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Rishi Sunak is unveiling an emergency COVID rescue plan to protect jobs that is expected to include wage subsidies, VAT cuts, and more cheap loans for struggling businesses.
In a dramatic move, the chancellor scrapped a fall budget and will instead launch a “Winter Economy Plan” after parliamentarians and unions warned of the risk of a “tsunami” of job losses.
The goal is to help the economy cope with the new coronavirus restrictions announced by Boris Johnson this week, including a 10 p.m. curfew for pubs and restaurants and ordering office staff to work from home.
And as the government prepared to launch its NHS COVID-19 app, the latest figures showed 6,178 new coronavirus cases in the UK, bringing the total number to 409,729.
The centerpiece of the billion-pound package is expected to be a scheme, inspired by one in Germany, in which taxpayers subsidize the wages of workers who return to work part-time after being discharged.
Other measures are likely to extend a VAT cut to 5% for the hospitality and tourism industries devastated by the lockdown, which was introduced earlier this year, from next January to the end of March.
And four loan plans for the worst-hit businesses are likely to be extended through the end of November, with terms increasing from six to ten years to lower monthly payments.
The chancellor has taken the unusual step of not having his November Budget because “now is not the right time to outline long-term plans and people want to see us focused on the here and now,” it was revealed.
A Treasury source told Sky News: “No one wanted to be in this situation, but we must respond to it. The chancellor has shown that he has been creative in the past and we hope that people will trust us to continue along that line.”
“Giving people and companies peace of mind the help they need to overcome this is the most important thing to him.”
According to the Treasury, the chancellor promises a “flexible and adaptable approach to economic support, because people have needed help and they have needed it quickly and at the right time.”
Allies said he would be “very honest with people” about the “tough tradeoffs” the government faces as it tries to deal with the twin challenges of rising infection rates and the economic recession.
“This is not about health versus the economy, but about the balance between keeping people in jobs and finding new ones,” said a source.
And the source added: “What remains true is that our priority is one word: jobs.”
In preview of the chancellor’s statement, the prime minister told MPs: “What we will do is continue to surround the people of this country who are going through a very difficult time and propose the appropriate creative and imaginative schemes to keep them working to maintain the economy. moving “.
That prompted Labor MP Grahame Morris to demand a specific expansion of a COVID job retention scheme and tell Mr Johnson: “Make no mistake: a tsunami of job losses is coming in 38 days.”
Later, in a television speech responding to the prime minister’s broadcast 24 hours earlier, the Labor leader Sir keir starmer He urged the government to draw up a “plan B” for the economy ahead of the workers’ leave plan that ends in October.
“It makes no sense to introduce new restrictions at the same time as phasing out support for jobs and businesses,” he said, while warning of a “wave of job losses this winter.”
The workshop workers union also warned of “a tsunami of job losses” and called for an online sales tax to save Main Street.
“If we are going to save Main Street, there needs to be radical and bold action to level the playing field between online retail stores and physical stores,” said Secretary General Paddy Lillis. “The time has come for the government to seriously consider introducing some form of online sales tax.
“As a society we have a choice, we want to see the main street go to the wall or we want to save it. Retail is the cornerstone of our towns, cities and communities. It employs some three million people and urgently needs assistance to get the industry back on track. get back “.
