Rishi Sunak has warned the UK economy will “get worse before it gets better” given the latest lockdown.
The Chancellor also cautioned the “road ahead will be tough” for the UK in its recovery from the Covid-19 pandemic, as he updated MPs in the House of Commons.
He added he will “bear in mind” Tory calls to extend business rate relief and provide further support for the hospitality sector at the Budget in March.
Addressing MPs, Mr Sunak said: “Even with the significant economic support we’ve provided, over 800,000 people have lost their job since February.
“And while the new national restrictions are necessary to control the spread of the virus, they will have a further significant economic impact.
“We should expect the economy to get worse before it gets better.”
He defended the Government’s “comprehensive economic plan”, noting the fiscal stimulus amounts to more than £280 billion.
MPs heard 1.2 million employers have furloughed almost 10 million employees while almost three million people have benefited from self-employment grants.
He added: “Sadly, we have not and will not be able to save every job and every business.
“But I am confident that our economic plan is supporting the finances of millions of people and businesses.”
Mr Sunak went on: “While the vaccine provides hope, the economy is going to get worse before it gets better.
“Many people are losing their jobs, businesses are struggling, our public finances have been badly damaged and will need repair.
“The road ahead will be tough.
“Now, it is time for responsible management of our economy, taking the difficult but right long-term decisions for our country.
“But, I am confident that with this comprehensive support that Government is providing and above all, the determination, enterprise and resilience of the British people, we will get through this.”
For Labour, shadow chancellor Anneliese Dodds said the Chancellor “was nowhere to be seen” when Prime Minister Boris Johnson announced the latest lockdown.
Responding to the Chancellor’s economic update, she told the Commons: “The Chancellor was nowhere to be seen, his sole contribution to a set of announcements that had profound implications for our economy was a 90-second video on Twitter which begged as many questions as it answered.”
She added: “Today the Chancellor appears out of ideas, urging us to look towards the sunny uplands but providing nothing new.
“The purpose of an update is to provide us with new information not to repeat what we already know.”
She continued: “Will we have to wait until the Budget for a recognition of all of these problems and solutions to them?”
Ms Dodds concluded: “The people of Britain understand that they have to make sacrifices.
“They’re doing their bit for the national effort, while the vaccine is rolled.
“They’re fulfilling their side of the bargain.
“The Chancellor must fulfil his.”
The SNP’s Treasury spokeswoman Alison Thewliss also said: “I thank the Chancellor for finally gracing us with his presence and for once not redacting his statement, but I suspect that’s perhaps because there’s so little here that’s actually new.”
Conservative Tom Hunt (Ipswich) asked Mr Sunak to detail what further support might be provide ahead of the Budget, adding: “I talk specifically about the potential extension of the business rates holiday throughout 2021 and also the support on VAT.”
Mr Sunak said the hospitality sector “deserves our support” given the impact of the restrictions, also saying: “I will bear in mind his suggestions about how we can look at providing further support.”