Britain can no longer put normal life on hold, Rishi Sunak warned yesterday.
As he unveiled his latest rescue package to save jobs, the Chancellor called on the nation to learn to live with coronavirus ‘without fear’.
He added that the country could not carry on ignoring the economic impact of the pandemic.
Striking a different tone to the Prime Minister’s cautious, health-focused address to the nation on Tuesday, Mr Sunak said the ‘wider’ costs of Covid had to be taken account of in the coming weeks.
He added: ‘Our lives can no longer be put on hold. We have so often spoken about this virus in terms of lives lost. But the price our country is paying is wider than that.
‘As we think about the next few weeks and months, we need to bear all of those costs in mind.’
In his statement to the Commons yesterday, Mr Sunak confirmed the furlough scheme will not be continued past October 31 – despite warnings that at least two million jobs could be lost by January.
In its place will come a more modest wage subsidy scheme, which could still cost taxpayers an extra £9billion over the next six months. There will also be a package to help businesses.
Chancellor of the Exchequer Rishi Sunak holds a copy of his Winter Economy Plan outside No 11 Downing Street before heading for the House of Commons to give MPs details of his Winter Economy Plan
Boris Johnson raised eyebrows in the Commons by skipping his Chancellor’s flagship statement to pay a visit to police recruits in Northampton.
Downing Street strenuously denied suggestions of a rift between the two men. And for his part, Mr Sunak stressed he backed the Prime Minister’s latest Covid crackdown.
But in his statement yesterday, the Chancellor called for Britain to learn to live with the virus. ‘What was true at the beginning of this crisis remains true now,’ he said. ‘It’s on all of us. And we must learn to live with it and live without fear.’
Mr Sunak said it was right to ‘throw everything we’ve got’ at saving ‘viable jobs’. And, with Mr Johnson warning new restrictions are set to last for at least six months, he said it was time to face up to the ‘awful’ trade-offs and hard choices involving health, education and employment.
The Chancellor admitted the economy was now ‘likely to undergo a more permanent adjustment’, with some jobs disappearing for good.
Boris Johnson raised eyebrows in the Commons by skipping his Chancellor’s flagship statement to pay a visit to police recruits in Northampton
Commuters cross London Bridge on September 24 in London, England. Beginning in November when the current furlough scheme ends, the government will subsidise the pay of employees who are working fewer hours due to lower demand
On another day of crisis:
- Mr Sunak extended the 15 per cent VAT cut for the hospitality and tourism sectors until the end of March;
- Cheap business loans were extended, with firms told they can now repay over ten years and take payment holidays;
- The Chancellor hinted at future tax rises, warning he would have to make ‘very difficult decisions’ in future;
- Cases of the virus jumped again, with 6,634 recorded in a single day;
- The cost of the troubled test-and-trace system was revealed to have risen to £12billion;
- Nicola Sturgeon banned Scottish students from going to the pub following a string of outbreaks in universities.
Mr Sunak said there had been ‘no harder choice’ than the decision to axe the furlough scheme, which has helped prop up 9.5 million jobs.
But he said it was ‘fundamentally wrong to hold people in jobs that exist only inside the furlough’.
He said the Government needed to create ‘new opportunities’ for people, adding: ‘I cannot save every business. I cannot save every job.’
The furlough scheme has seen the state pay 80 per cent of people’s wages if their jobs had disappeared because of the lockdown.
The new Job Support Scheme will provide help for those in ‘viable’ jobs who work at least a third of their normal hours.
Passengers on the Jubilee Line on London’s underground on Thursday morning. The Prime Minister Boris Johnson addressed the nation this week regarding new coronavirus restrictions
Employers will pay for the hours actually worked, while they and the Treasury will then cover two-thirds of the pay for missed hours.
The scheme, which will last for six months, means the state will subsidise no more than 22 per cent of a worker’s wages up to a maximum of £697.92 per month.
The Treasury declined to put an overall cost on it, but Mr Sunak suggested the bill would be roughly £300million a month for every million workers on the scheme.
Officials believe anywhere between two and five million could join the scheme, potentially generating a bill of up to £9billion over its lifetime. By comparison, the furlough scheme has cost around £6billion a month.
Critics warned the scheme – drawn up with the Confederation of British Industry and Trades Union Congress – would not be enough to head off mass unemployment.
The Institute for Fiscal Studies said it was ‘significantly less generous’ and would lead to ‘sharply rising unemployment’, as jobs which relied on state funding will cease to exist.
Shadow Chancellor Anneliese Dodds said the package of measures ‘comes too late for many people who have already lost their jobs’.
A Treasury spokesman said the criticism ‘doesn’t reflect the real world’, adding: ‘For employers the value in the scheme is the flexibility to change working patterns by the week and the value they get from retaining their skilled and experienced workforce.’
CBI director-general Dame Carolyn Fairbairn welcomed the ‘bold steps’, but added: ‘Further business rates relief should remain on the table.’