Coronavirus: Cost of job subsidy schemes tops £35bn

The cost of taxpayer subsidies for jobs has climbed above £35bn while the value of business loans underwritten by the government has reached £45bn, the latest figures on the impact of COVID-19 show.

They come as Chancellor Rishi Sunak prepares to deliver an economic update while under pressure to give more help to a struggling economy that has seen thousands of jobs axed in recent weeks.

Meanwhile, data from the Office for National Statistics (ONS) released at the same time illustrates how the lockdown – and working from home – has been taking its toll on productivity across the UK workforce.

Britain’s coronavirus job retention scheme – which has been paying out 80% of the wages of furloughed workers – has so far cost £27.4bn, according to Treasury data up to 5 July.

That is up on £25.5bn the week before.

The scheme – which is now closed to new applicants and gradually being tapered off before closing at the end of October – has now supported 9.4 million people working for 1.1 million employers.

A separate scheme supporting 2.7 million self-employed workers has now cost a total £7.7bn.

Britain’s Office for Budget Responsibility (OBR) has estimated that together the schemes will eventually cost the government £75bn, though some of the money will come back in income tax.

Data on the bounce-back loan scheme for small businesses hit by the pandemic, which are 100% backed by the Treasury, showed they reached £30.9bn.

Just over a million such loans have been issued.

Two other schemes for medium-sized and larger businesses, which are 80% Treasury backed, account for £11.5bn and £2.6bn, the updated figures show.

Elsewhere, Office for National Statistics (ONS) data covering the first quarter of the year showed a 0.6% fall in productivity – as measured by output per hour – compared with a year earlier.

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