms and workers through five different Government support schemes in the last month.

"The Treasury has promised creative action in this extended, unprecedented period - but time is short".

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