Britain’s treasury chief is expected to announce billions of pounds in tax cuts and spending increases to help workers and businesses hit by the coronavirus pandemic when he delivers his budget to Parliament on Wednesday
By DANICA KIRKA Associated Press
March 3, 2021, 11:53 AM
• 2 min read
LONDON -- Britain’s treasury chief is expected to extend job support programs and temporary tax cuts to help workers and businesses hit by the coronavirus pandemic when he delivers his budget to Parliament on Wednesday.
Rishi Sunak said in a tweet he will announce a three-part plan to “protect the jobs and livelihoods of the British people” when he speaks to House of Commons at 12:30 p.m. London time.
British media reports indicate Sunak will extend the furlough program, under which the government pays 80% of the wages for private employees unable to work during the pandemic. He also plans to expand grants for self-employed workers, while extending a temporary increase in welfare payments and tax relief for businesses.
While the pandemic has pushed public borrowing to levels not seen since World War II, economists say the stimulus programs need to continue as large parts of the economy remain shut down by restrictions designed to control the pandemic. The government has announced plans to ease lockdown measures following the rapid roll out of COVID-19 vaccines, but many businesses are expected to remain closed until June 21.
Economists are already wondering about what will come next. Torsten Bell, of the Resolution Foundation, said plans need to be made to prevent levels of unemployment from skyrocketing once the furlough program ends.
“The big picture is when it comes to unemployment the more difficult part of this crisis is ahead of us rather than behind us,'' he told Times Radio. “So it is true as the furlough scheme is phased out — however that phasing out is done, whether that’s via employment contributions rising or just via the scheme being brought to an end — some of those jobs won’t be there for people to go back to.''
Former International Monetary Fund chief economist Ken Rogoff compared the pandemic to a war and said the government should be looking at catastrophe relief.
“We are in the middle of a war and you should not be worrying excessively about the budget deficit and about debt,'' he told the BBC about his advice to Sunak. “You can worry about that at the other side.''
