Britain’s government launched scaled-back job support on Thursday for workers hit by the resurgent COVID-19 pandemic, but warned not everyone could be helped during an economic meltdown that is threatening millions of jobs.
Finance minister Rishi Sunak also unveiled plans to extend loan repayments for businesses and delay ending a tax cut for the hospitality sector which has been drastically hit by coronavirus restrictions.
COVID-19 cases this week showed their biggest daily increase since May, prompting the government to order bars to close early and people to work from home again, moves that will put further strain on the economy.
“I know people are anxious, and afraid, and exhausted ... but there are reasons to be cautiously optimistic,” Sunak said.
The opposition Labour Party criticized the delay in introducing the job measure, which it said had hurt business confidence, while the general secretary of the Public and Commercial Services trade union, Mark Serwotka, called it “a plaster to cover a gaping wound”.
The Resolution Foundation think tank said many businesses had little incentive to use the scheme, compared with cutting staff hours without using the plan, as they would have to match the government wage top-up.
Sunak’s measures offered the self-employed similar support.
He also plans to extend a cut to value-added tax for hotels, cafes and restaurants until March 31. And businesses will be given 10 years to repay government-backed loans rather than six.
Under the government’s Bounce Back Loan Scheme, 1.3 million small businesses have taken out a total of 38.0 billion pounds ($48.4 billion) in loans worth up to 50,000 pounds each.
The Bank of England forecast last month that unemployment would jump to 7.5 percent 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 percent in the three months to July.