By David Milliken
LONDON (Reuters) - Britain's government should extend a costly job support programme until the end of the year for retail and hospitality workers hit hardest by the coronavirus, a think tank said on Tuesday, ahead of an expected government announcement.
The Resolution Foundation said the scheme should remain open to workers in all sectors until early August - more than a month longer than planned - and that businesses should be able to bring workers back part-time from June.
Finance minister Rishi Sunak is due later on Tuesday to address the future of the Coronavirus Job Retention Scheme, which currently supports more than 6 million jobs but is scheduled to expire at the end of June.
Sunak has said there will be no 'cliff edge' and Prime Minister Boris Johnson said on Monday the government would continue to offer some support to workers who have been temporarily put on leave.
"Obviously it can't last for ever and we are going to have to make changes. (Sunak) is going to announce the details of that," Health Secretary Matt Hancock told LBC radio on Tuesday.
But the government is keen to ensure businesses and workers do not become too reliant on the programme, which government forecasters estimate will cost 49 billion pounds ($60 billion)in its first three-and-a-half months of operation.
The Resolution Foundation, which called for a similar programme before Sunak launched it in March, said it would prove complex to unwind.
"Moving too quickly could cause a second surge in unemployment, while moving too slowly would fail to support the recovery," researchers Torsten Bell, Laura Gardiner and Daniel Tomlinson said.
Former Bank of England governor Mervyn King said he also supported an extension of the scheme.
"I hope that (Sunak) will extend these support schemes today to give businesses some comfort, needed comfort, over the next few months," King told BBC radio.
Last week, the BoE said the economy could shrink by more than a quarter during the three months to June, and unemployment approach 10% of the workforce, even with the government support for a quarter of private-sector employees.
From June, employers should be allowed to bring back workers on a part-time basis while still receiving the 80% government subsidy for hours which staff do not work, the Resolution Foundation said, a request also made by business groups.
Johnson said on Monday that coronavirus infections had peaked, and that people who could not work from home should return to their workplaces if possible.