The British government, facing a potential avalanche of layoffs in the fall, announced a host of tax and spending measures on Wednesday to preserve and create jobs in Britain as the nation reopens its economy.
Rishi Sunak, chancellor of the Exchequer, laid out to Parliament a 30 billion pound, or $37.7 billion, spending plan that included tax cuts, employment coaching and even a 50 percent discount for diners who go to restaurants and pubs. The measures are designed to support the economy as it transitions away from a robust program that subsidized workers’ wages during lockdown.
“Despite the extraordinary support we’ve already provided, we face profound economic challenges,” Mr. Sunak said. “Taken together in just two months, our economy contracted by 25 percent, the same amount it grew in the previous 18 years.” With more job losses forecast, he added: “I will never accept unemployment as an unavoidable outcome.”
But he said Britain’s furlough program, which has paid up to 80 percent of the wages of 9.4 million workers since March, would end in October, as previously announced. Keeping it longer, he said, would provide “false hope” to workers. Instead, employers will receive £1,000 for each employee they bring back to work through January.
Britain’s unemployment rate has been held down at 3.9 percent thanks to the popular furlough payments. The Organization for Economic Cooperation and Development warned on Tuesday that the rate could climb to 11.7 percent by the end of the year, and even higher if there was a second wave of coronavirus infections.
Mr. Sunak presented plans to support the hospitality and tourism industry, including a temporary 15 percentage-point cut to VAT, a type of sales tax, to 5 percent. He also announced an “Eat Out to Help Out” initiative, in which the government would pay for a 50 percent discount on some meals eaten in restaurants and pubs, up to £10 per person.
In addition, the Treasury is planning to spend £3 billion to make public buildings greener, and offer vouchers to be spent on home insulation as part of the government’s effort to reduce net carbon emissions to zero by 2050 through energy efficiency. Mr. Sunak also said there would be a temporary reduction in the stamp duty, a tax on home purchases.
Mr. Sunak, 40, has been thrust into the limelight from relative obscurity during this pandemic. He was made chancellor — Britain’s top financial officer — in February just weeks before the government shut down most of the economy. He gained popular support by quickly spending £130 billion to prop up businesses and pay wages through the furlough program, in a break from the Conservative Party’s historically austerity-focused approach to economic crises.
But some in his party have balked at the cost of the spending, as the size of Britain’s debt is now greater than the gross domestic product. Mr. Sunak said he had now switched the focus to returning people to their jobs, using policies that tinker in different corners of the economy before a more comprehensive review of the budget is expected later in the year.
Some analysts said the collection of measures contained few surprises. “The solutions proposed are familiar: construction, house prices and a short-term consumer boost,” Mark Gregory, the United Kingdom chief economist at EY, wrote in a note. “There is unlikely to be an increase in business investment until we have a clearer view of the government’s long-term vision and plans for the U.K. economy.”
But Kallum Pickering, a senior economist at Berenberg Bank, said the “fresh buffet” of initiatives would “pack a sizable punch and support higher private spending with significant implications for hard-hit sectors such as construction, housing and hospitality.”
Others were afraid the measures weren’t bold enough. Pointing to the £1,000 bonus paid to employers to bring workers back from furlough, Torsten Bell, chief executive of the Resolution Foundation, a research group focused on policies to improve living standards, said it amounted to “a bit of cash support” for firms that were probably going to bring back workers anyway.
Frequently Asked Questions
Updated July 7, 2020
Is the coronavirus airborne?
The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization.
What are the symptoms of coronavirus?
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
What’s the best material for a mask?
Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles.
Is it harder to exercise while wearing a mask?
A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.
I’ve heard about a treatment called dexamethasone. Does it work?
The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.
What is pandemic paid leave?
The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.
Does asymptomatic transmission of Covid-19 happen?
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
What’s the risk of catching coronavirus from a surface?
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
How does blood type influence coronavirus?
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
How can I protect myself while flying?
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
What should I do if I feel sick?
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
“It’s not a great feat for the scale of the crisis,” he said. “My broad view is it’s quite risky to not have done more than he’s done.”
Unlike previous measures like the furlough program, where the government deposited money almost directly in people’s pockets, Wednesday’s announcements were focused on returning to work and encouraging private spending.
The chancellor showed particular concern for young people, who have been hit especially hard by pandemic-related job losses. More than half a million people under 25 are unemployed in Britain, according to official statistics.
“Under-25s are two and a half times as likely to work in a sector that has been closed,” Mr. Sunak said. “We cannot lose this generation.”
He announced a £2 billion fund to pay the wages for six months for 16- to 24-year-olds on state benefits who are offered new jobs. Another £160 million will be spent on training programs, career advice services and other work placements for young people, he said.