British workers whose hours were cut because of the coronavirus pandemic could receive new government wage subsidies in the near future. Britain's treasury chief has proposed measures aimed at preventing further layoffs when current subsidies expire next month.
The new measures, proposed Thursday by Chancellor of the Exchequer Rishi Sunak, are in response to a call from businesses and labor unions for the government to provide additional support.
Right now the government pays up to 80% of wages workers made before they were furloughed, but the proposal would pay 77% of pre-pandemic wages. The payment would be dependent on employers allotting workers at least one-third of their pre-pandemic hours.
The treasury chief hopes that will ensure fewer workers are laid off.
"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 said of the proposed measures.
He said similar support will be offered to the self-employed.
Businesses that took out loans would also have more time to pay them back. Those include $43.8 billion in loans to 1 million small businesses that could be eligible to "pay as you grow."
"Businesses who are struggling can now choose to make interest-only payments and anyone in real trouble can apply to suspend repayments all together for up to six months," Sunak said.
The treasury chief also said he will extend until March 31 the temporary reduction in the valued-added tax rate for the hospitality and tourism industries, which have been particularly hard hit by the pandemic. The cut to 5% from 20% had been scheduled to end in January.