The State of the Economy: Shrinking

Anne Marie Waters 

Tuesday May 5th 2020

 

Almost a quarter of the UK’s workforce is currently funded by the Government.  Figures show that 6.3 million people are now paid through the government’s job retention scheme that funds 80% (or £2,500) of workers’ wages. This amounts to 23% of the workforce.  In addition to this, 1.8 million have applied for Universal Credit in the last week.

We are now being warned to expect the worst; a downfall not seen since the 1930s.  Forecasts now suggest the economy will contract by 6.5% this year.

The Government says that it has so far paid out £8 billion as 800,000 employers have ‘furloughed‘ their staff since April 20th when the scheme opened.  It will last until the end of June and is expected to cost in the region of £30 billion.

There’s every reason to believe that costs could be greater than predicted, and that severe economic crash is coming.  The Government is spending billions to fund the coronavirus lockdown with one study suggesting £350 billion (so far).  The same study also suggests that the Government take legal action against China for a return of those funds.  For Britain agrees, and we have launched a petition here, please sign it.  China is responsible for this global crisis, and it must pay the price.  Literally.

Chancellor Rishi Sunak however is beginning to make some cautious comments.  In response to requests to extend the furlough scheme beyond June, Sunak said spending of this kind is “not sustainable”.  Quite an understatement!

The Chancellor went on to say: “I am working as we speak to figure out the most effective way to wind down the scheme and ease people back into work in a measured way. But as some scenarios have suggested we are potentially spending as much on the furlough scheme as we do on the National Health Service for example. Now clearly that is not a sustainable solution.”

Meanwhile, car sales have fallen to their lowest figures since the 1940s.  The Society of Motor Manufacturers and Traders (SMMT), the industry’s representative body, say only 4,321 cars were registered in April, the lowest monthly level since 1946.  This represents a collapse of 97% from the same month last year.

Car production and sales have been all but non-existent in April, so the sales that did take place, were largely “needed to support key workers and for those who had a pressing need for them” according to the BBC.

The news is as bleak as can be expected, and this is just a taste.  Difficult times are coming and they’ll need to be carefully managed.  It would be entirely neglectful of us if we not take this unprecedented opportunity for genuine change, particularly in our relationship with China.

We must alter our manufacturing practices.  Whether production takes place in the UK or another country, we must reduce our dependency on China. The whole of the Western world must do the same.

But in the meantime, we want our money back.  China lied, people died, and our economies ground to a halt.  That money must be returned to the British taxpayer and used to help businesses stay afloat and prevent a catastrophic crash in employment.

Now is the time to take back control of our own destiny; we are out of the EU, let’s get out of other unhealthy arrangements while we’re about it.

 

Anne Marie Waters 

Leader 

For Britain 

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