Rishi Sunak has said that government bailouts are not an “attractive long term feature of the economy” as companies grapple with the impact of coronavirus.
Speaking to Bloomberg TV, the Chancellor said the government is the last resort and the bar is “exceptionally high” for company bailouts.
He noted: “This is not my money. It’s not the government’s money. This is taxpayers’ money. I shouldn’t be sitting here trying to pick winners.”
He added that investors would be expected to help shoulder the costs. “It’s not something that’s an attractive, long term feature of the economy and if we’re in a situation like that one would obviously expect financial investors and creditors to significantly share in the burden.”
However, he stressed his priority “absolutely is to try and protect and preserve as many of those jobs as possible”.
The number of people out of work and claiming benefits jumped 23 per cent to 2.8m last month as the pandemic forced firms to close. Job centre figures show an 126 per cent increase in claimants since the start of lockdown.
Sunak has already committed billions to revive the economy as businesses struggle due to lockdown restrictions. The government’s job retention scheme is covering millions of employees until October, while the Treasury has also put in place a number of loan schemes to help companies weather the storm.
Speaking with Bloomberg, Sunak that more fiscal stimulus could be on its way. “Obviously the government can do things to help with the recovery. The prime minister will be making a speech later as well. I will be outlining further things in the coming weeks.”