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by Alain Tolhurst
24 September 2020
Rishi Sunak to unveil furlough replacement as UK Government scraps budget

Aaron Chown/PA Wire/PA Images

Rishi Sunak to unveil furlough replacement as UK Government scraps budget

Rishi Sunak will no longer deliver an Autumn Budget after the Treasury said “now is not the right time to outline long-term plans”.

Instead the Chancellor will update MPs on Thursday lunchtime about his “plans to continue protecting jobs through the winter”.

The government has come under pressure to extend the furlough programme, which is due to come to a close at the end of October, after Boris Johnson unveiled tighter coronavirus restrictions this week.

It has repeatedly ruled out continuing the Job Retention Scheme, which has paid the wages of almost 10 million workers during the pandemic, but Sunak now seems set to unveil a further set of policies to prevent mass job losses from November onward.

He had been due to deliver a Budget in November alongside a Comprehensive Spending Review setting out departmental budgets for the next four years, whose status is now also unclear.

In a statement the Treasury said: "As we heard this week, now is not the right time to outline long-term plans - people want to see us focused on the here and now.

"So we are confirming today that there will be no Budget this autumn."

That came shortly after a tweet from the Chancellor, who posted a graphic saying “winter economic plan” with the message: "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."

At Prime Minister’s Questions on Wednesday Johnson was urged to act by MPs and prevent a "tsunami of job losses” when the furlough scheme ends.

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

The PM said Sunak was working on "creative and imaginative" solutions, after reports he was looking at a salary top-up scheme, 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.

Scottish Finance Secretary Kate Forbes said the decision to scrap the budget was "breathtaking in its disregard for Scotland, Northern Ireland and Wales."

She said: "It is completely unacceptable that Scotland, and the other devolved administrations, are being put in this position once again and underlines the need for us to have full financial powers to ensure we are not affected by UK budgetary decisions like this.” 

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