July 20, 2024

The Domestikated Life

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Coronavirus: Borrowing records smashed as Sunak prepares to splash more cash | Business News

The Treasury borrowed the third-highest sum for any month on record in August, according to official figures – as the chancellor prepares to unleash his latest support for the coronavirus-hit economy.

The Office for National Statistics (ONS) reported that public sector net borrowing, excluding the effects of bank bailouts, was estimated to have hit £35.9bn last month – the highest sum ever recorded for an August.

That was £30.5bn more than in the same month last year and explained by the government’s efforts to fund its COVID-19 medicine for jobs and efforts to tackle the disease.

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The ONS said it took borrowing in the first five months of the financial year to £173.7bn – another record for the period since records began in 1993.

It meant that the UK’s national debt, which topped £2trn in July, now stood at a new peak of £2.024trn – up £249.5bn on August 2019.

The sobering figures were released just a day after Rishi Sunak revealed a new package of measures to support jobs and businesses through the winter months as virus restrictions are tightened UK-wide to control infection rates.

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The headline was the Jobs Support Scheme (JSS) that will replace the current furlough support when it fully expires at the end of next month.

It will help those in “viable” jobs who are back at work, but only provide a top-up in wage support to cover reduced hours.

Separate ONS figures released on Thursday estimated that 12% of the workforce were on partial leave or remained on full furlough earlier this month.

Ed Conway jobs support scheme screen 24/9/20

Jobs scheme quite small compared to other COVID-19 measures

The terms of the JSS prompted warnings in some quarters that those still on furlough were being abandoned amid earlier Bank of England projections of three million unemployed by Christmas.

There was growing evidence of disquiet in the government’s own ranks.

Tory MP John Redwood took to Twitter to register his own protest.

He wrote: “The Chancellor needs to improve his scheme to save jobs. Businesses that are closed by law to stop the virus need compensation. Many of their jobs will be needed when the law is relaxed.”

Mr Sunak has repeatedly warned that not every business or job can be saved as he moves to provide more incentives to keep people in work and the economic recovery on track despite the deepened virus restrictions.

He has argued it would be “fundamentally wrong” for people to be kept in jobs that can only exist due to state funding but has declined to say which sectors are likely to be lost.