British Treasury Chief Rishi Sunak has unveiled a job support scheme that allows for fewer hours of work instead of reductions, amid rising COVID-19 infections, which could threaten a “fragile economic recovery.”
Sunak, speaking at the House of Commons on Thursday, stressed the importance of supporting viable businesses and jobs, noting that many businesses will face uncertainty and falling demand during the winter.
“As I say during this crisis: I cannot save every business, I cannot save every job, no finance minister could,” Sunak said.
The scheme provides for the payment of salaries to employees of companies who will work at least a third of their standard working day. It will start operating in November and will last 6 months.
The authorities will take measures to compensate for part of the remaining two-thirds of the salary. The program will be available to workers across the UK.
Sunak also announced the extension of the tax breaks for the tourism and hospitality industry. Companies in the industry will pay VAT at 5% by the end of March, instead of the planned tax hike to 20% in January, Sunak said.
“If we want to protect jobs this winter, the second big challenge will be helping companies with cash flow,” Sunak said. “Companies now need every extra pound to protect jobs.”
Companies will also have the option to pay off debt in up to 10 years instead of six years, which will cut their monthly payments by almost half. This will allow companies, in the event they are in a truly difficult situation, to pay only interest and defer payments for up to six months without affecting their credit rating, Sunak said.