UK to tell employers to help fund coronavirus job safety net
[LONDON] British finance minister Rishi Sunak will tell employers on Friday how much they must contribute to the government's hugely expensive wage subsidy programme from August, a prospect that some firms say will lead to more job losses.
Mr Sunak will say companies must pay between 20 per cent and 30 per cent of the costs of the programme - the centrepiece of his attempts to protect the economy from the coronavirus shutdown - according to media reports.
He is also expected to say when workers on the scheme, which is due to run until the end of October, can return on a part-time basis, something many firms want as they build up operations gradually.
Around 8.4 million temporarily laid off workers, or about one in three private sector employees, are covered. The cost to the public finances so far is £15 billion (S$26.14 billion).
Unions and employers are united in support for the scheme. The Bank of England says it could limit a rise in the unemployment rate to about 9 per cent, still double its most recent reading.
Under the plan, workers receive 80 per cent of their wages up to £2,500 a month until the end of October.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Some British employers are worried that they will not be able to contribute to the scheme with the economy expected to start recovering only gradually by August.
The Institute of Directors said this week that a quarter of its member firms using the scheme would struggle to pay a share of the costs, raising the risk of job losses.
Mr Sunak has previously said the scheme is too expensive to continue indefinitely.
Britain's borrowing in April alone of over £60 billion was equivalent to almost all of the previous financial year.
About 2.3 million claims totalling £6.80 billion have been made for a similar programme for self-employed people. That scheme is due to close this weekend.
REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
US dollar briefly falls versus yen after GDP data
US weekly jobless claims unexpectedly fall
US economic growth slows more than expected in Q1
Malaysia ex-PM Mahathir facing anti-graft probe in a case involving his sons
BOE reports record usage of short-term liquidity repo
Philippines central bank not seeing rate hike despite peso weakness: finmin