Rishi Sunak calls off autumn Budget as he prepares new ‘winter economy plan’

Rishi Sunak has cancelled plans for a Budget later this year amid fears over the economic impact of a second wave of coronavirus.

Questions had already been raised over whether the Chancellor’s set piece autumn announcement, broadly penned in for November, would go ahead.

But the Treasury this afternoon confirmed it had been put back to allow him to focus on dealing with the impact of the second wave of coronavirus on the economy.

Mr Sunak this afternoon confirmed he will  tomorrow outline plans to protect millions of jobs and save thousands of businesses from going under as a new round of coronavirus restrictions threatens to throttle the UK economy.

The Chancellor is to set out his ‘Winter Economy Plan’ in the House of Commons tomorrow amid growing unrest from MPs and businesses over the return of working from home and new restrictions on hospitality firms.

Facing calls for a Furlough 2.0 scheme to be set up he tweeted: ‘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. ‘

The Chancellor is being urged by business chiefs to ‘get around the table’ and agree new job support measures after Boris Johnson ditched his back to work drive and imposed a range of new coronavirus restrictions. 

Companies fear the new crackdown will deal a hammer blow to already struggling firms especially with the furlough programme closing at the end of October.

But reports suggest Mr Sunak is planning a new scheme to prevent job losses after retail bosses warned that up to a million furloughed workers could be made redundant without another bailout.  

The mooted plans being looked at by the Chancellor would see the Government and firms share the cost of topping up wages for employees who are only able to work part-time because of the pandemic.

Sir Keir Starmer put the pressure on Mr Johnson on the issue during PMQs today as he said ending furlough meant ‘health measures and economic measures are now dangerously out of sync’.

Mr Johnson replied: ‘Let’s be in absolutely no doubt that the work that this Government has done to protect the economy of this country, to support the jobs of 12 million people through the furlough scheme and overall expenditure of about £160 billion has been unexampled anywhere else in the world.

‘I think he should pay tribute to the Chancellor and his work and we will go forward with further creative and imaginative schemes to keep our economy moving.’ 

The Government’s furlough scheme has helped support almost 10 million jobs during the crisis, covering up to 80 per cent of an employee’s wages up to a maximum of £2,500 a month. 

It is now in the process of being wound down and will formally close at the end of next month after racking up a bill of more than £39 billion.

There were already calls from opposition politicians and business groups for the scheme to be extended even before Mr Johnson announced his latest coronavirus curbs yesterday. 

But the Prime Minister’s decision to encourage workers to work from home where they are able to and impose a 10pm curfew on the hospitality sector, potentially for the next six months, has spooked businesses and accelerated calls for more help to be brought forward. 

Luke Johnson, an entrepreneur and former Pizza Express boss, told BBC Newsnight he believed one million furloughed workers could be axed if the Government does not put in place new financial support measures. 

He said: ‘Rates relief and loans to businesses have made a hell of a difference and if they are extended they will help.

‘There are still three million people probably on furlough and many of those jobs are at risk if lockdowns in some form or fashion continue and severe restrictions remain in place.’ 

He added: ‘It may be that they are simply, all the subsidies are cut off and in which case I would estimate that of the perhaps three million at least a million maybe more will be made redundant because I think those companies will be feeling very demoralised and not confident about investing and rebuilding and possibly they are insolvent therefore they close down altogether.’ 

Bank of England governor Andrew Bailey said yesterday it was time to ‘stop and rethink’ the end of the furlough scheme as he advocated adopting a new more targeted approach.

The Trades Union Congress (TUC), which outlined its furlough replacement proposal last month, said the Government must ‘fast-track a new plan’ to protect jobs.

TUC general secretary Frances O’Grady said: ‘We have published detailed proposals for a new short-time working and upskilling scheme.

‘With the right approach we can stop mass unemployment scarring millions.

‘My message to ministers is clear: let’s get around the table and fast-track a new plan.’