As COVID surges, UK unveils plans to save jobs

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By David MillikenAndy Bruce

LONDON (Reuters) – British finance minister Rishi Sunak announced on Thursday a new jobs support scheme that would help firms keep people employed but on shorter hours, as he warned he could not save every business or role.

Rishi Sunak had ruled out a wholesale extension of the Coronavirus Job Retention Scheme, which supported 8.9 million private sector jobs at its peak in May and ends next month, but new restrictions to counter a growing second wave of COVID-19 cases has brought clamour for a replacement.

“The primary goal of our economic policy remains unchanged – to support people’s jobs – but the way we achieve that must evolve,” he told parliament as he announced the government’s so-called “Economic Winter Plan”.

He said there would be a new wage subsidy to encourage workers to return part-time to viable jobs instead of full furlough pay.

“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.

He 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.

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.

($1 = 0.7846 pounds)

Editing by Andrew Cawthorne and Kate Holton

Our Standards: The Thomson Reuters Trust Principles.

Reuters

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