LONDON (Reuters) – British finance minister Rishi Sunak announced a new jobs support scheme on Thursday that would help firms employ people on shorter hours, but warned he could not save every business or job.
“The government will directly support the wages of people in work, giving businesses who face depressed demand the option of keeping employees in a job on shorter hours, rather than making them redundant,” Sunak told parliament.
Sunak said the scheme would run for six months, starting in November and be open to all small and medium sized enterprises. Larger firms would only be eligible if their turnover has fallen during the crisis.
“It will support viable jobs to make sure that employees must work at least a third of their normal hours and be paid for that work as normal by their employer,” he added.
“The government, together with employers, will then increase those people’s wages, covering two-thirds of the pay they have lost by reducing their working hours.”
Britain’s existing furlough scheme, the Coronavirus Job Retention Scheme, which supported around 9 million jobs at its peak in May, is due to stop at the end of next month. It is expected to cost around 50 billion pounds ($64 billion).
Around 5 million jobs were still supported by the programme at the end of July, according to tax data, and earlier on Thursday Britain’s statistics agency estimated that one in eight workers were being helped by the programme in early September.
The CJRS paid employers 80% of the salaries of furloughed workers, up to 2,500 pounds a month.
(Reporting by David Milliken and Andy Bruce, writing by William James, editing by Elizabeth Piper and Stephen Addison)