Business Day

No relief for British economy as minister issues dire warning

• Newspaper reports Rishi Sunak as telling his colleagues that GDP may shrink by as much as 30% in this quarter

- Estelle Shirbon London

Britain’s finance minister, Rishi Sunak, has told colleagues the economy could shrink by up to 30% this quarter because of the coronaviru­s lockdown, a newspaper reported, as the soaring death toll gave little hope that restrictio­ns would soon be lifted.

The number of Covid-19 deaths in hospitals across the UK has passed 10,000 and a senior scientific adviser to the government has said the country risks becoming the worst-hit in Europe. Prime Minister Boris Johnson left hospital on Sunday after spending a week there, including three nights in intensive care, being treated for the disease. He is now convalesci­ng at Chequers, his official country residence.

INSUFFICIE­NT TESTING

The government has had to defend its response to the outbreak, with complaints of insufficie­nt testing, a dearth of protective kit for medics, and questions about whether Johnson was too slow to impose a lockdown.

His spokespers­on said on Monday that close to 18,000 tests had been conducted in the 24 hours to 8am on Sunday and good progress was being made towards the target of 100,000 daily tests by the end of April.

There is no clarity on when Johnson will return to work. “Any decisions which he makes in relation to when he returns to government work will be following the advice of his medical team,” his spokespers­on told reporters in a daily briefing.

Over the long Easter weekend, Johnson spoke to foreign secretary Dominic Raab, who is deputising for him, the spokespers­on said.

In a deeply personal video message posted on Twitter shortly after he was discharged on Sunday from St Thomas’ Hospital, Johnson said “things could have gone either way” for him. He thanked the public for adhering to strict social distancing measures, saying their efforts were worth it and had created a “human shield” around the state-run health service by reducing the spread of the virus.

While there was widespread sympathy for Johnson across the political spectrum over his illness, the upbeat tone of his message could not disguise the gravity of the choices now facing his government while he is away from his desk.

With Raab at the helm but lacking the full authority of a prime minister, the government faces excruciati­ng trade-offs between the needs of the health service and of the economy, with national morale at stake.

The Times newspaper reported that Sunak had discussed with colleagues the possibilit­y that GDP would shrink by 25%-30% between April and June.

Johnson’s spokespers­on said people should wait for official economic data to be published rather than speculate. Sunak “has been very clear about the significan­t impact which the coronaviru­s pandemic is having on the economy”, he said.

Citing unnamed ministers, the Times reported that Sunak and others were pushing for social distancing measures to be relaxed for the sake of the economy, while still others were resisting this because of the risk of worsening the coronaviru­s outbreak.

A government review of the current measures, which have been in place since March 23, is scheduled to take place by Thursday.

The government is widely expected to extend the restrictio­ns.

The treasury said in a statement that its emergency funding for public services now totals £14bn, up from £5bn announced in Sunak’s annual budget before the lockdown was imposed. That includes new and previously announced funding for the National Health Service and for local authoritie­s, which provide social care for elderly people.

Working in tandem, the treasury and the Bank of England have announced a package of measures to stop the economy and labour market from collapsing, but there have been complaints that delivery is slow and patchy.

Business minister Alok Sharma has said that 4,200 small and medium-sized businesses had received rescue loans as part of the government’s coronaviru­s business interrupti­on loan scheme. When it was put to him during a BBC interview on Sunday that the number represente­d only 1.4% of the 300,000 firms that had made inquiries, he did not dispute those figures.

Johnson’s spokespers­on said the scheme had been changed to make it quicker and easier for businesses to secure loans. “We are making good progress, with the latest figures showing an eightfold increase from last week,” he said.

Announced nearly three weeks ago by Sunak, the scheme is designed to help small and medium-sized firms with loans of up to £5m each.

Meanwhile, the daily briefing from the semi-autonomous Scottish government in Edinburgh provided a grim reminder of the outbreak’s human toll. Scotland’s interim chief medical officer asked the public not to delay relatives’ funerals in the hope of organising them once social distancing measures had been lifted, saying that would risk overwhelmi­ng mortuaries and funeral homes.

 ?? /AFP ?? Transforma­tion: Constructi­on work continues inside the Scottish Events Campus in Glasgow on April 7 as it is transforme­d into the NHS Louisa Jordan hospital.
/AFP Transforma­tion: Constructi­on work continues inside the Scottish Events Campus in Glasgow on April 7 as it is transforme­d into the NHS Louisa Jordan hospital.

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