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Sunak cancels Autumn Budget and readies new support scheme

Telegraph reporters
·2-min read
Rishi Sunak
Rishi Sunak

Rishi Sunak has cancelled his planned October Budget and will announce new job support measures as the UK’s coronavirus pandemic worsens.

The Chancellor will reveal his plans in the Commons on Thursday just days after Boris Johnson imposed new national restrictions aimed at bringing a second wave under control.

The Treasury said work on the scheme had been taking place in parallel with Budget preparations.

"We will always be honest with people about the difficult trade-offs that are involved here - not between health and the economy, but between keeping people in jobs and helping them find new ones. And between help in the here and now and rebuilding in the future."

Mr Sunak has been under mounting pressure from business groups, MPs and unions to extend furlough.

On Tuesday Bank of England Governor Andrew Bailey said it was time to "rethink" the scheme in favour of a targeted approach.

The UK recorded 6,178 new cases of Covid-19 in the past 24 hours - the highest daily total since May 1.

Six months to the day since lockdown was imposed, there have been 409,729 confirmed cases of the virus in Britain.

Mr Sunak’s decision indicates that the Government is gearing up for months of economic disruption.

He has been under intense pressure to extend the furlough scheme, which is due to finish at the end of October, 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,” Sunak tweeted.

The Chancellor is drawing up plans for “targeted” support to replace the policies that paid 80pc of workers’ wages and supported more than 10m jobs during the first peak of the pandemic.

Although Mr Sunak has repeatedly vowed not to keep the furlough scheme running, he is expected to opt for 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 now surpassed £50bn, according to figures published on Tuesday.