Chancellor set to unveil furlough replacement after Budget cancellation

Chancellor Rishi Sunak has cancelled this year’s Budget but is set to unveil new measures aimed at protecting employment and the UK economy in parliament later today (24 September).

It is thought the new measures will replace the current furlough scheme, which is set to expire at the end of October, and will aim to combat the impact of coronavirus and the latest set of restrictions announced by the government. 

From today, all pubs, bars and restaurants will be required to close by 10pm and Covid-secure rules are now a legal requirement for all businesses.

It is believed the new measures may include a scheme, modelled on the one in Germany, in which the government and firms “top up” the wages of part-time workers who are returning after being furloughed.

An extension to the VAT cut for hospitality and to the various loan guarantee schemes offered by the Treasury are also expected.

Taking to Twitter Sunak 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.” This was followed by a graphic titled ‘Winter Economy Plan’. 

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. pic.twitter.com/eP6aqcocxd

— Rishi Sunak (@RishiSunak) September 23, 2020

The news comes after representatives of the TUC and Cambridge Econometrics called for the government to seek more industry counsel and create a “new and improved” furlough scheme, in order to support affected businesses through the latest restrictions.

Speaking on BBC Radio 4’s Today programme, Andrew Sentance, senior advisor to Cambridge Econometrics and Paul Nowak, deputy general secretary for the TUC, said that the government must extend the scheme in a “targeted way” which would strike a balance between the “range of stakeholders” at play.