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Sadiq Khan: Chancellor's mini-budget 'fails to address scale' of economic crisis
8 July 2020, 17:50
Chancellor Rishi Sunak's mini-budget "fails to address the scale" of the looming economic crisis, Mayor of London Sadiq Khan has said.
Mr Khan told Shelagh Fogarty that in ordinary times, the chancellor's statement would not be "a bad mini-budget."
However he said these "aren't ordinary times, they're extraordinary times" and Mr Sunak instead "failed to understand the scale of the task" before him.
On Wednesday, the Chancellor of the Exchequer delivered his summer statement to MPs in the House of Commons, announcing a raft of measures to help get businesses back on track as they come out of lockdown and to help protect jobs.
Among them includes an 'Eat Out to Help Out' voucher scheme that will give customers 50% off their meals at cafés, restaurants and pubs for August; VAT cuts from 20% to 5% for the service industries; and slashing stamp duty on homes worth up to £500,000.
Shelagh quizzed the London Mayor on whether he thought Mr Sunak's plans would be successful.
"The biggest problem with this mini-budget is it fails to address the scale of the challenge we are facing," he said.
"Just like this Government was slow to respond to the health consequences of Covid-19, they've been slow to respond to the economic consequences. The Bank of England has said this will be the worst recession in more than 300 years and for those employers that would, in any event, have kept on a member of staff, they'll get a windfall of £1,000.
"But here's the problem; we've got a number of sectors in London, think of hospitality, think of culture, think of creative industries where, from next month, employers are required to pay a contribution to their employees' wages, to their National Insurance and their pension contributions in advance of the furlough scheme ending, and these furloughed people will be, I'm afraid, made unemployed because the employers can't afford to keep them on.
"What the government should have done instead was to have an extended furlough scheme for those sectors."
When asked if there was anything good in the Chancellor's statement, he said: "There's some stuff that I welcome.
"I welcome, of course, the future jobs guarantee. Some people will benefit from the help given to younger people, that's a good thing. I welcome the idea of a green deal, but I think £2 billion is not enough, it should be far greater."
He added: "The Chancellor has said he'll come back for another announcement in the autumn, but by the time he makes it we'll have mass-unemployment in London and around the country."