Broadly speaking, businesses will welcome the statement made by the chancellor yesterday. Fears of mass unemployment the day after the coronavirus job retention scheme comes to a sudden halt on 31 October have been put to rest. For now at least.
Rishi Sunak has looked to Germany for ideas to quell the threat of mass unemployment on a scale not seen for a generation. He has borrowed innovative, if not radical, ideas from the continent.
Under the chancellor’s latest jobs scheme, the government will continue to contribute towards workers’ wages until the end of April next year. The new scheme is not as generous as the last but many employers will calculate that it is worth keeping employees in work, even if only on a part-time basis, rather than press the redundancy button. An employee must work at least one-third of their normal hours under the new scheme and the government and the employer will pay one-third of the employee’s wages each for the remaining hours not worked. This offer will be gobbled up by businesses who can make use the scheme. All SMES will qualify. Large employers too will be eligible if their turnover has fallen during the pandemic.
For some employers the chancellor’s latest initiative will not be enough. Many cannot afford to pay their staff’s wages at all as consumer demand dwindles. Things will get worse before they get better and the chancellor’s new jobs support scheme will not save every job. He has admitted this himself. The chancellor and the government will hope however that the significant incentives being offered to employers to keep those working in work will be enough to fight off mass unemployment on a scale not seen since the last deep recession in 2008.
To read the Chancellor’s full statement read more on the BBC here.
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