Sunak facing big challenges over latest pandemic support package
RISHI Sunak is expected to unveil another short-term Covid support package to see firms through to the summer.
The Chancellor is looking at spending £30billion on extending the furlough scheme, a VAT cut for retail and hospitality, stamp duty exemption and a business rates holiday until June.
With the Budget coming next week, he is also expected to bring tax hikes on big business.
To try to claw back some of the support cash, corporation tax hikes from 19 to 25 per cent are reportedly being considered.
Mr Sunak is facing intense pressure to resist imposing tax rises until the country’s recovery from the pandemic is under way.
A Treasury source said: “The Chancellor has always put protecting jobs and livelihoods at the heart of everything he has done and that will not change.
Promises
“This Budget will give people the reassurance they need in the immediate term and he will be honest with the British people about how we are going to recover beyond this crisis.”
But former chancellor Philip Hammond said it was time for the Government to ditch “very extravagant” commitments from its manifesto, which included promises not to increase income tax,VAT and national insurance.
He said: “My fear is that, as a populist government, giving money away is always easier than collecting it in.”
Figures show the number of people on furlough went up by around 700,000 in January as harsher lockdown restrictions were imposed at the beginning of the month. Around 4.7 million people
were furloughed on January 31.As of February 15, some £53.8billion had been claimed since the furlough scheme began last year.
In total, 11.2 million employees across the UK have been given cash under the scheme, which pays up to 80 per cent of salaries to those who cannot work because of Covid restrictions.
Meanwhile, a group of 69 Conservative backbenchers wrote yesterday to Mr Sunak calling for beer duty to be cut.
Tory MP Richard Holden said: “Our pubs are at the heart of our communities and lockdown has hit them hard.While the Government support has been welcome, it has not made up for the massive impact of being closed for so long.
“The best encouragement for publicans and the public is to see real action on beer duty.”