UK’s Sunak Offers Lockdown-Hit Companies More Help to Keep Jobs

October 9, 2020 Updated: October 9, 2020

LONDON—British finance minister Rishi Sunak announced his latest programme to stave off a surge in unemployment on Friday, offering extra help for businesses and workers who are forced to stop work during local coronavirus lockdowns.

In a move likely to cost billions of pounds over the six-month duration of the new scheme, Sunak said the government will pay up to two-thirds of each employee’s salary, with a cap of £2,100 ($2,724.33) a month, if they work for companies that are forced to close temporarily.

A person wearing a protective face mask walks past a Job Centre Plus office
A person wearing a protective face mask walks past a Job Centre Plus office, amidst the outbreak of the coronavirus disease (COVID-19) in London, Britain, on Aug. 11, 2020. (Toby Melville/Reuters)

The announcement represented an expansion of the government’s Job Support Scheme—which itself is the replacement of the broader furlough scheme that ends this month—for companies ordered to close and their workers.

Sunak had previously resisted calls to increase the generosity of the government’s support schemes amid fast-rising job losses and his announcement on Friday is likely to herald the temporary closure of bars and other businesses.

Scotland’s government has already ordered a 16-day closure of pubs in the country’s two biggest cities starting on Friday.

As well as the new subsidies, he also announced more generous grants for lockdown-hit companies, offering up to £3,000 per month payable every two weeks, compared with £1,500 every three weeks under the standard scheme.

“I hope that this provides reassurance and a safety net for people and businesses in advance of what may be a difficult winter,” Sunak said.

A Treasury source said the new wage support measures, which will last for six months from Nov. 1, were likely to cost hundreds of millions of pounds a month.

Under the scheme, employers will not be required to contribute towards wages and only asked to cover social security and pension contributions.