The Courier & Advertiser (Fife Edition)

Sunak cancels Budget to focus on protecting jobs

Winter Economy Plan unveiled amid pressure to extend furlough scheme

- SIMON NEVILLE

Rishi Sunak has cancelled this year’s Budget and will instead prioritise protecting millions of jobs in sectors hit by the latest government guidance on Covid-19.

The Treasury said the chancellor would outline his plans to extend and replace financial support during an appearance in Parliament today.

The appearance will be closely watched in Tayside and Fife for its implicatio­ns on the Tay Cities Deal.

The local cash investment was due to be signed off next month and confirmed as part of the autumn budget.

The much-anticipate­d deal is expected to be worth £700 million and will fund projects across the region, including the controvers­ial Cross Tay Link Road, and create thousands of jobs.

The chancellor’s move comes after pressure from business groups, MPs and unions to extend the furlough scheme as stricter restrictio­ns are introduced.

Number 11 said work on the scheme had been taking place in parallel with Budget preparatio­ns and the focus has been on jobs to avoid the expected three million unemployed.

The Treasury said: “We will always be honest with people about the difficult trade-offs that are involved here.

“Not between health and the economy, but between keeping people in jobs and helping them find new ones. And between help in the here and now and rebuilding in the future. That’s what people deserve.”

The chancellor initially announced his move via Twitter, with a graphic titled “Winter Economy Plan”.

No further details were provided and it came as the government confirmed more than 6,000 new coronaviru­s cases by 9am yesterday, the highest daily number since May 1.

A source close to the Treasury said: “No-one wanted to be in this situation but we need to respond to it.

“The chancellor has shown he has been creative in the past and we hope people will trust us to continue in that vein.

“Giving people reassuranc­e and businesses the help they need to get through this is uppermost in his mind.”

The move followed comments by Prime Minister Boris Johnson about a “creative and imaginativ­e” action plan to protect jobs, with unions and business leaders pointing to schemes used in other European countries. Bank of England governor Andrew Bailey said on Tuesday it was time to “stop and rethink” the furlough scheme in favour of a targeted approach.

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.

The mooted plans would reportedly see the government and firms share the cost of topping up wages for employees only able to work part-time due to the pandemic.

Ministers are desperate to avoid a second lockdown, with the associated economic damage, and early indicators suggesting the recovery has slowed.

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

Another proposal put forward by the CBI would see subsidies for firms that can offer staff at last 50% of their normal

“The chancellor has shown he has been creative in the past and we hope people will trust us to continue

hours, with the cost for non-working hours shared equally by the company, the Treasury and the employee.

At Prime Minister’s Questions, Mr Johnson was repeatedly challenged about the prospect of support being withdrawn from firms and workers despite the prospect of latest restrictio­ns being in place for six months.

The furlough scheme has cost the government £39.3 billion to date, with £3.9 billion between August 16 and September 20 alone, according to the latest figures.

“What we will do is continue to put our arms around the people of this country going through a very tough time and come up with the appropriat­e creative and imaginativ­e schemes to keep them in work and keep the economy moving,” he said.

Labour leader Sir Keir Starmer asked “when is the prime minister finally going to act” in the face of calls from Mr Bailey, the CBI and trade unions to continue some form of support after furlough ends.

 ??  ?? Chancellor Rishi Sunak will outline his plans to extend and replace financial support today.
Chancellor Rishi Sunak will outline his plans to extend and replace financial support today.

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