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Rishi Sunak has steered a charmed course through much of the coronavirus pandemic. While other ministers have struggled, the chancellor has appeared cool, clear and decisive. As a result, while faith in Boris Johnson has declined within the Conservative party, confidence in Mr Sunak has risen. If there were to be a leadership contest any time soon, it would be Mr Sunak’s to lose.
The chancellor’s latest so-called “economy update” on Thursday should make those who have put their chips on him stop and think. This was the fourth emergency budget he has delivered during the pandemic. In itself, that is not the chancellor’s fault, for these have been tectonic times. Yet it is less than a month since the third such budget, which set out a self-described “winter economy plan”. This plan has now been rewritten even before the clocks go back. Mr Sunak has been caught out by events, not for the first time.
Four weeks ago, he expressed cautious optimism about the winter. He proclaimed that Britain was in “a fundamentally different position” from the start of the lockdown. The economy was reopening, he said. People’s lives “could no longer be put on hold”. He even allowed himself an oratorical flourish, that Britain must learn to “live without fear” with the virus. These words were seized on by many Tories as a signal that the chancellor, like the Tory right, had had enough of lockdowns.
That was only a month ago. Yet Britain is now in a very different “different position” from the one that Mr Sunak claimed to see back then. Covid cases were already mounting in late September. They have since soared. Large areas of the UK are now under much tighter restrictions, with profound economic and social consequences. The September plan, based on the withdrawal of the furlough scheme from 31 October, has proved wholly inadequate. The shabby attempt to delegate the unpopular bits of Covid policy to inadequately funded local authorities is in tatters.
On Thursday, Mr Sunak announced that his job support scheme, which has not even come into force yet, will be changed so employers will pay less and staff work fewer hours before taxpayer support kicks in. These changes are not marginal. In some cases, the Treasury, which currently underwrites 60% of pay for furloughed workers, will now pay up to 49% under the job support scheme, rather than the originally planned 22%. That is a big climbdown from the September plan, but it is still a significant cut in support. It is bound to mean more redundancies and poverty for more people.
Three important conclusions follow. The first is that Mr Sunak has again been playing catch-up, acting at the last minute, and denying hard-pressed businesses the time to plan. It is good, of course, that he intervenes. Not to do so would be even worse. Yet all the problems to which Mr Sunak responded on Thursday were foreseeable. The truth is that in September he preferred to plan for a winter economy as he wanted it to be, not as it would be and is.
The second is the shameful discovery that the government allowed a 10-day crisis to develop in relations with Greater Manchester and other authorities at the same time as the Treasury was planning new measures that could have solved much of the dispute. Extra money for the job support scheme, plus extra grants for businesses with considerable discretion for local authorities as to how they are apportioned, are significant changes. It should all have happened much earlier. It might have done if the problem had been in London.
The final verdict is that the longer the pandemic continues, the more difficult it becomes for the government to treat it as a temporary, though immense, problem. The reality is that the pandemic is reshaping everything. The end of the furlough will bring greater, not less, economic hardship. The test-and-trace system is unfit. Already, Conservative nerves are getting worse, as the revolt of five MPs this week on school meal support indicated. Mr Sunak’s supporters may imagine that he is somehow the Tories’ solution. The truth is that he is part of the problem.
Source: The Guardian
Keyword: The Guardian view on Rishi Sunak: part of the problem, not the solution | Rishi Sunak