Rishi Sunak has warned the UK economy will “get worse before it gets better” as businesses and households endure the latest lockdown measures to try to bring the coronavirus pandemic back under control.
“Even with the significant economic support we’ve provided, over 800,000 people have lost their job since February,” the chancellor told the House of Commons on Monday.
“And while the new national restrictions are necessary to control the spread of the virus, they will have a further significant economic impact.”
Mr Sunak highlighted the government’s £280bn of fiscal stimulus that the government has provided, including supporting 10 million jobs through the furlough scheme and three million with self-employment grants.
He went on: “While the vaccine provides hope, the economy is going to get worse before it gets better.
“Many people are losing their jobs, businesses are struggling, our public finances have been badly damaged and will need repair.
“The road ahead will be tough. Sadly, we have not and will not be able to save every job and every business.”
Responding to Mr Sunak’s economic update, shadow chancellor Anneliese Dodds said the chancellor “was nowhere to be seen” when prime minister Boris Johnson announced the latest lockdown.
She told the Commons: “His sole contribution to a set of announcements that had profound implications for our economy was a 90-second video on Twitter which begged as many questions as it answered.”
She added: “Today the chancellor appears out of ideas, urging us to look towards the sunny uplands but providing nothing new.
“The purpose of an update is to provide us with new information, not to repeat what we already know.”
She continued: “Will we have to wait until the Budget for a recognition of all of these problems and solutions to them?”
Ms Dodds concluded: “The people of Britain understand that they have to make sacrifices.
“They’re doing their bit for the national effort, while the vaccine is rolled out.
“They’re fulfilling their side of the bargain. The chancellor must fulfil his.”
The SNP’s Treasury spokeswoman Alison Thewliss said: “I thank the chancellor for finally gracing us with his presence and for once not redacting his statement, but I suspect that’s perhaps because there’s so little here that’s actually new.”
Conservative Tom Hunt asked Mr Sunak to detail what further support might be provide ahead of the Budget, adding: “I talk specifically about the potential extension of the business rates holiday throughout 2021 and also the support on VAT.”
Mr Sunak said the hospitality sector “deserves our support” given the impact of the restrictions, adding: “I will bear in mind his suggestions about how we can look at providing further support.”
Additional reporting by PA