UK to unveil new pandemic support for workers

Agence France-Presse

Posted at Oct 04 2021 04:32 PM

Britain's finance minister admitted Monday that ending a pandemic furlough scheme that kept millions employed would mean job losses as the government was set to announce new support for workers.

Rishi Sunak, the chancellor of the exchequer, will announce a £500 million ($680 million, 580 million euro) package of retraining aimed at older workers coming off furlough and at younger Britons, the ruling Conservative party said.

Prime Minister Boris Johnson's government has spent almost £70 billion on paying the bulk of wages for staff stuck at home, helping to keep the official unemployment rate relatively low.

But Sunak ended the furlough scheme on Thursday, and is also scrapping a weekly boost to benefits for the lowest-paid workers.

He insists that it is time to transition to longer-term support, against objections by opposition parties and campaigners that the changes will plunge many people deeper into poverty.

"I said right at the beginning of this crisis, it wasn't going to be possible for me or quite frankly any chancellor to save every single person's job," Sunak told Sky News.

"We have a lower unemployment rate here in the UK than America, Canada, France, Spain, Italy, amongst others, and there are record numbers of job vacancies," he added.

The first phase of his plan had protected 11 million jobs through the furlough scheme, he said, and Britain was now "experiencing one of the strongest and fastest recoveries of any major economy in the world".

"But the job is not done yet and I want to make sure our economy is fit for the future, and that means providing the support and skills people need to get into work and get on in life," he was to say in a speech to the Conservatives' annual conference.

However, protesters at the conference in Manchester, northwest England, accused the Conservatives of abandoning the poor. 

"Children are hungry. How can that be in this century? We're here because we have to do something to register our disgust," retired teacher Lorraine Thompson told AFP on Sunday. 

- Taxing times -

Official data last week showed Britain's economy rebounded more strongly than expected in the second quarter.

But separate indicators point to a growth slowdown, as the country struggles with a supply chain bottleneck and global inflationary pressures that have sent fuel prices rocketing.

The government is grappling with a spate of panic-buying at petrol stations caused by a shortage of tanker drivers, and has mobilised the army to help.

Businesses blame the driver shortage on the government's hardline approach to Brexit, which stopped a flow of workers from eastern Europe, but ministers say the pandemic is to blame.

In a bullish conference message to the Tory faithful, Johnson vowed to forge ahead with his post-Covid recovery plan to "build back better" in areas from infrastructure to climate change.

Interviewed by the BBC on Sunday, he refused to return Britain to its "broken" pre-Brexit economy which he said was overly reliant on cheap foreign labour.

"What we can't do in all these sectors is simply go back to the tired, failed, old model and reach for the lever marked uncontrolled immigration, with people at low wages," he said.

"So yes, there will be a period of adjustment."

Johnson and Sunak are also under pressure from the Conservative right for raising Britain's tax burden, in part to deal with a crisis in elderly care.

The prime minister said there was "no fiercer and more zealous opponent of unnecessary tax rises than me, but we have had to deal with a pandemic on a scale which this country has not seen before in our lifetimes and long before".

"If I can possibly avoid it, I do not want to raise taxes again, of course not, nor does Rishi Sunak," Johnson told the BBC.

However, many analysts expect Sunak to do just that after he sets out a budget review in late October, as the Treasury battles to balance the books after its huge pandemic spending.

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