The British Government launches a new billion-pound scheme to save the empleos “viables”, in the face of the worsening of the coronavirus epidemic. One day after the prime minister, Boris Johnson, will announce stricter restrictions and encourage the British to use telecommuting, the Finance Minister, Rishi Sunak, presented a scheme of subsidies to sustain employment and the economy.
Starting in November, the Government will pay part of the salaries of the companies (up to 22%), whose income figure drop is due to the pandemic. In these businesses, potentially capable of bouncing back when the crisis ends, employees will have to work at least a third of their normal hours in order to obtain such benefits. The company will pay for those hours and a third of those not worked. The final salary will be 77% of what the worker earned before.
The goal is to protect “viable” jobs over the next six months, a point Sunak insisted on as a prerequisite. “I can’t save every business, I can’t save every job. No finance minister can do it, But what we can do is address the real problems companies are now facing. & rdquor;
More restricted aid
The new scheme will replace the one that has worked since the confinement (Employment Retention Plan) and for which the Government has been paying 80% of salaries – up to a maximum equivalent to 2,700 euros per month – for those who could not work because of of the epidemic. No distinction was then made as to whether or not those jobs could survive and whether or not the businesses had a future. The idea was to prevent a collapse in employment due to covid-19. It was then expected that in the summer the worst would have passed. But the crisis has turned out to be more persistent and less temporary than expected. The second wave is here and the certainty that at least in the next six months there will be no economic recovery, has led to the launch of this new lifeline more restricted than above.
Sunak also announced the extension of the VAT cut (5%) for the sectorl tourism and catering, from 20% to 15% until next March 31st. With semi-empty coffers in companies, the Government offers more time and flexibility, with a period of 6 to 10 years, to repay emergency loans granted to more than a million of these businesses.
Trade unions and employers
The Conservative government was under enormous pressure from the “Tsunami of job losses & rdquor; this winter, as the opposition, unions and employers have been warning. “There has been no other country in the world that has been so generous, & rdquor ;, noted Sunak, rejecting criticism that the government intervenes too late.
The minister wanted to make it clear that he has all the social forces. Before his announcement in the House of Commons he met with the head of the employers’ organization CBI (Confederation of British Industry), Carolyn Fairbairn, and the union leader Frances O’Grady of the TUC (Trades Union Congress). For the CBI “the Treasury plan, will save thousands of viable jobs this winter & rdquor ;.