RISHI Sunak unveiled £5billion of measures to keep the economy afloat over winter — but said it will fail to stop mass job losses and firms going bust.
The Chancellor announced the state will top up the wages of employees forced to go part-time for the next six months.
⚠️ Read our coronavirus live blog for the latest news & updates
But the scheme is aimed only at protecting “viable jobs”, and leading economists warned of two million more losses from Covid by Christmas.
It was among a three-pronged Winter Economy Plan to help protect firms and workers from the tough restrictions announced this week.
The new Job Support Scheme aims to encourage firms to keep employees on part-time.
Those working at least a third of their normal hours will receive 77 per cent of their salary, capped at £697.92 per month.
The scheme, due to run for six months from November, will see the Government pay up to 22 per cent of wages, down from 80 per cent when the furlough policy began.
All small and medium-sized firms can apply, plus larger ones whose turnover has fallen during the crisis.
But it will protect only “viable jobs”, so those in industries currently closed — like nightclubs — may lose out.
The self-employed will also get a similar subsidy scheme with grants to cover 20 per cent of their income over the same six-month period.
Mr Sunak handed a lifeline to pubs and restaurants hit by the new 10pm curfew by extending the hospitality VAT cut to the end of March.
He also extended the emergency Covid loans schemes for businesses until the end of the year.
Other measures include allowing firms to spread VAT over 11 smaller payments with no interest. About 11 million self-assessment taxpayers can also defer their bill until 2022.
The total cost was estimated at £5billion — a drop in the ocean compared with the £210billion already spent on Covid bail-outs.
Mr Sunak said it was “impossible” to know how many jobs would be saved.
But he insisted it will “help protect as many as possible” by keeping people in part-time work.
He said another Covid wave “posed a threat to our fragile economic recovery”, admitting: “I cannot save every business, I cannot save every job.”
In a rebuke to England’s top medic Chris Whitty, the Chancellor said “our lives can no longer be put on hold”.
He declared: “We must learn to live with it, and live without fear and learn our new limits as we go.”
He said keeping pubs, shops and leisure facilities open was more than just economic support. The Chancellor explained: “We find meaning and hope through friends and family, through work, through community.”
‘TWO MILLION JOBS FEWER’
But he was criticised for failing to offer anything for the 700,000 people who have lost their jobs due to Covid.
Economists also warned the new scheme was not enough for struggling firms to keep staff on the payroll.
To qualify, employees must work at least one-third of their normal hours.
For hours not worked, the Government and employer will each pay a third of the remaining salary, so the employee gets 77 per cent of their normal pay.
But it means firms will pay 55 per cent of the salary of an employee working just a third of their normal hours.
Paul Johnson, boss of the Institute for Fiscal Studies, warned: “I suspect by the end of the year there will be two million jobs fewer than at the beginning of the year.”
He added: “The new job support scheme represents a significant new intervention from government to support jobs through the crisis. But it is significantly less generous than the furlough scheme it replaces.”
Tony Wilson, boss of the Institute for Employment, told The Sun: “It’s pretty disappointing. I really hope employers will sign up for this, but for many the numbers just won’t stack up.”
The Sun Says
YOU have to admire Rishi Sunak’s tenacious commitment to saving jobs. But he is fighting a losing battle against economic reality.
His latest targeted bailout replaces the furlough, which has kept vast numbers in work during and since the lockdown.
It places the financial burden more squarely with employers, even though many are already on the brink of ruin.
But the furlough could not go on.
And this does have the merit of ending taxpayer support for jobs that sadly will never be viable again . . . instead focussing on saving those that still are.
If the Chancellor now ramps up training to maximise the chances of all those laid off getting new work, he will at least have done his best by them.
Those are the positives, along with the extension to the self-employment income support scheme and the tweaks to loans and VAT to lighten firms’ load.
But this latest Sunakonomics rescue is a sticking-plaster on a bullethole. And what alarms us is that the public still seems largely unaware it has been shot.
One major poll reveals massive support for almost any anti-Covid restriction, short of shutting schools again, no matter how unimaginably costly. By huge or comfortable margins, the public would impose lockdowns nationally or locally, seal our borders entirely, enforce curfews and close pubs, bars, restaurants, “non-essential” shops and universities.
This mood will, we suspect, change overnight once the inevitable tsunami of unemployment engulfs us. Mr Sunak’s bailouts, though vital, have kept Britain in denial that the worst hardships for generations lie immediately ahead of us.
Rising cases, at a new daily record of 6,634 today, spook the nation out of all proportion to the actual danger. Health Secretary Matt Hancock reckons there are in fact 10,000 new infections a day now. But that is a TENTH of what he estimates we had at the pandemic’s height in the spring.
Daily deaths back then hit almost 1,200. Today’s total was 40. Our position is far better than it was, for many reasons. But all the Government’s talk, even in the face of looming economic catastrophe, is of locking down harder.
If it is taking comfort from public support for restrictions, it should wake up.
Its focus, before our ruin is certain, should be not on closing down but on finding ways to open up.
The British Beer and Pub Association warned it will fail to save thousands of pubs. Boss Emma McClarkin said Mr Sunak “missed a golden opportunity to extend the VAT cut to include alcohol”.
Boris Johnson, absent from the Commons announcement, praised the “creative and imaginative proposal”. Three-quarters of the public also back it, according to YouGov.
Mr Sunak cancelled his autumn Budget but again signalled tax hikes will be needed to pay for Covid.
GOT a story? RING The Sun on 0207 782 4104 or WHATSAPP on 07423720250 or EMAIL email@example.com