Three-quarters of a million jobs could be a risk due to the “combined failures” of the chancellor’s 2021 budget, an influential think tank has warned.
Experts from the Institute for Public Policy Research (IPPR) said Rishi Sunak didn’t go far enough to prevent a “major surge” in unemployment, accusing him of putting 750,000 jobs at risk by not pledging higher levels of public spending.
Dr George Dibb, head of the IPPR Centre for Economic Justice, said the Budget was a missed opportunity to inject life into the pandemic-hit economy.
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“The chancellor had an opportunity to boost it like Biden, using bold public investment to drive a bounce-back from the Covid-19 crisis,” he said.
“What he actually set out is not enough to restore the UK economy to pre-pandemic levels and puts 750,000 jobs unnecessarily at risk.”
Sunak presented the annual statement as an opportunity to address the economic fallout from the Covid crisis, with figures from the Office for National Statistics (ONS) showing GDP shrank 9.9 per cent last year, the largest decline in modern history. As many as 2.6 million people are at risk of unemployment in 2021.
In the Budget, which the Labour Party shot down as “papering over the cracks”, the chancellor promised an extension to the furlough scheme, business rates relief and a six-month extension to the VAT cut to support struggling businesses and protect jobs.
But IPPR said that after analysing the detail, the chancellor’s announcements wouldn’t do enough to stimulate the economy.
In his budget Rishi Sunak should have “boosted it like Biden” to secure a strong and sustainable recovery
A big stimulus would prevent such a steep rise in unemployment by delivering higher public investment, more jobs, stronger public services and providing targeted support 2/4 pic.twitter.com/w7EuBjuWfz
— IPPR (@IPPR) March 4, 2021
They added that the amount of public investment pledged by the chancellor was only half of the £190 billion needed for the economy to “ bounce back quickly, in a fair and sustainable way”, following the lead set by US president Joe Biden to create jobs and “build back greener”.
Dibb added: “We welcome Rishi Sunak’s announcements of extensions to business support, but we don’t just want businesses to survive, we want them to thrive if we are to grow our way out of this crisis.”
A Treasury spokesperson said: “Protecting, supporting and creating jobs has been our number one economic priority since this crisis started.
“Our Budget continues to deliver on this with the extension of the furlough and self-employed schemes until the end of September.
“As a result of this action and our wider package of support, the OBR now expect the peak of unemployment to be significantly lower than they forecast last year.”