Sunak to extend business support loans: report

Rishi Sunak (REUTERS/Toby Melville/File Photo)

Chancellor Rishi Sunak is set to extend the Treasury’s UK-wide programme of business support loans to help companies affected by the coronavirus pandemic, the Financial Times reported late on Sunday.

Sunak is expected to unveil plans to extend its four loan schemes for applications until the end of November, with banks allowed to process loans until the end of the year, the newspaper said.

As Britain’s unemployment rate rose for the first time since the coronavirus lockdown began in March, the chancellor is also facing fresh calls to extend the job subsidy programme which is due to expire next month.

The unemployment rate increased to 4.1 per cent in the three months to July from the 3.9 per cent level it had clung to since early 2020.

Sunak’s coronavirus job subsidy scheme has shielded millions of workers, and the number of people in employment fell less than feared in the figures published on Tuesday.

Although redundancies rose by 48,000 to 156,000, the biggest increase in over 10 years, so far they are well below their peak during the 2008 financial crisis.

Job losses are likely to accelerate in September and October when employers, many of whom are already worried about the prospect of a Brexit trade shock in the coming months, will have to pay more towards the cost of the furlough scheme.

Sunak – who has said he cannot keep extending the job protection scheme, which is estimated to cost £54 billion over its March-October duration – faced calls from lawmakers in his own Conservative Party to give targeted help to workers in sectors hardest hit by the pandemic.

“I have not hesitated to act in creative and effective ways to support jobs and employment, and will continue to do so,” he told parliament.

The leader of the opposition Labour Party urged the government to hold urgent talks with the trade unions, businesses and Labour to come up with support and training programmes.

All options – including the Trades Union Congress’ job protection and skills upgrade plan and schemes similar to Germany’s short-time work programme – should be looked at, Keir Starmer told the annual conference of the TUC.

“But the principles are clear. Expand part-time working and reward employers who keep people on rather than cutting jobs… Target those sectors most in need – for example retail, hospitality…Provide certainty for workers and businesses,” he said.