Sunak scraps budget, readies support to fight Covid crisis
September 24 2020 12:31 AM
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Commuters wearing protective face coverings travel on Victoria line at rush hour in central London yesterday.

Guardian News and Media/Reuters/London

Rishi Sunak has scrapped this autumn’s budget before the announcement of a revamped support package to protect jobs and the economy through a looming winter Covid-19 crisis.
Faced with the new threat to the economy caused by the tightening up of coronavirus restrictions this week, the chancellor believes the priority is to see the UK through the coming months rather than make long-term tax and spend decisions.
A Treasury source 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 that 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.”
Sources said Sunak had been working on contingency plans over the summer in case the pandemic required it, with that work going on in parallel with preparations for the budget.
The chancellor will use an update on the economy to parliament tomorrow to announce new support for jobs threatened by the new measures to stop the virus spreading.
Prime Minister Boris Johnson had on Tuesday set out new rules and guidance to stem the spread of infection, including early closing for pubs and restaurants — many of which are only just recovering after a full lockdown in the spring.
He also advised people to work from home if they can, abandoning a push to get office workers back into city centres to help the ailing economy.
“No-one wanted to be in this situation but we need to respond to it,” the source said.
The Guardian revealed on Tuesday that one of the measures he was considering was a German-style wage subsidy scheme to protect the jobs market..
The chancellor tweeted: “As our response to coronavirus adapts, I will update the House of Commons on our plans to continue protecting jobs through the winter.”
The announcement comes after increasing pressure on the chancellor to reveal the details of his plan to replace the furlough scheme, which covers 80% of workers’ wages and ends at the end of October.
A wage subsidy scheme is under consideration, as the Treasury races against a deadline next week to avoid millions of redundancies nationwide.
Employers seeking to make fewer than 100 redundancies must hold a 30-day consultation, meaning October 1 is the last point they could start this process before the furlough scheme closes.
Meanwhile, the UK yesterday  reported 6,178 new coronavirus cases, a marked jump in the daily infection rate. It follows a rise of 4,926 the day before, and brings the total confirmed cases in Britain since the pandemic hit to 409,729.
With a further 37 deaths reported in the past 24 hours, 41,862 people in Britain who tested positive for the virus have now died — the highest toll in Europe.
The director of the Rosalind Franklin Institute and professor of structural biology at the University of Oxford, James Naismith, called the spike in cases “unwelcome news”.
“It is part of a trend and there is no doubt the virus is taking off again,” he added, attributing the rise to an expanded testing regime.



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