LONDON – 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 subsidize 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. Businesses and labor unions had pressed the government to step in with more direct support for people in precarious work situations.
Under a furloughed worker program that expires next month, the government pays 80% of the wages of workers 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 U.K., blunting economic recovery from a nationwide lockdown imposed in March. The government reported 6,634 new cases of COVID-19 on Thursday — the U.K.’s highest daily total ever recorded. Britain also has the deadliest outbreak in Europe, with nearly 42,000 confirmed virus deaths.
To control the spike in infections, the 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 U.K. 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.