Rishi Sunak has set out his ‘three Rs’ plan for a post-lockdown Britain: ‘Relight’ the economy, ‘Return’ to work, and ‘Re-open’ schools.
The Chancellor’s new programme is intended to save Britain from economic disaster amid the ‘worst ever’ recession brought about during the coronavirus crisis.
Mr Sunak said that Britons should ‘safely’ return to work, along with shops and restaurants, adding that now is the time for ‘everyone to rally round and really fire up the economy together’.
He told the Sun: ‘Whether it’s going back to school or work in the office again, going to your local restaurant or pub for a meal or visiting your local shops for a bit of retail therapy, if we all play our part we can relight our economic firepower together.
‘I know that businesses around the country have taken extraordinary steps to make sure everyone can do so confidently and safely.’
Mr Sunak said Britain had seen adversity before and emerged stronger, and this time would be ‘no different’.
‘As people get back to going shopping or going out for a meal or indeed getting back to their office they will see that it’s a new normal . . . a safe normal,’ he said, adding that Britons should not be ‘too nervous’ about Covid.
Rishi Sunak said that Britons should ‘safely’ return to work, along with shops and restaurants, adding that now is the time for ‘everyone to rally round and really fire up the economy together’
The Office for National Statistics said the UK had been harder hit in the first half of the year than any other G7 economy – with only Spain enduring a worse downturn
The Institute of Economic Affairs claims that lifting the lockdown and reopening of schools will be important steps in rebuilding the economy (pictured: A pupil at a school in Glasgow on Wednesday)
The Institute of Economic Affairs claims that lifting the lockdown and reopening of schools will be important steps in rebuilding the economy.
The Chancellor’s plan comes amid news that Britain has suffered the deepest recession among the world’s top economies this year, shrinking by a fifth in the second quarter alone when much of the economy was mothballed as part of efforts to contain the coronavirus pandemic.
The 20.4% quarterly drop is the worst since records began in 1955, the Office for National Statistics said, and means the country is officially in recession following two consecutive quarters of a declining economy.
Rishi Sunak refuses to rule out delaying Budget if coronavirus outbreak spikes again
Rishi Sunak today refused to rule out delaying his crucial Budget this Autumn if there is a second wave of coronavirus.
The Chancellor is believed to be ready to shelve the financial package – billed as the defining moment of the government – if the situation escalates again.
In an interview this morning, Mr Sunak did not dismiss the idea of rescheduling, but insisted the Treasury was ‘very much working towards the goal’ of having the Budget as expected.
The contingency planning underlines the anxiety in government about the recent rise in cases across Europe.
A delay would likely be until the spring of next year, and Mr Sunak could instead choose to deliver a ‘mini-spending review’ before Christmas to update departmental budgets.
One ally of Mr Sunak told the Financial Times: ‘While it’s very likely to happen, there is an element of uncertainty.
‘If we have a series of local lockdowns and a second spike, it’s not clear that would be the right time for a Budget.’
Speaking to Sky News today, the Chancellor said: ‘We’ve said that we plan to have a fiscal event in the autumn and we’re very much working towards that goal.’
While many of the lockdown restrictions have since been eased, the country faces a tough time in coming months, with unemployment likely to spike as the government phases out a support program that has effectively kept nearly 10 million workers on company payrolls.
Britain’s recession is deeper than those recorded by comparable economies in Europe, notably Germany, France and Italy, or by the United States. Canada and Japan, the remaining members of the Group of Seven leading industrial nations, have yet to publish their second-quarter numbers.
Kallum Pickering, senior economist at Berenberg Bank, said the main reason why the British economy has fared worse is that the lockdown was introduced at ‘a later stage’ in the virus outbreak, particularly when compared with others in Europe.
By the time Prime Minister Boris Johnson introduced the lockdown on March 23, the UK had ‘a bigger first wave’ than could have otherwise been the case, meaning restrictions had to go on for longer.
Shops in Germany, for example, reopened on May 6 compared with June 15 in England.
The UK has the highest official coronavirus death toll in Europe with 46,611 deaths. The actual toll is believed to be higher as the official dataset only incorporates those who have tested positive for COVID-19.
There is some hope that the economy is healing as lockdown restrictions are eased.
‘The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and house-building continuing to recover,’ said statistician Jonathan Athow.
The British government hopes the economy will be helped by further measures such as the reopening of pubs and restaurants and a recommendation for office workers to return to their workplaces provided they are deemed COVID-safe.
However, Samuel Tombs, senior UK economist at Pantheon Macroeconomics, thinks the British economy will likely ‘lag’ others because of ‘structural disadvantages,’ notably the fact that the economy is so dependent on consumer-facing businesses, where clearly human interactions are more important than in manufacturing or construction.
And it’s almost inevitable that unemployment will sky-rocket, potentially more than doubling to the 3 million mark last seen in the 1980s.
‘Whether it’s going back to school or work in the office again, going to your local restaurant or pub for a meal or visiting your local shops for a bit of retail therapy, if we all play our part we can relight our economic firepower together,’ the Chancellor said (pictured: Pupils at a Glasgow school, August 12)
The UK has the highest official coronavirus death toll in Europe with 46,611 deaths. The actual toll is believed to be higher as the official dataset only incorporates those who have tested positive for COVID-19
‘I’ve said before that hard times were ahead, and today’s figures confirm that hard times are here,’ said Treasury chief Rishi Sunak. ‘Hundreds of thousands of people have already lost their jobs, and sadly in the coming months many more will.’
So far, the British government has kept a lid on the official unemployment numbers through its Job Retention Scheme, which has given hard-pressed firms the opportunity to retain workers rather than fire them.
Under the scheme, it has been paying a large chunk of the salaries of workers retained. Some 1.2 million employers have taken advantage of the program to furlough 9.6 million people at a cost to the government of 33.8 billion pounds ($44 billion).
Sunak is ending the program in October but insists ‘nobody will be left without hope or opportunity.’
Many, including unions and opposition lawmakers, are urging him to extend the program to sectors still suffering from restrictions.
‘The best way to get our economy back on its feet is to keep people in work,’ said Frances O’Grady, general secretary at the umbrella Trades Union Congress.
The British economy faces other headwinds besides the pandemic, notably uncertainty over its future trading relationship with the European Union following the U.K.’s departure from the bloc in January.
The UK is currently in a transition period whereby it remains part of the EU’s tariff-free arrangements until the end of the year.
The future economic relationship has yet to be agreed upon, meaning tariffs could be imposed on traded goods between the two sides come the start of next year – a development that most economists think would further hobble an economy struggling to recover from the pandemic.