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Sunak to Unveil U.K. Furlough Details After Scottish Demands

(Bloomberg) — U.K. Chancellor of the Exchequer Rishi Sunak is expected to unveil details of his wage support program Thursday, amid calls from his own side for more generous help for people who can’t work due to coronavirus restrictions.The Treasury announced on Saturday it would extend furlough payments at 80% of employee wages until Dec. 2 to support workers in England during a second lockdown that starts Thursday.Sunak is due to announce further extending the furlough program beyond Dec. 2 in those areas kept in the highest levels of coronavirus restrictions, according to the Sun newspaper, citing unidentified sources. The Treasury did not immediately respond to a request for comment on the Sun report.With the U.K. in the grip of a fresh wave of coronavirus — recording another 492 deaths Wednesday — the chancellor is under pressure to loosen the fiscal taps again after he began reducing support to the economy. He’s also being urged to guarantee that furlough support will be available in all parts of the U.K., even if places such as Scotland enter a lockdown at a later date.Sunak’s effort to bolster the economy is due to receive a boost from the Bank of England: the BOE is poised to reveal a new round of monetary stimulus Thursday morning. Economists expect the central bank to increase its bond-buying target by 100 billion pounds ($130 billion), though the Sun reported that it could increase the target by as much as 200 billion pounds.On reforms to the furlough program, former Health Secretary Jeremy Hunt — who now chairs the House of Commons’s Health Committee — called for payments to people required to self-isolate to be made more generous and less onerous to apply for.At present, people on low incomes who are required to self-isolate because they have symptoms of coronavirus, or have come into contact with a positive case, are eligible for a 500 pound grant. However, the applicant must also provide a number of documents to the government.“It’s just got to be an awful lot simpler,” Hunt, a senior Conservative, said in an interview. “If your employer doesn’t pay your wages, we’ll pay your wages for the period of time you have to isolate. End of story.”Johnson said the chancellor will provide “further elucidation on the details of the entire package of support that this government is bringing for the people of the entire U.K.” when he makes his statement, which is scheduled for about 12:30 p.m. Thursday.Furlough SupportSunak will address the question of whether the furlough support — at 80% of wage levels — will be available to any parts of the U.K. in lockdown, including Scotland and Wales, beyond the current end date of Dec. 2, according to a person familiar with the matter.Johnson indicated Wednesday that the program will be made available to the U.K.’s other constituent nations beyond the end of the English lockdown.“I really do not know how to exhaust my affirmative vocabulary any further,” Johnson said in Parliament, when pressed on the issue repeatedly by the Scottish National Party. “They won’t take yes for an answer.”The furlough extension was announced last Saturday just hours before the Treasury’s flagship program was due to be replaced with a less generous system of support for workers. It was the third major update of support levels for businesses and workers since the chancellor unveiled a winter economy plan Sept. 24 that was supposed to tide the country’s businesses through the months ahead.The constantly changing levels of support have increasingly frustrated businesses. Sunak’s counterpart in the main opposition Labour Party, Anneliese Dodds, urged him to set out a six-month plan for the economy and abandon “this last-minute scramble” to roll out new measures.That chimes with calls from Carolyn Fairbairn, director general of the country’s biggest business lobby, the Confederation of British Industry, who said Sunak should provide companies with more clarity on the path forward.“As lockdown shutters come down for many firms, extending furlough till next spring is the right thing to do,” she said on Twitter. “Firms and employees need more certainty and stability to plan and recover.”(Updates with Sun report of Sunak announcement, Johnson comment from third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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