British Chancellor of the Exchequer Rishi Sunak attends virtual press conference in London
London:
Britain to prioritize saving jobs over tax hikes as COVID-19 pandemic hits the economy, though record borrowing and $ 2.6 trillion in debt fail cannot be maintained forever, Finance Minister Rishi Sunak said on Tuesday.
Prime Minister Boris Johnson is grappling with one of Britain’s worst economic fallout in three centuries and Sunak has repeatedly warned that relying on such large borrowing in bond markets could trigger a funding crunch long-term.
But as businesses, from airlines to pubs, lose hundreds of thousands of jobs and government spending skyrockets, Sunak is looking for ways to increase state revenues.
“The priority right now is on jobs,” Sunak told Sky News, when asked about possible tax increases. “My overriding goal right now is to try to protect and support as many jobs as possible.”
Asked about tax increases in a flurry of interviews, Sunak has repeatedly pointed out that jobs are the short-term goal, but made it clear he should tackle the mountain of UK debt medium term.
“Obviously this cannot go on forever. This level of borrowing, which will be near record highs this year, is not sustainable in the long term,” he told BBC TV.
“Once we get through that, I think people should rightly expect us to make sure we have a solid set of public finances.”
Sunak’s emergency spending measures, including subsidies to slow rising unemployment, will cost around £ 200 billion this year and have already pushed public debt to over £ 2 trillion ($ 2.60 trillion). ), or 100% of gross domestic product.
Borrow Crunch
Sunak warned on Monday of the damage higher interest rates could do given the sheer size of Britain’s debt.
The government’s flagship salary support program will expire at the end of this month and be replaced by a less generous subsidy program.
The UK’s Office of Fiscal Responsibility predicted in July that unemployment would peak at 11.9% in the last quarter of 2020 under its central economic scenario, equivalent to just over 4 million people, before settling in average to 3.5 million in 2021.
In a more negative scenario, unemployment would average 4 million until 2021.
While Sunak has refused to rule out tax increases, experts say he is unlikely to focus on reducing the budget deficit quickly, given the alarming state of the economy.
The Institute for Fiscal Studies has said time to pay for the increased spending triggered by the pandemic is unlikely in 2021.
Sunak also said on Tuesday that the government would stick to its so-called ‘triple lockdown’ to set state pension increases that could jump next year due to math distortions caused by the coronavirus crisis. .
Asked by LBC Radio about whether the triple lock was secure, Sunak said: “Yes, our overt commitments are there and that is really the legislative position. We care a lot about retirees and making sure they have the security and that is our policy. “
(Except for the title, this story was not edited by GalacticGaming staff and is posted from a syndicated feed.)
