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UK Unveils New £30 Billion Package to Stimulate Economy, Will Pay Bonuses to Bring Workers Back into Jobs

FILE PHOTO: Britain's Chancellor of the Exchequer Rishi Sunak speaks during a daily news conference on the coronavirus disease (COVID-19) outbreak, at 10 Downing Street in London. (Reuters)

FILE PHOTO: Britain's Chancellor of the Exchequer Rishi Sunak speaks during a daily news conference on the coronavirus disease (COVID-19) outbreak, at 10 Downing Street in London. (Reuters)

Under the plan -- part of a broader programme of measures -- employers would be paid 1,000 pounds ($1,256) for every worker who returns to their job after the furlough scheme expires at the end of October.

The UK government on Wednesday unveiled a package worth £30 billion ($37 billion, 33 billion euros) to save jobs and help the young into work to kickstart the coronavirus-hit economy.

Delivering a mini-budget to parliament, finance minister Rishi Sunak's measures included bonuses to companies retaining staff and taking on apprentices, investment in 'green' jobs and allowing the whole country to enjoy discounted meals in restaurants.

"People need to know that although hardship lies ahead, no-one will be left without hope," said Chancellor of the Exchequer Sunak.

Noting that "people are anxious about losing their jobs, about unemployment rising", Sunak told the country. "We're not just going to accept this."

Other measures included a temporary cut to the level of value added tax on food, accommodation and attractions -- and lifting the threshold at which stamp duty tax is due on home purchases to help the construction sector.

Britain has suffered Europe's deadliest outbreak of COVID-19 and a nationwide shutdown led to the worst economic contraction among the G7 leading industrialised states.

Britain's government will seek to head off an unemployment crisis by paying bonuses to employers to bring workers back to their jobs from the state's coronavirus emergency furlough scheme, said Sunak.

Under the plan -- part of a broader programme of measures -- employers would be paid 1,000 pounds ($1,256) for every worker who returns to their job after the furlough scheme expires at the end of October, Sunak told parliament.

"I want every person in this House and in the country to know that I will never accept unemployment as an unavoidable outcome," Sunak said. "We haven't done everything we have so far just to step back now and say, 'job done'. In truth, the job has only just begun."

Sunak is already on course to take state borrowing to World War Two levels as he subsidises 9 million jobs on the furlough scheme -- equivalent to more than a third of private-sector workers -- and supports the incomes of 2 million self-employed.

With close to 45,000 coronavirus-linked deaths, Britain has been hit harder by the pandemic than any other European country. For the worst-affected sectors of an economy that shrank by 25% over March and April, recovery remains a long way off.

Sunak, a 40-year-old former Goldman Sachs analyst who became finance minister in February, has won plaudits for setting aside the pro-market instincts of his Conservative Party to put the state at the heart of Britain's COVID-19 response.

"We entered this crisis unencumbered by dogma and we continue in this spirit, driven always by the simple desire to do what is right," Sunak said in his speech on Wednesday.

Sunak's plan also includes a 2 billion pound ($2.5 billion) fund to create six-month work placement jobs for unemployed 16-24 year-olds and the largest ever rise in partly government-funded apprenticeships.

Sunak said he will spend a further 3 billion pounds to improve the energy efficiency of homes and public buildings, which would support more than 100,000 jobs.

He also raised a threshold for a tax on property purchases to 500,000 pounds, four times its current level, with immediate effect until March 31 to help breathe life into the housing market and the broader economy.

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