Sunak to set out more jobs support

Chancellor Rishi Sunak is preparing to announce a local job furlough scheme for workers at businesses forced to close by new Covid-19 restrictions.

Little more than two weeks after setting out his winter economic plan with reduced support for jobs Sunak has agreed further measures with Prime Minister Boris Johnson, the Financial Times reported.

The government is responding to pressure from the Labour opposition and leaders of northern cities that have complained about being left out of discussions about coronavirus restrictions. The economic outlook became more gloomy on Friday as official figures showed growth lower than expected for August.

Sunak is withdrawing his national furlough measures at the end of October and replacing it with a scheme that will pay up to 22% of wages for workers able to do their jobs part-time. He has said the government will not support jobs that are unviable.

But many businesses have said they cannot support part-time workers and have been forced to close by restrictions in cities such as Manchester and Liverpool. The Conservatives won a swathe of former Labour seats in the North of England at the 2019 election and cannot afford to ignore the region's protests.

"The chancellor will be setting out the next stage of the job support scheme later today [Friday] that will protect jobs and provide a safety net for those businesses that may have to close in the coming weeks and months," a Treasury official told the FT.

Keir Starmer, the Labour leader, accused the government of "losing control" of the Covid-19 crisis and has questioned the thinking behind a 10pm curfew for bars and restaurants that the industry says has hit takings badly.

"People aren't asking for miracles - they just want to know that the prime minister has a plan and a strategy in place," Starmer wrote in the Daily Telegraph, which has been a strong supporter of Johnson.

Covid-19 cases are rising rapidly in the UK, prompting fears of another national lockdown over the winter that could hammer the economy again. Economists have also warned of a return to 1980s levels of mass unemployment as businesses are forced to shed workers.