The Chancellor of the Exchequer is preparing to deliver a statement on a fiscal stimulus package in early July. This comes as the Government looks to restart the economy after three months of Coronavirus lockdown, with thousands of businesses having received no income or closed during that time.
This is a crucial moment for the Government as we are faced with what could be the biggest recession in 300 years. On top of needing to reboot the economy and managing the worst public health crisis in living memory, the Government also needs to get itself back on the front foot with the electorate. Prior to the peak of the Coronavirus outbreak, the Conservatives were flying high with approval and had a 23 point lead over Labour in the polls. Three months later, Labour are just 5 points ahead, demonstrating strong public disapproval on how the crisis has been handled. Some polls even have Kier Starmer ahead of the Prime Minister for the first time.
It is undeniable that the Government has provided an unprecedented amount of support for businesses during this time, but this isn’t what is at the forefront of the public’s now as we await this major statement from the Chancellor. Instead, the public are thinking about the Government’s mismanagement of key issues such as schools returning, free school meals, the now abandoned track and trace app, the Dominic Cummings debacle and sadly, the UK having the worst Coronavirus death toll in Europe – which many argue could have been prevented.
In addition, we now have a very strong and what currently appears to be a sensible and pragmatic opposition led by Kier Starmer, something that was strikingly absent under Jeremy Corbyn.
The Chancellor hopes to put at least some of this right. The Government are banking on the re-opening of the hospitality and tourism sector from 4th July to help with the economic recovery and provide a boost to public sentiment. The Chancellor is also likely to delay any possible tax rises until the Autumn to avoid further hardship for people and businesses during this time.
It has also been speculated that the Chancellor could announce a significant package that would go a long way in helping to kick start the economy. To return to the Government’s popular manifesto pledge of levelling up the country, “Build, Build, Build” will be the new mantra with huge infrastructure expenditure set to be announced. Also speculated is the provision of specific support for those sectors that have been hit particularly hard by the pandemic. The Chancellor needs this statement to bring back genuine confidence to the public and businesses or risk the Government’s fate.
The Government believes it can turn things around if it manages the exit out of lockdown right, returns some form of normality to our everyday lives, and manages to avoid a significant spike in Covid cases.
There is no doubt that the Government is dealing with an incredibly difficult situation that no country in the world was prepared for, but we cannot ignore the statistics which show the UK has fared far worse than other countries throughout this pandemic. The Chancellor will need to do everything he can to turn the tide and provide light at the end of the tunnel for the country in his upcoming statement.
No pressure at all!