LONDON -- The British government is on Friday set to announce further support for firms to retain staff in the coming months if they are forced to close as a result of the imposition of further lockdown restrictions. With the government likely to tighten restrictions over the coming days to deal with a sharp spike in new coronavirus infections, there are growing concerns that the economy will take a new hit and hundreds of thousands of jobs may be lost. Treasury chief Rishi Sunak said he understood how "people are worried about the coming winter months."
He is being urged by businesses, politicians and unions to ensure that firms can survive any further lockdown measures and prevent mass unemployment. Specifically, he is being urged to back local job retention programs, whereby the government steps in to pay the lion's share of the salaries of workers who are forced to go idle. A national program that has helped keep a lid on unemployment is due to stop at the end of October.
"The Chancellor will be setting out the next stage of the Job Support Scheme later today that will protect jobs and provide a safety net for those businesses that may have to close in the coming weeks and months," a Treasury spokesman said. Britain already has Europe's deadliest outbreak, with over 42,600 dead. The latest daily figures published Thursday showed 17,540 new cases, more than double the level of the previous week.
The number of people being hospitalized increased by 609 while the death toll rose by 77. There are huge differences between regions, which has led to calls for more concerted local actions. Prime Minister Boris Johnson is expected to announce within days new restrictions on everyday life in England, potentially in the big northern cities such as Liverpool, Manchester and Newcastle.
Restrictions are already being tightened on Friday in Scotland, where pubs in the two biggest cities, Glasgow and Edinburgh, have been ordered to close for 16 days. Any enforced closure of pubs and restaurants in parts of England will represent a bitter blow as they only reopened in early July from a shutdown that started on March 20. They account for a lot of jobs and economic activity and were the main motor of growth in August.
New figures released Friday showed that the hospitality sector was largely behind the 2.1% growth recorded from the previous month. The sector was boosted by many people's decision to take their holidays in the U.K. instead of going abroad, as well as the government's dining discount scheme during the month. Under the Eat Out to Help Out program, sitting customers could receive a 50% discount on food and non-alcoholic drinks at participating restaurants between Monday and Wednesday up to 10 pounds (£13) per person.
Since August, the sector has suffered amid the virus spike and the government's decision to impose a 10 p.m. curfew last month. The British economy lost nearly a quarter of its output at the height of the lockdown in spring, when many sectors were closed and those people still working were encouraged to do so from home. Since May, when lockdown measures were eased, the economy has grown for four months, recovering much of the output lost.
However, at the end of August the economy was still 9.2% smaller than before the pandemic. ------ Follow AP coverage of the virus outbreak at https://apnews.com/VirusOutbreak and https://apnews.com/UnderstandingtheOutbreak
UK economy stutters in August despite dining discount Wire Services/ ABC News.