U.K.’s Sunak Plans £500 One-Time Benefit Payment: Times

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Jan 17 2021, 6:56 AMJan 17 2021, 7:13 AMJanuary 17 2021, 6:56 AMJanuary 17 2021, 7:13 AM

(Bloomberg) -- U.K. Chancellor of the Exchequer Rishi Sunak is planning to give a one-time benefit payment of 500 pounds ($680) to nearly six million people to help ease the economic fallout from a third coronavirus lockdown, the Times of London reported on Saturday.

The plans come ahead of an April deadline when last March’s 20 pound-per-week uplift to universal credit payments is set to end. The Times cited a Friday meeting between Sunak, Prime Minister Boris Johnson and Work and Pensions Secretary Therese Coffey aimed at finding alternatives to last year’s payment hike.

Separately, the paper reported on Sunday that Sunak plans to start raising taxes in March to plug the budget deficit. One factor is that the virus vaccination program stays on track, the Sunday Times reported, citing senior government sources it didn’t identify.

A bloc of Conservative lawmakers have called on Sunak to extend tax breaks and the increase in benefits payments in a letter to the chancellor on Thursday, putting pressure on Sunak. He is mulling an extension of stamp duty cuts and more benefits, the Times said Sunday.

A wage support program, which was extended last year, will see payouts to furloughed employees stop at the end of March.

As workers and businesses grapple with England’s latest lockdown restrictions, which began earlier this month and could last until the end of March, Sunak has cautioned that the current level of spending isn’t sustainable in the longer term.

While the U.K. economy shrank less than expected during November’s lockdown, reducing the risk of a double-dip recession, this month could see a bigger hit as non-essential shops and schools have shut in an effort to curb the spread of the coronavirus and ease the pressure on the state health-care system.