World News – GB – Rishi Sunak could do worse than copy Germany

The system whereby Berlin supplements the wages of those who work part-time has been proven to be effective

Everything was so different for Rishi Sunak three weeks ago After a bleak start to spring in which the economy was sacrificed for health reasons, there were signs the worst could be over

The number of Covid-19 cases had dropped sharply, businesses were returning to something like normal, and the public was eager to take advantage of the Chancellor’s restoration program to help

There has been talk of a V-shaped recovery and speculation that Sunak may use his fall budget to announce tax hikes on the better-off to start the job of fixing public finances

Many analysts have warned that August will be as good as it has been for the economy and it looks like the Chancellor now agrees with them The fall budget plans have been scrapped: instead, there will be a new package aimed at preventing stricter Covid-19 restrictions from causing unemployment to spike

When Sunak tells MPs what’s in his winter economic plan, it will be his third mini-budget of the year First, there was the announcement in March that the government would pay 80% of employees’ wages in vacations Then, in the summer, there were temporary cuts in stamp duty and VAT as well as incentives to eat out. The Chancellor must now announce what he intends to do to bring the economy to the next level. over the next six months

In reality, the Chancellor will always have to do more to support the economy even if this week’s restrictions were not announced

Throughout the pandemic crisis, the UK has followed the rest of Western Europe with a lag of several weeks: a little later to go into lockdown, a little later to see the ‘activity collapsing, a little later to start the recovery phase and now a little later to see a second wave stop the pick-up

Other European countries – Germany and France, for example – have already announced that they are keeping employment assistance programs in place well beyond the October deadline for the liquidation of the leave and Sunak was under pressure from business groups and unions to do something similar

In July’s mini-budget, the Chancellor offered a job retention bonus of £ 1,000 for every worker brought back from leave and kept permanently in a job until next January This system was less generous than the wage subsidy scheme it replaced and turned out to be an interim solution

As the end of the Brexit transition period quickly approaches and trade talks go nowhere, the Treasury is sensitive to the suggestion that Sunak might want to copy the German Kurzarbeit program under which Berlin is paying a complement to those discovered working time

Yet with the hospitality industry warning that 675,000 jobs could be lost by February, the Chancellor has only a limited range of options He certainly looked at how Europe’s biggest economy does it, and the reason is simple There is evidence that Kurzarbeit works

Rishi Sunak