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UK government expands its job support program with stricter virus lockdowns due next week

Chancellor of the Exchequer Rishi Sunak leaves 10 Downing Street after attending a Cabinet meeting on 14 February, 2020.

Barcroft Media

LONDON — The U.K. government has expanded its jobs support program as the country gears up for tighter coronavirus restrictions set to be announced next week.

Finance Minister Rishi Sunak said Friday that firms whose premises have to shut over the winter period as part of local or national restrictions will receive grants to pay the wages of staff who cannot work.

The British government will pay two thirds of employees’ salaries to protect their jobs over winter. Cash grants to businesses in England which are required to close will increase to up to £3,000 ($3,893) per month.

The new program will come into effect on Nov. 1 and will last for six months. The BBC reported that the expansion could cost hundreds of millions of pounds per month.

In a statement, Sunak called to “safety net for businesses across the U.K. who are required to temporarily close their doors, giving them the right support at the right time.”

The extra financial support comes ahead of further coronavirus restrictions which are widely expected to be announced late on Monday, with infections continuing to see a sharp rise.

Britain has reported 564,518 cases since Covid-19 first emerged late last year, with 42,682 deaths. Meanwhile, the Office for National Statistics said Friday morning that cases in England had doubled to around 17,200 per day in the latest week to Oct. 1, versus 8,400 per day in the previous week.

Two weeks ago, Sunak announced the first iteration of the Job Support Scheme — a new emergency package of measures to contain unemployment, replacing the U.K.’s furlough scheme which is due to expire at the end of October.

It will directly top up the wages of employees working fewer hours due to suppressed business demand, enabling workers to keep their jobs on shorter hours rather than being made redundant.

The original furlough scheme in the summer had subsidized 80% of wages for millions of workers furloughed as a result of the pandemic. But Sunak confirmed in July that it would be wound down as the country began to emerge from coronavirus lockdown measures.

—CNBC’s Elliot Smith contributed to this article.

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