The UK’s Coronavirus Job Retention Scheme was introduced in March on the principle that a balance between keeping people safe from the coronavirus pandemic and protecting the economy could only be struck with unprecedented support from the government.
 
Now that this programme is coming to an end amid a second wave of Covid-19 infections and new restrictions are being enforced across the country, there is renewed pressure on chancellor Rishi Sunak to come up with alternatives.
 
After hours of working on “creative and imaginative” solutions, as the prime minister put it, the chancellor will this afternoon update the House of Commons on the UK government’s plans to continue protecting jobs through the winter.
 
According to The Times, today’s announcement will feature a multibillion package of support measures, including wage subsidies for part-time workers, VAT cuts, and more loans for struggling businesses. The successor to the furlough scheme could look a lot like the German Kurzarbeit (“short work”) system, through which the Treasury would pay the wages of employees for short-time working – between at least 50% to 60% of their normal hours.
 
Crucially, this new phase in the coronavirus crisis has led Sunak to scrap the autumn budget entirely, as he believes the government’s priority is to see the UK through the coming months, rather than to make long-term tax and spending decisions. The move could cause tension with devolved governments, which need the clarity of a budget to set their own spending limits and avoid depending on estimates.
 
In Scotland, first minister Nicola Sturgeon already hinted at her daily briefing yesterday she would “likely” have closed pubs and bars if she had “had the ability to bring more financial firepower to mitigate the jobs and economic impact”.
 
Providing the right economic support will certainly be key to avoid a short-term economic crisis as businesses all across the UK struggle to keep workers on the payroll. Yet losing sight of the longer term in the process can become, as the Spanish idiom goes, bread today, hunger tomorrow. Who said striking a balance was easy?