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* Sunak expands help for businesses and self-employed
* Hard-hit hospitality sector to get new grants
* Sunak had previously resisted calls for more help
* Labour opposition says Sunak must get ahead of crisis
(Adds reaction from hospitality industry, estimate of cost)
By David Milliken and William James
LONDON, Oct 22 (Reuters) - British finance minister Rishi
Sunak was forced to offer billions of pounds more of financial
help on Thursday to businesses grappling with a resurgent
COVID-19 pandemic, which looks increasingly likely to derail the
economic recovery.
Sunak told parliament that the government would shoulder
more of the burden for paying wages of staff who return
part-time to struggling businesses, and would offer more money
to hospitality companies and the self-employed.
The move, Sunak's third major announcement in the space of a
month, marks a further turnaround after he resisted calls to
make government support schemes more generous.
Opponents, policy analysts and some businesses said it was
obvious that more help would be needed, and that it should have
come sooner.
Britain, the European nation worst-hit by the pandemic with
more than 44,000 COVID-19 related deaths, is now seeing a second
wave of the virus, recording 26,688 new cases on Wednesday.
"I've always said that we must be ready to adapt our
financial support as the situation evolves, and that is what we
are doing today. These changes mean that our support will reach
many more people and protect many more jobs," Sunak said.
He told parliament the economy was under "enormous strain"
and that more jobs would still be lost.
Over the next six months COVID job support measures and
grants to the self-employed and hospitality industry could cost
around 13 billion pounds ($17 billion) in total, with the
enhanced job support scheme accounting for about half the cost.
Government borrowing in the first half of the financial year
is already more than six times higher than before the COVID
pandemic at 209 billion pounds.
'JOBS SAVED'
Some sectors are now in dire straits. An official survey
published earlier on Thursday showed more than a third of
hospitality companies say they are at risk of going bust.
Sunak said he would offer a new grant aimed at hospitality
businesses in areas worst affected by the resurgence in
infections which will be worth up to 2,100 pounds per month and
can be claimed retrospectively to August.
Kate Nicholls, head of the UK Hospitality trade body, said
it was a "huge and very welcome" intervention. "Just saved
hundreds of thousands of jobs in hospitality and supply chain,"
she said on Twitter.
The body had previously warned that more than half a million
jobs were under threat.
Sunak changed the forthcoming Job Support Scheme, which is
designed to dissuade businesses from making people redundant
after the furlough scheme shuts at the end of this month and
instead keep workers on reduced hours.
Businesses will now only have to pay 5% of the cost of wages
for unworked hours, compared with 33% previously. Staff will
also only need to be employed for one day a week, down from a
third of their usual hours, further cutting the cost to
employers.
Sunak also doubled the grants for self-employed people from
20% to 40% of their previous incomes.
His Labour Party opposition counterpart Anneliese Dodds said
Sunak had failed to get ahead of the crisis.
"This is becoming like a long-running television show, 'The
Winter Economy Plan: Series 3'. But you know the twist is, it
didn't last the winter, it didn't do enough to help the economy,
and it wasn't a plan," she said.
The head of the Resolution Foundation think-tank, Torsten
Bell, said Sunak had done the right thing, but that the delay
had been damaging.
"Doing it earlier, given the obvious flaws, would have saved
more jobs, but at least we've got to the right place 10 days
ahead of the Job Support Scheme coming into effect," Bell said.
($1 = 0.7640 pounds)
(Writing by Andy Bruce; Editing by Sarah Young and Catherine
Evans)
