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Rishi Sunak did not pull his punches when he laid out the scale of the task ahead as the government tries to steer the British economy off the rocks of a deep recession.
The chancellor pointed to the “profound economic challenges” we faced, citing the IMF’s expectation that the world is heading for the worst global recession since records began, while our own economy had ground to a halt.
“In just two months our economy contracted by 25 per cent – the same amount it grew in the previous eighteen years.”
The Office for Budget Responsibility estimates there will be more than £130 billion of government support and additional public funding up until the end of October via the furlough scheme, more generous benefits, business grants, public spending, tax deferrals and loans; and then the chancellor unveiled another big stimulus package on Wednesday worth up to £30 billion more as he tried to create the conditions for a v-shaped economic recovery against the bleak backdrop of potentially millions of job losses and a slump in household consumption.
A chancellor who says he is approaching this crisis “unencumbered by dogma” and will continue in that spirit. “We will not be defined by this crisis, but by our response to it,” he said.
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And to that end, the chancellor has been tasked with rehabilitating the Johnson administration, whose approval ratings have fallen over the handling of the crisis.
Within Number 10 there is a view that if the government can navigate the economic crisis better than the health crisis, it will be forgiven for some of the mistakes it made around care homes, protecting health workers, the timing of lockdown and the high death toll.
It helps explain why Mr Sunak is a chancellor not so interested in economic ideology, but rather what he thinks might work.
You only have to look at the chancellor’s version of Labour’s 2009 Future Jobs Fund – the £2 billion put into a “kickstart scheme” to get young people into work placements – and the “jobs retention bonus” to see that he is prepared to continue pumping public money into the economy to try to protect jobs – and blunt Labour’s attacks.
But of course Mr Johnson and Mr Sunak lead a party which is interested in ideology and cares deeply about maintaining traditional Tory values of low taxes, tight controls on borrowing and constrained public spending.
In the face of an acute economic crisis, MPs have let the leadership chart an interventionist path. But in the tea rooms I’m told there was one main subject of conversation amongst Conservative MPs. How on earth are we going to pay for it when the bill comes in?
Faced with an unprecedented economic crisis, the party has supported the unprecedented economic packages put in place in recent months, but there is growing disquiet about the levels of debt the Treasury is taking on, and growing demands for a fiscal framework to repay the eye watering levels of borrowing (set to rise to more than £350 billion this financial year).
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Self-described “old Thatcherite” Sir Edward Leigh spoke for many of his colleagues when he argued in the Commons “there are no good long-term subsidised jobs” and asked the chancellor to make sure “we have a plan to repay the national debt, otherwise as a previous speaker once said, there will be no more money”.
Sajid Javid, the former chancellor, asked his successor to set out new fiscal rules in the Autumn with an aim of “getting our national debt down as a proportion of our national income by the end of this parliament”.
Mr Sunak knows all too well how easy it is to spend the money and how hard it will be to pay it back.
He is gambling with vast sums now in the hope that it will minimise the economic damage of the pandemic in the longer term.
But what he cannot know yet is whether this stimulus package will work.
When it comes to employment, Labour think the job retention money should be better targeted for sectors that really need support.
One Tory MP told me it was a bit of a “dead weight” scheme given that payments are mainly going to firms that would have been bringing back workers anyway. But as what it amounts to is cash grants for the hardest hit sectors, it at least buys Mr Sunak some time.
What the chancellor also cannot predict is how consumers will react. He tried to use his statement today to entice people back to our bars, restaurants, cafes and hotels by cutting VAT and even offering to pay for our meals for at least some of the week.
But how much people are prepared to do for the national recovery depends on the virus and whether it can be kept at bay, as the government tries to perform the difficult balancing act of managing the pandemic while re-opening the economy.
As Mr Sunak said himself, this government will be defined by how it responds to the crisis. But what makes that so hard is that when it comes to the virus, politicians are not in full control.