Wed | Oct 21, 2020

UK announces new plan to help workers hit by pandemic

Published:Thursday | September 24, 2020 | 9:41 AM
Britain's Chancellor of the Exchequer Rishi Sunak poses outside No 11 Downing Street, before heading for the House of Commons to give details of his Winter Economy Plan in London on Thursday September 24, 2020. (AP Photo/Frank Augstein)

LONDON (AP) — Britain’s treasury chief announced a new income support program Thursday for workers hurt by the coronavirus pandemic as the government races to prevent widespread layoffs when earlier employer subsidies end next month.

Chancellor Rishi Sunak, in a speech to lawmakers, unveiled his plan to subside the wages of workers whose hours are cut due to the pandemic as part of a wider package of measures to help businesses and bolster the economy. The plan comes in response to pressure from businesses and labour unions for the government to step in with more direct support for people in precarious work situations.

The new proposal would replace a furloughed worker program that expires next month under which the government pays 80% of the wages of workers who are placed on leave.

“The primary goal of our economic policy remains unchanged — to support people’s jobs — but the way we achieve that must evolve,″ Sunak said, adding that the Conservative government wants to support viable jobs but not preserve those that are no longer needed.

To underscore that his proposals have wide support, Sunak appeared outside his office before delivering his speech, holding a copy of the plan and flanked by representatives of the Confederation of British Industry and the Trades Union Congress.

The announcement comes as COVID-19 cases continue to soar across the UK, blunting the country’s economic recovery from a nationwide lockdown imposed in March.

The government reported 6,178 new confirmed cases Wednesday, a 25% increase from the previous day and the U.K.’s highest daily total since May 1. Britain also has the deadliest outbreak in Europe, with nearly 42,000 confirmed virus deaths.

To control the spike in COVID-19 infections, the British government on Tuesday introduced new restrictions, including a 10 p.m. curfew for bars and restaurants and lower crowd sizes for weddings.

Sunak said he was concerned that the furlough program allowed UK employers to preserve some jobs that were no longer needed as the economy adapts to a post-pandemic world. While this was appropriate to shield the British economy from the shock of the lockdown, the government now wants to move the economy in a different direction.

To ensure that the government is supporting the retention of viable jobs, employers who participate in the wage support program will be required to assign workers at least one-third of their previous hours. The government and the employer will then pay two-thirds of the remainder, meaning employees will receive 77% of their pre-pandemic wages.

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