Government economists have laid out the options as Rishi Sunak prepares to unveil financial measures to help the UK across all major sectors. A former adviser to George Osborne has indicated the government will need to splash out as much as £450billion. The Government’s own fiscal watchdog has also warned huge sums will have to…
Government economists have laid out the options as Rishi Sunak prepares to unveil financial measures to help the UK across all major sectors. A former adviser to George Osborne has indicated the government will need to splash out as much as £450billion. The Government’s own fiscal watchdog has also warned huge sums will have to be borrowed to keep UK plc afloat.
Providing evidence to MPs in Westminster this morning, they warned the UK’s economy could shrink by as much as five percent and called for a “wartime” level of response.
Mr Sunak is expected to unveil a plan to provide substantial help to a number of under-pressure sectors, including pubs, theatres, clubs and cinemas in order to cope with the coronavirus outbreak.
Several leading airlines are also warning they will need a multi-billion bailout to stop international travel grinding to a complete halt.
Office for Responsibility (OBR) boss Robert Chote said: “This is not the time to be squeamish about one-off additions to public sector debt.
The Government could scrap utility bills and council tax (Image: Getty)
Chancellor Rishi Sunak is set to unveil the measures soon (Image: Getty)
“It’s more like a wartime situation – that this is money well spent.”
OBR committee member Charles Bean, who also is a former Deputy Governor at the Bank of England, urged the Government to cover the full impact of the economic hit.
He said: “You could say to businesses, what was your revenue last over the last year, we will fill any shortfall last year.
Fellow committee member Andy King also suggested the prospect of “paying people’s utility bills, paying their council tax bills”.
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Mr Johnson could oversee the plans by the Treasury (Image: Getty)
New medical advice about visiting certain businesses was yesterday issued by Professor Chris Whitty (Image: Getty)
Mr Chote added: “It might be logistically easier to compensate people who would be taking money from households than getting it to them directly.
“The priority is not to worry about dotting the Is and crossing the Ts of fiscal rules but to do what is necessary for the economy and the public.”
The OBR warned there would “inevitably be some scarring” on the UK economy, adding a number of companies could go out of business as the coronavirus situation worsens.
The Government’s plan to fight back against coronavirus (Image: EXPRESS)
Mr Chote also told MPs: “The more serious this is, the more blunderbuss you have to be in the approach.”
The panel highlighted the issue of rising debt due to the financial crisis and the credit crunch a decade ago, which still continues to affect the economy to this day.
This is a similar situation, they said, except attributable to a health crisis rather than one of a financial nature.
The Coronavirus crisis has hit businesses hard (Image: Getty)
Other countries have taken a hard line stance with the economy in the midst of the coronavirus pandemic.
Last night, French president Emmanuel Macron declared “war” on what was described as an “invisible enemy”, by announcing a cash injection of £300 billion in the form of a fund for struggling businesses.
He promised no French business would go under as a result of the crisis.
Many are calling upon the Prime Minister and the Chancellor to go the extra mile to ensure this is also the case in the UK.
Mr Sunak is expected to announce a series of measures which will specifically assist theatres, pubs and bars, as Mr Johnson told the general public to avoid visiting them.