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Members of Parliament said the UK government should consider a targeted extension of the leave scheme.
The Treasury Select Committee has warned that the coronavirus crisis threatens long-term mass unemployment and that viable businesses may be exposed without support.
However, she added that keeping the overall layout wouldn’t be good value for money.
The Treasury Department said it “will continue to innovate in supporting income and employment.”
The job retention program due to the Coronavirus is set to end on October 31. Under it, furloughed workers earned 80% of their wages up to a maximum of £ 2,500 a month.
At first, the government paid for all of this. But Companies had to start contributing to wages In September the scheme started to fade.
Prime Minister Boris Johnson had previously said that extending the leave beyond October would only keep people “on the cessation of animation”.
Chancellor Rishi Sunak also ruled out the extension, instead saying so The companies would receive £ 1,000 per vacation worker Still in action at the end of January.
- Coronavirus: What Happens When the Leave Scheme Ends?
- Extending the Leave Scheme or “Risking the Second Wave of Job Downgrades”
But Mel Stride, chair of the commission, said the chancellor “must carefully consider targeted extensions” of the plan.
“The key is to help those companies that, with additional support, can survive the crisis as sustainable enterprises, rather than focusing on those that unfortunately will not be viable in the changing post-crisis economy.”
Wages and skills
In its second report from investigating the economic impact of Covid-19, the commission also warned that the pandemic threatens to widen the gender wage gap due to differences in paid work hours in lockdowns – especially if work patterns are permanently changed.
Representatives also said that people should be able to bring back skills, and small businesses should be able to fully participate in the government’s Kickstart plan, which aims to create jobs for youth on an overall credit basis.
With the leave plan expired, the FSB trade body said, “policymakers will need to look closely at measures to stop mass unemployment, including a subsequent plan.”
National FSB Chairman Mike Sherry said: “The priority should be protecting small, viable businesses – and all the jobs they provide – that have been disproportionate. [hit] Because of the coronavirus crisis, including those who have fallen into local lockdowns, subject to ongoing national restrictions, or with employees who have suffered directly from COVID-19.
Resolution, which campaigns on living standards, said that “providing support to the most affected economic sectors will be necessary to curb the high unemployment rates that Britain faces in the coming months.”
Thorsten Bell, CEO of the Research Center, said: “This official account of the economic impact of the Coronavirus should be read by Treasury officials who are planning the fall budget against a very unconfirmed background of high numbers of coronavirus cases.
“The chancellor will have to reconsider his plans for a rapid phase-out of subsidies, given the painful fact that the economic crisis is here to stay.”
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Leading business groups warned this week that the United Kingdom He risks a second wave of job cuts A slower economic recovery if the holiday scheme was not extended.
Germany, Belgium, Australia and France have all decided to extend or launch new wage subsidy plans in the next year.
A Treasury spokesperson said that by the time the UK scheme closes, it will have helped drive 9.6 million jobs.
“We will continue to innovate in supporting income and employment,” the spokesman said.
“We are helping employees get back to work, where they want to be, with a £ 1,000 retention bonus.
“We are creating new roles for young people through our Kickstart program, creating incentives for vocational training and training, and supporting and protecting jobs in the tourism and hospitality sectors through a VAT reduction and the Eat Out to Help Out system last month.”
The UK unemployment rate has reached 3.9% since the lockdown began.
But the Bank of England expects that rate to double to 7.5% by the end of the year when government-funded support plans expire.
Thousands of job cuts have already been announced by companies such as Rolls-Royce, Costa Coffee, Pret A Manger, Pizza Express, British Airways and BP.
