RISHI Sunak has warned of “difficult times ahead” and job losses after unveiling his mini budget to kickstart the economy.
The Chancellor today admitted he would be unable to save every job, and that he was “anxious” about the future.
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Asked about a recession, Mr Sunak explained the Government had done what it could.
He told Sky News: “There are going to be difficult times ahead and as you’ve acknowledged there are forecasts of people predicting significant levels of unemployment.
“That weighs very heavily on me which is why I wanted to act yesterday, with a comprehensive plan to provide opportunities for people, protect as many existing jobs as we have but also provide people with the opportunities and the skills they need to get new jobs, to look for new opportunities.
“I am absolutely anxious about the state of the economy.
“We are, as I’ve said before, entering into a very significant recession. We know that that is happening.”
He added: “We can’t sustainably live like this, of course we can’t, and over the medium term we can and we will return our public finances to a sustainable position.”
It comes as top finance chiefs warned higher taxes will come in from 2022.
Paul Johnson, Director of the Institute for Fiscal Studies think tank, predicted that tax rises would come “eventually” to pay back all the billions the Chancellor has borrowed to help Britain through the pandemic.
Mr Sunak also warned of significant job losses, despite the introduction of the furlough scheme.
He told BBC Breakfast: “If you’re asking me if I can protect every single job of course the answer is no. Is unemployment going to rise? Are people going to lose their jobs? Yes.
“The scale of this is significant. We are entering one of the most severe recessions this country has ever seen. That is of course going to have a significant impact on unemployment and job losses.
“It would be absolutely foolhardy for me to sit here and give you precise numbers or forecasts or what is or isn’t a measure of acceptability when we are living in a time of unprecedented economic uncertainty.”
Mr Sunak insisted it was right to back the economy now, and claimed the £1000 bonus for businesses who bring back staff will make a “big difference”.
The Chancellor also begged Britons to “relearn” the habits of eating out and shopping, and claimed doing so will help speed up the recovery.
Yesterday the Chancellor also announced a stamp duty holiday to revive the housing market.
Think tank the Resolution Foundation warned the move would only help buyers in wealthy areas.
They said: “Someone buying the average home in the North East will see no gain, while a buyer of an average home in London will save over £14,000.
“The average first-time buyer already pays no stamp duty in all regions and nations except London, and therefore won’t benefit.”
The Chancellor also announced restaurant and pub bills will be slashed in half when you eat out help the economy bounce back from the coronavirus lockdown.
However, HMRC’s permanent secretary, Jim Harra warned the chancellor it was impossible to judge whether his meal discount or job rentetion scheme represent good value for taxpayers.
He revealed his sweeping plans in an emergency mini budget – known as a summer economic update – to MPs in the House of Commons yesterday lunchtime.
The move comes just four months after he gave his Spring Budget in March – filled with a £30billion economic package to try to protect the country from the economic impact of coronavirus.
Since then he’s splurged billions on the NHS, the huge furlough scheme, and several other big projects to keep the economic engine moving.
Yesterday’s ‘mini budget’ comes just after the prime minister’s “New Deal” speech – promising to plough more cash into building major infrastructure projects to create jobs and growth.
The Government wants to focus on young people, who have been particularly hard hit by the pandemic and are more likely to have lost or will lose their jobs.