Pressure on Government ramping up to extend coronavirus financial support

The Prime Minister said the Government will introduce “further creative and imaginative schemes to keep our economy moving” while speaking during Prime Minister’s Questions today.

Labour leader Sir Keir Starmer asked why business support was not announced at the same time as greater Covid-19 restrictions on Tuesday.

Calls have ramped up for a new lifeline for firms after Mr Johnson announced six months of tougher restrictions that threaten the economic recovery, as fears also grow of mass unemployment once the furlough scheme ends on October 31.

But Mr Johnson replied: “Let’s be in absolutely no doubt that the work that this Government has done to protect the economy of this country, to support the jobs of 12m people through the furlough scheme, enabled expenditure of about £160bn has been unexampled anywhere else in the world.

“And I think he should pay tribute to the Chancellor and his work and we will go forward with further creative and imaginative schemes to keep our economy moving.”

It comes as Bank of England governor Andrew Bailey said it was time to “stop and rethink” the furlough scheme in favour of a targeted approach.

While the Trades Union Congress (TUC), which outlined its furlough replacement proposal last month, said the Government must “fast-track a new plan” to protect jobs.

TUC general secretary Frances O’Grady said: “We have published detailed proposals for a new short-time working and upskilling scheme.

“With the right approach we can stop mass unemployment scarring millions.

“My message to ministers is clear: let’s get around the table and fast-track a new plan.”

During PMQs, Labour’s Grahame Morris (Easington) said: “We know the CBI and the TUC, businesses and unions, employers and workers, and now even the Bank of England, are united in their call for a targeted expansion of the Covid Job Retention Scheme.

“And make no mistake, there’s a tsunami of job losses in the pipeline within 38 days. So will the Prime Minister please listen to that advice and take urgent action?”

Mr Johnson replied: “And what I can tell the House is that in addition to the package that I set out yesterday, as I’ve said earlier on, there will be creative and imaginative measures from the Chancellor to help people through this crisis.”

Whiles Clacton Tory MP Giles Watling called for more help for freelancers and the self-employed.

It is believed Mr Sunak postponed an announcement due today to extend emergency loan schemes in favour of a bigger support package.

One option reportedly being considered is a scheme similar to Germany’s highly-praised Kurzarbeit, or shorter work-time policy, under which firms can radically cut working hours in economic downturns with the state replacing part of their lost income.

The TUC has proposed a similar scheme that would see workers receive 80 per cent of their salary for the hours they are not in work.

Companies would get a 70 per cent subsidy from the Government, provided they bring back every worker on the scheme for a minimum proportion of their normal working hours.

Another proposal put forward by the CBI business group would see subsidies for firms that can offer staff at last 50 per cent of their normal hours, with the cost for non-working hours shared equally by the company, the Treasury and the employee.

The Treasury declined to comment.