Now that the Prime Minister’s timeline for reopening the UK economy has been published, all eyes will be turning to next week’s Budget.
Chancellor Rishi Sunak faces the unenviable task of tracking the PM’s lockdown exit plan while not creating a cliff-edge when it comes to withdrawing support schemes like furlough.
The PM told MPs in the Commons on Monday that he will not ‘pull the rug out’ from under businesses and the economy, and would continue to do ‘whatever it takes’ to protect jobs and livelihoods across the UK.
That means we can expect to see support measures being extended beyond the June 21 target to fully reopen the country, with some suggestions that furlough and other measures continue into the summer as businesses get back on their feet. This will be especially important to the hospitality industry which will be losing its second Easter in a row.
The Bank of England has predicted that the economy could bounce back like a ‘coiled spring’ once restrictions are lifted, buoyed by an estimated £125 billion that households have built up in savings in the last year.
But this is cold comfort to people who have lost their jobs or seen incomes decimated. The UK’s jobless rate increased to 5.1% in the three months to December, the highest for almost five years.
The Office of National Statistics said 726,000 fewer people were in payrolled employment than before the start of the pandemic, with the under-25s bearing the brunt and accounting for almost 60% of that fall. And with six million people still on furlough, unemployment could rise sharply to 7.8% later this year, according to some forecasts.
No-one envies the Chancellor’s position, trying to balance the short-termism of the Covid-19 response, while plotting a longer-term path to economic recovery.
But it’s time he got serious about creating new jobs, not just protecting existing ones. We want to see an investment-led recovery where the Government’s pledge to ‘level up’ the UK’s uneven economy comes through actions and not words.
Next week’s Budget is an opportunity to do just that. We want to see a commitment to a multi-year regional settlement through the Government’s new Shared Prosperity Fund, allied to devolved powers so we can shape our own economic recovery.
We know what needs to be done in Cornwall and the Isles of Scilly to create opportunity by growing new areas of our economy and tackling disadvantaged communities.
We have decades of experience of local decision making and how it can work effectively in a rural area.
We have businesses ready to invest and a pipeline of projects valued at hundreds of millions of pounds. But they want the certainty that a longer term settlement would bring, instead of having to bid for ad hoc lumps of money.
We have our roadmap to recovery. Now we need Government to commit.