Lockdown will hit UK economy again & ‘things will get worse before they get better’, Rishi Sunak warns
RISHI Sunak warned today the third national lockdown will hit the UK economy and “things will get worse before they get better”.
The Chancellor gave Brits a dire assessment of Britain’s economic position, saying “tough decisions will need to be made” to repair the badly damaged public purse.
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Mr Sunak told MPs today: “While the new national restriction are necessary, these will have further significant economic impact
“We should expect the economy to get worse before it gets better.”
It came after Mr Sunak announced last week that firms would be able to access an extra grant of up to £9,000 to get them through the latest round of closures – at a total cost of £4.6billion.
The Chancellor said he had done everything possible to keep people and businesses afloat during the coronavirus crisis.
But he warned 800,000 Brits had still lost their job since last February.
Mr Sunak also hinted at tax rises on the horizon, saying the “public finances have been badly damaged and will need repair”.
“The road ahead will be tough,” he added.
“Now it is time for responsible management for our economy, taking the tough, but right, long-term decisions for our country.”
He vowed that with “the determination, enterprise and resilience” of the British people, the country would recover as an even deeper economic crisis threatens to envelop the nation.
The pound dipped against the dollar and euro this morning after polls suggested Britain’s economic output declined at the end of last year due to rolling lockdowns and the introduction of tougher measures.
The Treasury has already spent more than £200billion this year alone trying to support businesses and stop more people from losing their jobs.
Under the national measures introduced by Boris Johnson last Monday, all non-essential shops have to close, and cafes and restaurants can do take-away only.
Brits must work from home if they can and not go into the office due to the spiralling number of cases.
The Sun revealed last week that the Treasury is finally considering a scheme to bailout up to a million small business owners excluded from previous Covid support.
A team of Treasury officials are scrutinising a proposal that would see the Government pay up to 80 per cent of lost trading profits of sole directors of limited companies.
Britain’s economy has had to shut down again over Covid[/caption]
The Directors Income Support Scheme would pay grants of up to £7,500 to cover three months of lost trading profits and would be limited to those who earn less than £50,000 a year.
Initial estimates have put the cost of the scheme between £2-3 billion depending on take-up.
A Government source insisted there was still no guarantee that the scheme will be introduced as there are still several loopholes to close down to avoid fraud, waste and legal challenges.
Many self-employed workers such as plumbers, engineers, freelance musicians, workers in the wedding and events sectors and entrepreneurs have been shut out of Government Covid grants because they pay themselves in dividends.
It has made this group of solo-workers ineligible for the Government’s Self-Employed Income Support Scheme (SEISS) because the Treasury couldn’t work out how to pay for lost dividends at the same time as stopping support going to rich investors.
The Chancellor has so far resisted calls to introduce a separate bailout scheme for hundreds of thousands of small business owners pay themselves in dividends because he doesn’t want any of the taxpayer-funded grants going to rich people who invest in dividends.
And the Treasury had previously failed to find a legal way of excluding investors from a bailout scheme for director-owners.
— Leader of the House of Commons (@CommonsLeader) January 11, 2021
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