- Sunak’s plan offers only half the stimulus needed to put UK
on best pathway to jobs, growth and restored public services
The IPPR think tank has responded the chancellor’s budget
statement by welcoming extended support schemes for jobs and
businesses but challenging the limited size and scope of the
stimulus, and over-optimistic expectations for the UK recovery.
Carys Roberts, IPPR Executive Director, said:
“The chancellor is gambling on a highly optimistic scenario from
the OBR, which presumes that the pandemic has done so little
permanent damage to the economy that it can simply bounce back.
“This rosy view ignores the huge underlying problems we face - 40
per cent of households have lost savings and won’t return to
spending as before. Some 600,000 firms don’t have enough cash to
survive the next three months, and are already loaded up with
debt.
“All in all, the scenario used by the chancellor amounts to
betting on a ‘trickle down’ recovery led by high earners and big
businesses. This would be a huge mistake.
“He has delivered only around half the £190 billion stimulus we
think is needed to ensure the fairest and strongest recovery
possible – equivalent to 8.6 per cent of the UK economy, and
close to the 8.9 per cent package planned by the US president. He
should instead be boosting it like Biden.
“We welcome the extensions of job and business support schemes
which we have been calling for, and which serve as planks to
prevent economic hardship. But there was a striking lack of new
support for public services, little public investment and no
lasting boost to welfare for those hit hardest by the crisis.
“The result is the risk of a lopsided recovery, where higher
earners and big businesses bounce back quickly, but low earners
and small businesses will feel the dire consequences of the
pandemic for years to come.”