Matt Hancock, the British Secretary of Health, has denied reports of a growing break with Chancellor Rishi Sunak on the economic fallout from measures to end the Covid-19 pandemic.
Treasury sources said that Sunak had made “robust” statements to Hancock, arguing for a clear path to normalcy to avoid the devastation of the British economy.
“It is fair to say that we need to consider all the ways to protect lives and well-being, not only the loss of life due to the virus, but also the wider implications of a major downturn,” said one Sunday. responsible for the Treasury at the Mail.
Analysts at Nomura, the investment bank, estimate that the UK economy could contract 7.8% in 2020 – the most severe slowdown since 1921 and a drop in output much worse than the 2008 financial crisis.
Some Conservative backbench MPs have begun to worry about the consequences of the foreclosure, citing studies showing that it could lead to more deaths due to increased mental illness, the impact of unemployment or cancellation of hospital appointments for other conditions.
Many are concerned about how and when economic aid from the Treasury will be withdrawn once social distancing measures are relaxed. “My mail bag is full of angry businesses: they are worried about getting support, worried about how long it will last and, most of all, worried about how it will be removed,” a senior official Tory told Financial Times.
Another MP said that small businesses in their ridings were afraid of surviving. “Companies are afraid. By this summer, Rishi will support the bulk of the economy. It is not sustainable and it will have to end at some point. So what? “
Speaking on Sky News Sunday morning, Hancock said that Sunak was doing “absolutely brilliant” work as Chancellor of the Treasury. “We are working closely together,” he said. “Measures he put in place to support people. . . are absolutely phenomenal. It has been praised worldwide for its first-rate economic response. “
Hancock said he understands the impact of social displacement on people’s lives. “This is why we need determination as a nation to follow these rules so that we can get out of them as quickly as possible.”
A Treasury figure told the FT that there was no “dispute” between the two ministers. “The chancellor is primarily concerned with the welfare of people, hence the economic package he has delivered,” he said. “We are all aware of the need for a coherent exit strategy in order to revive the economy, but it must be done in the safest way possible.”
However, there are great concerns within the Treasury over how the economic intervention will end.
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“The withdrawal of these packages will be painful and lead to very difficult political choices for the chancellor,” said a Whitehall official. “Go too fast and we will end up with huge unemployment and lots of bankruptcies. Move too slowly and the deficit will increase. “
But some members of the Johnson government have said it is too early to think about ending the economic recovery before the peak of the crisis.
“Next week, everything will be dedicated to the NHS and the increasing number of deaths. This remains our main concern. Until we know how or roughly when the lockdown is going to end, it is impossible to say how we can wean the economy from state largesse, “said a minister.
Neil Ferguson of Imperial College London, who was a key government advisor on the coronavirus, was interviewed on Sunday on the exit strategy.
“I am very aware that people are suffering in this country right now, there is a cost, economic, social and financial for this country – and probably also for health – we all want it to end as quickly as possible” , did he declare. tell the BBC Andrew Marr Show. “But that is useless unless we find a strategy that allows us to get out of it and at the same time maintain a weak transmission. “
Professor Ferguson said he expected the peak of the epidemic in seven to 10 days.
Hancock said the NHS needed 18,000 ventilators – double the current level – while admitting that there could only be 13,500 in hospitals by Easter.
He warned that people may be prohibited from exercising outdoors unless they follow the rules of social distancing. “If you don’t want us to take the step to ban the exercise of all forms outside your own home, then you have to follow the rules,” he told the BBC.