Britain Introduces a Scaled-Back Wage Support Plan

Mr. Sunak, 40, is in only the seventh month of the job, taking over Britain’s finances just weeks before the government shut down much of the economy to stop the pandemic. First elected to Parliament five years ago, he was more popular than Mr. Johnson throughout the summer, gathering public support from the furlough program and other measures to help the economy. But now, Mr. Sunak is beginning to scale back some of these fiscal measures.

“I cannot save every business,” he said. “I cannot save every job.”

Of course, the challenge is determining which jobs should be protected. Mr. Sunak said making companies pay for some of the reduced hours would be a signal of which jobs were viable.

But new restrictions imposed this week to close bars, pubs and restaurants at 10 p.m., delay plans to reopen events with large crowds of spectators, and encourage office workers to work from home will affect more jobs and leave employers trying to decide if they can afford to continue paying wages through six more months of restrictions.

Mr. Emmerson said it was a clever design to have employers pay for some of the lost hours but that many wouldn’t be willing to do this. “And that’s why unemployment almost certainly will still rise possibly quite sharply in November,” he said.

Already, nearly 700,000 payrolled jobs have been lost since March in Britain, even with the furlough plan. Mr. Sunak said he hoped the job support program would encourage employers to reduce employee hours rather than lay off staff.

The Resolution Foundation, an economic think tank focused on living standards, warned that companies may have a “strong incentive” to cut workers’ hours without formally putting them on this government program, to avoid incurring the additional wage costs.

“With almost three million workers estimated to still be on furlough, getting the design right of the jobs support is crucial,” Torsten Bell, the organization’s chief executive, said.

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