LONDON (Reuters) – Some 8.4 million employees in Britain are covered by a state wage subsidy scheme for temporarily laid-off workers, up 400,000 from last week, finance minister Rishi Sunak said as he prepares to tell companies how they will share some of the cost.
FILE PHOTO: Britain’s Chancellor of the Exchequer Rishi Sunak attends a news conference on the ongoing situation with the coronavirus disease (COVID-19) in London, Britain, March 17, 2020. Matt Dunham/Pool via REUTERS/File Photo
The value of claims for wage subsidies filed by employers rose to 15 billion pounds ($18.4 billion) as of May 24 from 11.1 billion pounds a week earlier, the finance ministry said.
Britain’s job retention scheme is the centrepiece of its attempts to cushion the coronavirus hit to the economy by prevent a surge in unemployment.
Sunak earlier this month extended the scheme by four months until the end of October but told employers they would have to help to meet its soaring cost from August.
Sunak is due to announce this week how much employers will have to contribute. He is also expected to set new rules on how the scheme will allow part-time working, something employers have said they need to get back up to speed after the lockdown.
“Our support schemes continue to deliver for people and businesses up and down the country,” Sunak said.
The finance ministry said small businesses had borrowed more than 18 billion pounds under a government-guaranteed coronavirus credit programme during its first three weeks of operation, outpacing bank lending under other schemes for bigger firms.
Britain’s government offers banks a 100% credit guarantee on loans of up to 50,000 pounds under its Bounce Back Loan Scheme (BBLS) after an earlier programme with an 80% guarantee made slow progress.
The BBLS has lent 18.49 billion pounds to 608,069 small businesses as of May 24, up from 14.2 billion pounds by May 17.
By contrast an earlier programme that lends up to 5 million pounds, the Coronavirus Business Interruption Loan Scheme, has only lent 8.15 billion pounds since its launch in March.
Banks have approved about half of loan applications under CBILS so far, compared with 79% for the BBLS.
Sunak initially opposed offering full state guarantees for bank lending, due partly to the risk of bad debts, but allowed it for the smallest firms after pressure from business groups, legislators and the Bank of England.
($1 = 0.8126 pounds)
Reporting by William Schomberg and Andy Bruce, editing by Estelle Shirbon