Hardship and job cuts ahead, Sunak warns
Reports on impact of virus as death toll rises and PM remains in intensive care
CHANCELLOR RISHI Sunak has warned he cannot protect every job, business or charity as it was claimed the cost of covering wages for those not able to work would be far greater than initial forecasts.
The think-tank, the Resolution Foundation, found that the Government’s plan to cover 80 per cent of the salary of furloughed workers could cost up to £40bn in just three months as more companies have decided to take up the scheme than originally expected.
In a separate report, the Institute for Fiscal Studies (IFS) said the health of the nation will face a double blow, first from coronavirus itself and then from the economic disaster expected to follow.
The warnings come as Prime Minister Boris Johnson prepared to spend a fourth night in hospital, a third in intensive care. His condition was said to be “improving” and he was sitting up in bed speaking with staff.
The Department of Health said yesterday a further 938 people had died from the virus. The figure includes deaths that occurred in the past few days and weeks, but have only now been reported by hospitals.
The total number of people who have now died after testing positive for the virus in English hospitals is 6,483, with at least 456 of those in Yorkshire. The UK death toll is 7,097,
Mr Sunak warned yesterday that the economic impact of the coronavirus outbreak would result in real hardship for people.
“This will have a significant impact on our economy – and not in an abstract way,” he said.
“It will have an impact on people’s jobs and their livelihoods. That is why we have taken the
actions we have in order to help mitigate some of that. I believe we are doing the right things. I can’t stand here and say there isn’t going to be hardship ahead because there is.”
He admitted that he could not save every job, business or charity with his emergency measures.
Asked if some are falling through cracks and whether he needs to take urgent action for those not covered by his schemes, he said: “I’ve been very clear and very honest that this will take a significant impact on our economy.
“In spite of what are unprecedented measures in scale and scope, I can’t stand here and say I can save every single job, protect every single business or indeed every single charity. That’s just simply not possible.”
His comments came amid research from the University of Sheffield which found almost 70 per cent of the UK’s smallest businesses expect to lose more than half of their annual turnover due to the coronavirus crisis.
In analysis of new data from the British Chambers of Commerce (BCC), the Resolution Foundation found between £30bn and £40bn could flow from Government coffers as at least a third of workers in the private sector are likely to be sent home.
Although expensive, the social cost of millions going unemployed without the Government guarantee would be “far, far greater”, said Torsten Bell, the chief executive of the Resolution Foundation. Without it, workers face “catastrophic hits to their living standards”.
The IFS’s own research found the economic downturn expected to follow the crisis will have persistent negative health effects.
Heidi Karjalainen, a research economist at IFS, said: “The health impacts of the economic downturn caused by the coronavirus pandemic will be felt long after the social distancing measures come to an end.
“Many of those who are most exposed to the economic shutdown – such as low income families, especially those with young children – are also most vulnerable to long-term effects on both physical and mental health.”
Ms Karjalainen said the Government could protect the most at risk of the negative economic impacts, which would also minimise the effects on their longterm health.