UK unveils new pandemic support for workers

Manchester (United Kingdom) (AFP) –


Britain's finance minister unveiled on Monday measures to help people find jobs after the government came under attack for ending a furlough scheme that kept millions employed during the pandemic.

In his debut in-person address to the Conservative Party's annual conference as finance minister, Rishi Sunak announced the government would extend programmes created during the outbreak to get people into work.

His ministry said the full package was worth £500 million ($680 million, 580 million euros) and would include retraining older workers coming off furlough and younger Britons.

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 the furlough scheme ended last Thursday, which Sunak accepted would lead to job losses, while a weekly boost to benefits for the lowest-paid workers was also being scrapped.

The chancellor of the exchequer 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.

However, he said during his speech the government's actions during the pandemic had protected 11 million jobs.

- Tax hike? -

"Forecasters were predicting unemployment to reach 12 percent," he recalled of the early days of the lockdown, when he said "it really did feel like the world was collapsing.

Protesters accused the UK's Conservatives of abandoning the poor
Protesters accused the UK's Conservatives of abandoning the poor Ben STANSALL AFP/File

"The forecasts were wrong. The unemployment rate is at less than five percent and falling.

"It wasn't that the forecasters had bad models. It's just their models did not take account of one thing, and that was this Conservative government and our will to act," he told the conference in Manchester, north west England.

Now the focus was on "providing the support and skills people need to get into work and get on in life", which depended on putting public finances "on a sustainable footing."

Addressing the fiscal conservatives in the audience, Sunak said he wanted tax cuts, but that the "recovery comes with a cost" that needs to be repaid.

Many analysts therefore expect Sunak to raise taxes after he sets out a budget review in late October, as the Treasury battles to balance the books after its huge pandemic spending.

But protesters at the conference 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.

British Prime Minister Boris Johnson vowed to never return Britain to its "broken" pre-Brexit economy
British Prime Minister Boris Johnson vowed to never return Britain to its "broken" pre-Brexit economy Ben STANSALL AFP/File

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."