The UK has entered recession after a 20.4 percent contraction between April and June. The UK’s slump is also one of the biggest among advanced economies, according to preliminary estimates. Rishi Sunak warned last month that the recession would represent a difficult time for the country. Despite this, the Chancellor has shown no intent to extend the furlough scheme once more, with the deadline currently set for the end of October.
At the start of August, up to 4.5 million people in Britain remained furloughed, according to the Resolution Foundation.
A total of 9.6 million people have benefited from the scheme since its launch in March, at 1.2 million companies, at a cost of £34.7billion to the exchequer so far.
Taking the decision not to extend would be disastrous, according to Richard Murphy of Tax Research UK.
He argues the scheme should go on for another two years with a few million remaining on it.
He warned that if they don’t do this, Mr Sunak – along with Prime Minister Boris Johnson – could face a severe backlash.
He told Express.co.uk: “The day the unemployed realise their children are impacted by this, the Government will fear that those people start protesting.
“They’ll say ‘you could have kept us in work and our homes, but you didn’t because you prioritised the national debt.’
“Those people could then vote Labour, at every level this threatens the Conservative Government’s survival.
“If they don’t extend the furlough scheme it will be catastrophic, both politically for the Conservatives and economically for the country.
Mr Murphy also claimed that the Chancellor hasn’t always taken the pandemic as seriously as is necessary.
Early on in the pandemic, he accuses Mr Sunak of being complacent.
Mr Murphy continued: “At first, Rishi Sunak completely underestimated what was going to happen, it was a complete disaster, because he hadn’t realised how disastrous coronavirus was going to be.
“But he was back a week later with the furlough scheme, it was smart, quick, some people lost out when they shouldn’t have done.
“But overall it has worked and they did a good job – but now Sunak’s obsession with debt is kicking in again.
“If he opts for austerity and tax hikes, then frankly we are heading for depression rather than a recession.”
Published at Thu, 03 Sep 2020 14:36:00 +0000