Sunak Boosts Jobs Funding Plan as U.K. Braces for Tough Winter

(Bloomberg) -- Chancellor of the Exchequer Rishi Sunak said he’ll spend hundreds of millions of pounds to help people find jobs, as he seeks to rebuild the U.K.’s pandemic-hit economy and as pressure builds over a cost of living crisis.

Household budgets are coming under growing strain after a cap on energy bills jumped 12% on Friday, wider inflation has surged above 3%, and the government is unwinding a series of measures that have helped workers and the unemployed through the Covid-19 outbreak.

Boris Johnson’s government has also faced a backlash, including from members of the ruling Conservative Party, over the timing of its decision to end a temporary boost to welfare payments this week.

But ministers have repeatedly said they see the solution in boosting jobs and pay rather than benefits. On Monday, Sunak will announce a 500 million-pound ($678 million) expansion of jobs programs, according to remarks released in advance of his speech to the Tories’ annual conference in Manchester. 

That will help “hundreds of thousands of people” into work, according to the statement. 

‘Whatever It Takes’

“At the start of this crisis I made a promise to do whatever it takes, and I’m ready to double down on that promise now,” Sunak said in a statement. “The job is not done yet and I want to make sure our economy is fit for the future and that means providing the support and skills people need to get into work and get on in life.”

While business welcomed Sunak’s measures to boost skills and jobs, both the chancellor and Johnson face growing pressure to help Britons struggling with the rising cost of living, amid warnings of a “winter of discontent.”

The conference is bookended by two Treasury decisions that affect millions of people: The closing of its flagship furlough program on Sept. 30, after it protected the wages on 11.6 million jobs, and the ending of a temporary increase to Universal Credit worth 20 pounds a week.

Compounding the sense of crisis is a shortage of truck drivers, which has snarled supply chains and led to empty shelves in supermarkets and gas stations running dry. 

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All of which threatens the U.K.’s economic recovery and has given opposition parties a stick to beat the Conservatives with. Already some rank-and-file members of the Tory party are calling for measures to help struggling Britons. 

‘Working Families’

Sunak’s jobs plan has not created enough opportunities and has “failed to address the supply chain crisis Britain is experiencing,” Jonathan Reynolds, the opposition Labour Party’s spokesman on work and pensions, said in a statement. The measures “will do nothing to compensate for the chancellor’s tax rises, cost of living crisis and cuts to Universal Credit which are set to hammer millions of working families.”

A Savanta ComRes poll for the Independent on Sunday newspaper found that just 19% of voters support the cut to Universal Credit, and 59% either want the uplift maintained or raised. Even among Conservative voters, more oppose scrapping the measure than support doing so.

Sunak appeared relaxed about his speech on Sunday, posting a picture of himself on social media channels smiling broadly and wearing one of his trademark hoodies, while balancing his speech on two cushions on a table, in place of a podium.

The statement credited the first stage of Sunak’s ‘Plan for Jobs’ -- rolled out in July 2020 -- with saving almost 2 million positions. The chancellor’s speech will focus on jobs and young people, and he’ll set out a vision for “a future economy shaped by the forces of science, technology and imagination,” the Tory party said. 

Full costings of the new measures will be published in the spending review on Oct. 27, when Sunak is also due to deliver a budget.

The Confederation of British Industry, welcomed the new measures for “pivoting from furlough to economic recovery.”

“With record vacancies and widespread labor shortages, this package’s success will be measured by its ability to get people back into work,” CBI Chief Policy Director Matthew Fell said in a statement. “Nearly all of us will need to gain new skills between now and 2030.”

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