Rishi Sunak insists ‘our plan is the right plan’ after dire warning for economy
The Office for Budget Responsibility (OBR) predicted a 35% fall in GDP as a result of the coronavirus crisis.
Chancellor Rishi Sunak has insisted the government was right in forcing all non-essential businesses to remain shut after the Office for Budget Responsibility (OBR) predicted a 35% fall in GDP as a result of the coronavirus crisis.
Speaking at the daily Downing Street press briefing, the finance minister admitted tough times were ahead but said he was confident the UK’s economy would ‘bounce back quickly’ when lockdown restrictions are lifted.
He said dire predictions for the UK’s economy post-coronavirus would have been worse had the government not borrowed high amounts to support people and businesses though the pandemic.
‘The OBR have been clear that if we have not taken the actions we have the situation would be much worse, in other words, our plan is the right plan’ he said.
Experts at the independent group predict a 35% fall in GDP if lockdown remains in place for a period of three months, followed by three months of partially lifted restrictions.
However, they estimate the economy will ‘quickly bounce back’ and said the government’s colossal coronavirus job retention scheme would ‘cushion the blow’.
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The OBR report also predicted that the UK will see a rise in unemployment to 10% of the working population, which is around 2,000,000 people.
Mr Sunak suggested the grim forecast was no excuse to lift social distancing measures early, saying the ‘single most important thing’ that could be done for the health of the economy was to ‘protect the health of our people’.
‘It’s not a case of choosing between economy and public health’ he said.
‘At a time when we are seeing hundreds dying every day from this terrible disease, our absolute priority must be to focus all our resources in a collective national effort to beat this virus’.
The chancellor insisted he would not stand by and let the economy continue to suffer when the crisis passess.
He said the government was still committed to levelling up the country and investing in infrastructure – key pledges made at the general election.
But when asked about what measures could be introduced to support young people, who will be disproportionally hit by the economic fall-out, he said he could not ‘write future budgets today’.
He also said he could not ‘write future tax policy’ when asked how the government would find money to make up the deficit coronavirus has created.
He said the best way out of the crisis would be to ‘grow the economy’ and insisted things would not be made worse by a no-deal Brexit.
He said the government is committed to getting a trade deal with the EU and that chief negotiators on both sides, Michel Barnier and David Frost, have discussed how the talks can continue.
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