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UK: Chancellor unveils Winter Economy Plan

24th Sep 2020
UK: Chancellor unveils Winter Economy Plan

By Karim El-Bar

LONDON (AA): British Chancellor Rishi Sunak announced a range of economic measures on Thursday to deal with the continuing fallout from the coronavirus pandemic.

He cancelled his scheduled Autumn Budget, and announced a Winter Economy Plan instead.

Central to the plan is a new wage subsidy scheme that will encourage firms to keep their employees in short-term contracts rather than fire them.

It will last for the next six months, and only protect viable jobs and those employees who work at least a third of their regular hours.

They will be paid two-thirds of their remaining pay, with the employer and government paying a third each. This means someone who works 33% of their hours gets 77% of their wages.

Sunak also announced a Pay As You Grow scheme, that will extend bounce back loans for a decade, up from the previously announced six years. This will halve firms’ monthly repayments. It is also an indicator of the long-term damage the Treasury expects the pandemic to inflict on the economy.

The hospitality sector, hit hardest by the pandemic, will have the cut to their VAT rates to 5% extended until March 31, 2021.

Sunak ended his statement in the parliament, saying: “Today’s measures mark an important evolution in our approach. Our lives can no longer be put on hold. Since May, we have taken steps to liberate our economy and society.

“We did these things because life means more than simply existing. We find meaning and hope through our friends and family, through our work and our community.”

“The truth is the responsibility for defeating coronavirus cannot be held by government alone. It is a collective responsibility shared by all because the cost is paid by all,” he said.

“We must learn to live with it [coronavirus], and live without fear.”

Carolyn Fairbarin, the director-general of the Confederation of British Industry, said: “These bold steps from the Treasury will save hundreds of thousands of viable jobs this winter.

“It is right to target help on jobs with a future, but can only be part-time while demand remains flat.”

Frances O’Grady, the general secretary of the Trades Union Congress, tweeted: “Unions have been pushing hard for jobs support to continue. We are pleased Rishi Sunak has listened and done the right thing. This scheme will provide a lifeline to firms with a viable future beyond the pandemic.

“But there’s still unfinished business. Unworked hours under the scheme must not be wasted. Government must work with businesses and unions to offer high-quality retraining so workers are prepared for the future economy.”

[Archive Photo: Chancellor Rishi Sunak leaves 10 Downing Street to go to the House of Commons to make the Summer Statement 8 July 2020. Picture by Pippa Fowles / No 10 Downing Street.]

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Over 120 people attended a landmark conference on the media reporting of Islam and Muslims. It was held jointly by The Muslim News and Society of Editors in London on September 15.

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