U.K. Chancellor of the Exchequer Rishi Sunak presented on Thursday a new package of economic and fiscal measures designed to cope with the impact of the recent rise of coronavirus infections—a package he hoped he could avoid after having lobbied against the new restrictions decided by his boss, Prime Minister Boris Johnson, earlier this week.
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As expected, Sunak directed the government’s efforts both on businesses, for which he has extended government-guaranteed loan programs devised in March, and workers, with a system subsidizing part-time work, inspired by the successful Germany “Kurzarbeit” (short work) example.
Sunak also announced in his presentation to Parliament that a value-added tax rate cut for hotels and restaurants would be extended until March next year
The U.K. finance chief noted that the situation is now different from what it was in March, as the economy “is now likely to undergo a more permanent adjustment.”
“The sources of our economic growth and the kinds of jobs we create will adapt and evolve to the new normal,” he added.
Sunak earlier this week said he would scrap the traditional budget plans he was due to present in October and instead present a “winter economy” plan, when it became clear that the new spike of the virus would call for more government action to support the economy.
After several local and regional lockdowns were ordered in the last two months, Johnson announced earlier this week new nationwide restrictions, notably the closure of restaurants and pubs at 10 p.m. every day, and more severe enforcement of social distancing rules. He also encouraged people to work from home to the extent possible.
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