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Tuesday, July 14, 2020

Extend leave plan or face spiraling job losses, said Rishi Sunak | Politics

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The Chancellor, Rishi Sunak, was urged to extend the wage subsidy program against coronaviruses until September to avoid a spiral of job losses in Britain this summer.

Against a backdrop of increasing pressure on the government to provide continued support as the foreclosure measures are gradually lifted, the Resolution Foundation said the extension would cost the public treasury up to £ 48 billion but would prevent a further outbreak unemployment.

After Boris Johnson’s announcement on Sunday his plan for the gradual lifting of restrictions, industry groups have warned that it is incomplete without urgent details on the job retention program.

Lex Butler, President of the Association of Hotel Reservation Agents, said, “We need to know immediately that the leave plan will be extended beyond the end of June and under what conditions. We need clarity now to avoid closings and large-scale job losses. “

Hotel workers are expected to return to work last, possibly starting in July.

Adam Marshall, Managing Director of British Chambers of Commerce, said: “Businesses should know that government support programs, which have saved millions of jobs in recent weeks, will continue as long as they are needed so you can plan ahead with confidence. “

Johnson told parliament Monday that Sunak will announce details of the future of the leave plan on Tuesday. The chancellor is widely expected to announce phasing out of the program against a background of growing concern about its cost, which is around £ 14 billion a month.

Under this program, workers receive 80% of their wages up to £ 2,500 per month. Over 6 million people were protected in 800,000 businesses during the first two weeks of the program.

Treasury options is understood consider include reducing the level of support to 60% while allowing staff to work part of their hours.

The Resolution Foundation urged the government to allow “partial leave” as early as June, but said 80% support should also be maintained across the economy until at least August. It could then be gradually reduced.

However, the thinktank recommends that the 80% support continues until September at least for companies in sectors where the return to work will take longer, including the hotel industry.

Sunak is under pressure from business leaders to provide an update this week, as employers must allow at least 45 days to consult on layoffs of more than 100 employees. Businesses must face May 18 to begin the layoff consultation process if leave is no longer available in July.

Torsten Bell, the executive director of the Resolution Foundation, said: “Acting too quickly could trigger a huge second wave of job losses at a time when unemployment already appears to be at its highest level in a quarter of a century.

“However, the program cannot last forever. It should be phased out, with a longer deadline for the most affected sectors. “

Johnson said on Sunday that it was time for sectors in which homework was not possible – including manufacturing and construction – to return to work.

But the British Metallurgy Confederation (CBM), which represents around 200 manufacturing companies across Britain, said it would take longer for the economy to recover and more financial support is needed then that production levels remain below normal.

The CBM said that up to 30% of the jobs (12,000) among its members could be lost if the aid was cut in late June.

Financial lobby group TheCityUK has said it expects UK companies to face unsustainable debt of up to £ 105 billion which should be managed before March next year.

Business Today email or follow Guardian Business on Twitter at @BusinessDesk

In addition to continued government support, the main major banks have been ordered by the Bank of England to provide more loans to businesses to help them operate.

A spokesperson for the Treasury said the job retention program had already protected millions of jobs.

“Future decisions regarding the program will take into account the broader context of the measures in place, as well as the public health response,” they said. “We have been clear that there will be no cliff and people will be reintegrated into work in a measured way.”

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