Great Britain restricts short-time work: "Many will probably lose their jobs now"

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British Treasury Secretary Rishi Sunak (left), Prime Minister Boris Johnson

Photo: Martyn Wheatley / i-Images / imago images / i Images

The British government has announced that it will give the UK economy and labor market more support due to the severe Corona recession.

Finance Minister Rishi Sunak announced a new aid program designed to keep employees on short-time work during the crisis and avoid layoffs.

Actually expiring tax cuts for the hospitality industry, which is particularly badly affected by Corona, should also be extended and loan repayments by companies postponed.

It is about "radical interventions in the British labor market - a policy that we have never tried in this country," said Sunak when presenting an "economic winter plan" in Parliament.

"The main goal of our economic policy remains unchanged: to secure people's jobs."

Sunak also admitted: "I cannot save every company, I cannot save every job".

Expert warns of job cuts

The heart of the new measures is a replacement for the short-time work program "Coronavirus Job Retention Scheme", which expires next month and which, at its peak in May, supported 8.9 million jobs in the private sector.

In the future, help should only be provided if an employer lets the employees concerned work at least a third of their normal working hours.

The government and employer should each pay one-third of the normal hourly rate for hours not worked, up to a maximum of £ 698 (€ 765) per month.

"The government will directly support workers' wages and salaries and give companies faced with weak demand the option of reducing their workforce instead of laying them off," Sunak told parliament.

According to tax data, around five million jobs were supported by the old program at the end of July.

The statistics authority assumes that at the beginning of September it was still around one in eight employees.

Corona hits Great Britain hard - not only economically

However, experts are skeptical as to whether the measures will actually be sufficient to prevent many employees from falling into unemployment.

The government's plans actually meant a "very large deviation" from the previous short-time work regulation, tweeted economist Paul Johnson from the IFS Institute.

Of course, the government cannot "pay all wages forever. But many who are currently on short-time work will probably lose their jobs now."

The pandemic has killed nearly 42,000 people in the UK so far - more than any other country in Europe.

The UK is raising record sums to pump money into the economy.

Gross domestic product collapsed by more than a fifth in the second quarter, while German economic output, for example, shrank less than half as much at 9.7 percent.

The picture looks similar for the year as a whole.

The Organization for Economic Co-operation and Development (OECD) predicts a decline of 10.1 percent for the British economy and a decline of 5.4 percent for the German economy.

Finance Minister Sunak announced that it would extend the VAT cut for hotels, cafes and restaurants until March 31, 2021.

He also unveiled a new program designed to allow companies more flexible repayment of loans taken out during the corona crisis.

You now have up to ten years instead of six years to repay it.

The opposition Labor Party criticized that the new aid came too late.

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beb / dpa