British finance minister Rishi Sunak said the UK needs to face up to the high borrowing necessary during the COVID pandemic.
On Wednesday, Sunak spoke with Prime Minister Boris Johnson and other ministers. That was ahead of his budget statement to parliament which was due around 1230 GMT.
The Chancellor said they must be honest with themselves and the country about what it means. They are borrowing on an extraordinary scale, equivalent only to wartime levels. This was a statement from a spokesman for Johnson.
As a Conservative Government, they know they can’t ignore this problem, it wouldn’t be right or responsible to do so, the spokesman added.
‘Whatever It Takes’ in COVID Budget Plan
Meanwhile, Sunak will promise on Wednesday to do “whatever it takes”. This includes a five-month extension of Britain’s huge jobs rescue plan. This will steer the economy through until the COVID restrictions are over.
He has already racked up Britain’s highest borrowing since World War II. In his budget speech, he will turn to the bond markets again. He will say that the task of fixing the public finances will only start once a recovery is in sight.
They’re using the full measure of their fiscal firepower in protecting the jobs and livelihoods of their people. This is according to excerpts of his speech which is due to begin around 1230 GMT.
Firstly, they will do whatever it takes to support their people and businesses through this moment of crisis. Secondly, once they are on the way to recovery, they will need to begin fixing the public finances.
He wants to be honest about their plans to do that. Thirdly, with this budget they begin the work of building their future economy. These will be part of his statements to the parliament.
Notably, Britain has suffered the biggest COVID-19 death toll in Europe. Moreover, among big rich countries, the heaviest economic shock, according to headline measures of official data.
Last year it decreased by 10%, its worst decline in three centuries.
On emergency support measures as well as tax cuts, Sunak has spent almost 300 billion pounds ($419 billion).
However, the prospect of a rebound from the pandemic has grown due to Europe’s fastest COVID-19 vaccination programme.
The finance minister has repeatedly said he will be “honest” about the cost of the unprecedented support. He has pointed to borrowing costs rising from record lows recently. This is sparked by the prospects of a global economic recovery and U.S. President Joe Biden’s nearly $2 trillion stimulus plan.