Britain’s battered economy will need a £200 billion shot in the arm if it is to bounce back from the coronavirus crisis, a leading economic think tank has said.
Rishi Sunak has been urged to use tomorrow’s mini-Budget to announce a raft of spending on infrastructure, job schemes, high street support and welfare to steer the UK through the Covid-19 depression.
The Resolution Foundation has called for a £30 billion ‘High Street Voucher’ scheme – worth £500 per adult and £250 per child – to be spent in retail, hospitality and leisure, in addition to a £17bn extension to the furlough scheme.
The foundation, which is headed by the brother of Mr Sunak’s main adviser, also recommended a “trebling down” on Boris Johnson’s levelling up agenda by increasing capital investment by £14bn and a £10bn boost in spend on universal credit.
James Smith, research director at the foundation, said: “The Covid-induced economic crisis is like no other crisis we’ve seen.
“The measures the Chancellor announces in his mini-Budget tomorrow need to be big enough to reflect the size of the crisis we face, targeted at the sectors that need the most support, and flexible enough to cope with the uncertainties that lie ahead.
“A £200bn fiscal stimulus should therefore focus on protecting jobs and supporting spending in hard-hit sectors of the economy, and reflect the fact that low-income households have found it far hardest to cope.”
Mr Sunak’s spending plans, which will be announced tomorrow, are expected to include a temporary VAT cut for pubs, restaurants and cafés to help to protect 2.4 million jobs in the hospitality sector.
A further £100 million will be invested in traineeships for young people, to help them find work.
On Sunday night the government announced a £1.87 billion package of loans and grants for the arts sector to save theatres, museums, galleries and music venues from closure – of that £97 million in Barnett consequentials will be paid to Holyrood.
And last night a £3 billion package to support tens of thousands of green jobs was announced.
Under the green plan, £1 billion will be spent making public buildings, including schools and hospitals, across the UK greener.
We need an urgent financial package to deliver vital cash to those falling through the cracks and an extension of the furlough scheme to make it truly fit for purpose.”
Alison Thewliss
Ahead of Mr Sunak’s statement, SNP shadow chancellor Alison Thewliss has demanded that the UK Government announce more support for hard-pressed workers.
She said: “Across the UK, millions of people are crying out for urgent financial support from this Tory government.
“While forgotten freelancers have yet to receive a penny from the Chancellor, millions more face uncertainty with the furlough scheme due to taper off and end far too soon.
“We need an urgent financial package to deliver vital cash to those falling through the cracks and an extension of the furlough scheme to make it truly fit for purpose.”
She added: “With the stroke of his pen, Rishi Sunak can end this uncertainty for millions across the UK – the time to act is now before even more people find themselves in a dangerous cycle of spiralling debt.”
