Chancellor says return of Covid-19 furlough scheme ‘not on the cards’
Chancellor Rishi Sunak has said a return of the furlough scheme is “not on the cards” as he stressed the UK government does not envisage having to impose any “significant economic restrictions” to deal with the continuing fallout from the Covid-19 pandemic.
Mr Sunak said the ongoing vaccine rollout was the “best line of defence against having to move to put in place any restrictions”.
Speaking on BBC One’s The Andrew Marr Show yesterday, he said there were no plans to reinstate the coronavirus job retention scheme, even as the number of positive cases continues to increase.
Mr Sunak said: “That’s not on the cards because we don’t envisage having to impose significant economic restrictions in the way that we had to over the last year, and the reason for that is, although we’ve always said the winter was going to be challenging, the big change is the vaccine rollout, which is our first line of defence.
“The best way to protect us through the winter is to get the booster campaign, making sure that that’s firing on all cylinders, everyone gets their booster jab when they’re asked. That’s the best line of defence.”
Mr Sunak said Wednesday’s Budget would be “about looking to the future and building a stronger economy for the British people”.
He said: “That means strong investment in public services, driving economic growth by investing in infrastructure, innovation and skills, giving businesses confidence, and then supporting working families. Those are the ingredients of what makes a stronger Budget and that’s what we will deliver.”
Asked if there would be a return to austerity, he replied: “As I said, one of the elements of building a stronger economy is having strong public services and you will see that next week.”
Mr Sunak said he wanted to be a tax-cutting Chancellor, despite the fact his government raised National Insurance across the UK to pay for social care in England.
“Of course, my instincts are to do that, that’s what I believe,” he said. “I want people to better keep more of their money, I want to reward people for working. I think that is a good thing and I think that will help drive economic growth.
“But as we discussed, I’ve also had to grapple with an economic shock, the biggest in 300 years, borrowing that [is] the highest since World War Two, and things like the elective backlogs in the NHS being at record levels, which we want to make progress on. Those are some of the challenges.”
Mr Sunak also said public sector workers would have to wait until Wednesday to discover if they are in line for a pay rise.
He said: “That will be one of the things that we talk about next week in the spending review. Obviously over the past year, we took a decision to have a more targeted approach to public sector pay given that the year before there were large increases and obviously the private sector was seeing pay decreases last year, and people were on furlough.
“We thought that was reasonable and fair. Now going forward, we’ll have to set a new pay policy and that will be a topic for next week’s spending review.”
The Chancellor will head to the House of Commons with a focus on transport links outside London, research and development in health, and a “skills revolution”.
Although some 11 areas of investment were announced by the Treasury over the weekend, Mr Sunak is also expected to impress on MPS the importance of keeping public finances in a healthy state.
Some big-ticket items for investment already announced include:
■ £7 billion for areas outside of London to “level up” transport;
■ £5bn for health-related research and development, including towards genome sequencing and tackling health inequalities;
■ £3bn to drive a “skills revolution”;
■ A £1.4bn fund to funnel money into key innovative sectors and a new talent network to woo foreign talent into UK industries;
■ £850 million to “breathe life” back into cultural hotspots;
■ £700m for a new fleet of patrol boats for Britain’s borders;
Separately, the Sunday Mirror reported the Chancellor will plan to push the minimum wage to £10 by the next general election from its current level of £8.91 an hour.
And writing in the Sun on Sunday, Mr Sunak said “there are positive signs that we’re on the road to recovery” after the havoc wrought on public finances by Covid-19.
He said: “Coronavirus has meant our economy has taken a hit. And in order to recover strongly, we need to be responsible because everything comes at a cost.
“And the money we spend is yours, the taxpayer’s money, not anyone else’s. Earlier this year, I said I would be honest with the country about the challenges we face to ensure our public finances get back on to a strong footing.”
He added: “The experiences of the last 18 months have made me more certain of how important a strong and resilient economy is.
“That is why this week’s Budget and Spending Review will set out a plan to deliver the people’s priorities, support business, help our recovery, ease pressures on the cost of living but also to strengthen the public finances, so we have a stronger economy for the British people.”