UK cancels budget and plans to set out jobs aid amid second wave instead

UK cancels budget and plans to set out jobs aid amid second wave instead

Chancellor of the Exchequer Rishi Sunak. Picture: PA

UK Chancellor of the Exchequer Rishi Sunak cancelled his planned autumn budget and prepared to set out a fresh round of job-support measures as the coronavirus pandemic worsens.

Mr Sunak will announce his blueprint to protect jobs from the economic fallout from Covid-19 in a statement to the UK Parliament on Thursday, days after Prime Minister Boris Johnson imposed new restrictions on the UK to bring the resurgent virus outbreak under control.

The moves are a sign the UK government is gearing up for months of economic disruption. 

The chancellor is facing intense demands to extend his furlough wage support program or set out measures to replace it as the pandemic drags on.

“As our response to coronavirus adapts, [tomorrow afternoon] I will update the House of Commons on our plans to continue protecting jobs through the winter,” Mr Sunak said in a tweet. 

Ministers say the chancellor is drawing up plans for a “targeted” programme of support to replace the policies that paid 80% of workers’ wages and supported more than 10 million jobs during the first peak of the pandemic.

The furlough programme is due to close at the end of October, and Mr Sunak has said he won’t extend it beyond that date.

But he is weighing up other forms of support, including a German-style programme to top up wages of workers who return to their jobs part-time.

The cost of the UK’s wage subsidies for workers and the self-employed has surpassed £50bn. 

Brexit pushback

The UK government also faced a push back over Brexit plans as the logistics industry slammed a government warning that 7,000 trucks could be backed-up at Dover, saying its operators shouldn’t be painted as “villains” when they haven’t been given the means to prepare.

“Don’t start pointing the finger of blame in our direction when you have still to provide all of the tools to do the job,” Robert Keen, director general of the British International Freight Association, or Bifa, said.

“Give our members all the information they need, and systems that actually work, and they will be more than able to do what is necessary,” he said.  

Bifa's angry reaction followed a letter from Cabinet Office minister Michael Gove which urged traders to prepare for new border controls when the UK leaves the EU’s single market and customs union at the end of the year. 

The letter said as many as 70% of trucks may not be ready to enter the EU and the flow of freight between Dover and Calais -- a vital trade artery -- could be cut by as much as 80% below normal levels.

“The biggest potential cause of disruption are traders not being ready for controls implemented by EU Member States on 1 January 2021,” Mr Gove wrote in the letter. “It is essential that traders act now and get ready for new formalities.”

The EU is determined to get a Brexit trade deal with Britain but will be firm and realistic with Prime Minister Johnson decided to break the divorce agreement, EU chief negotiator Michel Barnier has said. 

-Bloomberg and Reuters   

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