Boris Johnson insisted he does not have a ‘magic wand’ to save jobs today as he admitted that a wave of redundancies is looming.
The PM said ‘no-one should underestimate the challenges’ the UK faces after the government’s watchdog warned four million people could be on the dole queue by next year.
A dire assessment from the Office for Budget Responsibility yesterday also suggested public debt will rise by around £700billion over the next five years as a result of the coronavirus crisis.
Pressed by Sir Keir Starmer at PMQs over what he would do to help prop up firms struggling to survive, Mr Johnson stressed the huge support being provided by the state.
But he said: ‘We cannot, I’m afraid, simply with a magic wand ensure that every single job that was being done before the crisis is retained after the crisis.’
Sir Keir also demanded to know what ministers were doing to prepare for a second spike of coronavirus in the Autumn.
The premier shot back: ‘Not only are we getting on with implementing the preparations for a potential new spike, but he will know that the Government is engaged in record investments in the NHS.’
Boris Johnson (left) insisted he does not have a ‘magic wand’ to save jobs as he clashed with Sir Keir Starmer (right) at PMQs today
The OBR’s downside scenario sees unemployment rising to more than four million next year – with a rate higher than seen in the 1980s
Public debt will soar as the UK reels from the coronavirus crisis, according to the watchdog’s central scenario today. By 2023-4 the liabilities will be around £660billion higher than forecast in March before the chaos hit – and that does not include an extra £50billion from the mini-Budget
The clashes came after the OBR warned tax rises and spending cuts – potentially equivalent to as much as 12p on the basic rate of income tax – are inevitable as it poured cold water on hopes of a ‘V-shaped’ bounceback from coronavirus.
It said GDP will fall by up to 14 per cent this year, the worst recession in 300 years, with national debt bigger than the whole economy.
Underlining the scale of the hit, government liabilities will be £710billion more than previously expected by 2023-4. That is equivalent to nearly £11,000 for every man, woman and child in the UK.
Output might not return to last year’s level until the end of 2024, according to the estimates. Accounting for inflation, the country will still be 6 per cent poorer in 2025 in the gloomiest outcome.
Meanwhile, unemployment could peak at 13 per cent in the first quarter of 2021 – which would mean more than four million people on the dole queue.
That would be significantly worse than the 11.9 per cent jobless rate from 1984, and the highest since modern records began in the 1970s. The ‘central’ forecast is that 15 per cent of the 9.4million furloughed jobs will be lost.
At PMQs, Sir Keir said the Government’s decision not to provide sector-specific support to those most at risk ‘could end up costing thousands of jobs’.
Sir Keir said: ‘Over the last few months we’ve supported many of the economic measures announced by the Government but the decision last week not to provide sector specific support to those most at risk could end up costing thousands of jobs.
‘One of the sectors, aviation, has already seen huge redundancies. BA have announced 12,000 redundancies, Virgin, 3,000, easyJet 1,900.
‘If the Government’s priority really is to protect jobs, why did the Chancellor not bring forward sector specific deals that could have done precisely that?’
Pressed by Sir Keir Starmer at PMQs over what he would do to help prop up firms struggling to survive, Mr Johnson stressed the huge support being provided by the state
Mr Johnson replied: ‘No one should underestimate the scale of the challenge that this country faces and that is why the Chancellor has brought forward a range of measures which by the way he supported last week.’
But he added: ‘Let’s be absolutely clear, British Airways and many other companies are in severe difficulties at the moment and we cannot, I’m afraid, simply with a magic wand ensure that every single job that was being done before the crisis is retained after the crisis.
‘What we can do and what we are doing is encouraging companies to keep their workers on with the Job Retention Scheme, with the Job Retention Bonus and with a massive programme in investing in this country, a £600million investment programme in this country to build, build, build and create jobs, jobs, jobs.’