Chancellor Set To Announce ‘Furlough Replacement’ As Budget CANCELLED

New support measures for both businesses and employees impacted by the latest round of coronavirus restrictions will be unveiled today amid warnings of a ‘bloodbath’ of job losses over winter, in particular the hospitality sector.

Chancellor Rishi Sunak has cancelled his autumn budget and will instead launch a ‘Winter Economy Plan’ to address how he will bolster the economy in the wake of the deepening crisis. His initiative is expected to include VAT cuts, loans for hard-hit businesses and wage subsidies, and could also see the Government and firms share the cost of topping up wages for employees only able to work part-time due to the pandemic.

The treasury said work on a scheme had been taking place in conjunction with Budget preparations and the focus has been on jobs to avoid the expected three million unemployed.

The Treasury said: ‘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.

‘That’s what people deserve.’

The furlough scheme, which has so far cost the government £39.3bn expires at the end of October.

At Prime Minister’s Questions yesterday the Prime Minister was again urged to act by MPs and prevent a “tsunami of job losses” when the furlough scheme ends next month.

The Labour leader Sir Keir Starmer highlighted Whitbread’s announcement to cut 6,000 jobs earlier this week in the hospitality sector, which will continue to be affected by the tighter Covid-19 measures, which could be in force for six months.

The prime Minister said the Chancellor was working on “creative and imaginative” solutions, which could be modelled on the “kurzabeit” programme in Germany and a similar one operating in France.

It comes after the Bank of England governor Andrew Bailey called on the government to “stop and rethink” the decision to end the furlough scheme next month.