When Rishi Sunak was appointed Chancellor in February, he must never have imagined that his first address to the Conservative party conference would be made to an empty room. Nor would he have expected to have his entire speech dominated by a pandemic. Yet in his short, direct address, Sunak barely strayed from Covid-19. He reminded the public of the government’s vast interventions to curb the impact of the virus — and hinted at what steps might be taken in future as the Treasury deals with the aftermath of our six month spending spree.
In a run-down of the many schemes — and billions of pounds — directed towards the crisis so far, Sunak once again prepared the public for the hardship to come: ‘I have always said I couldn’t protect every job or every business. No chancellor could. And even though I have said it, the pain of knowing it only grows with each passing day.’
Each passing day brings us closer to the end of the furlough scheme and the start of the jobs support scheme, which will see government and employers swap places, with the latter now responsible for covering more than 50 per cent of their employee wages. These increased costs for employers, coupled with employees needing to work at least part-time to receive the subsidies, will inevitably result in redundancies. Many people on furlough will soon discover that in this Covid-economy, there is no job for them to return to.
The Chancellor attempted to limit expectations for getting the public finances under control. He noted that controlling borrowing would be a project that would last for longer than ‘the medium term’. This was an indication to fiscal hawks that they must learn to live with bigger debt — but it was also an indication to borrowing advocates that the Chancellor does not believe in a free ride. Sunak made clear that there is an ethical imperative in balancing the books as well as fiscal one:
We have a sacred responsibility to future generations to leave the public finances strong, and through careful management of our economy, this Conservative government will always balance the books. If instead we argue there is no limit on what we can spend, that we can simply borrow our way out of any hole, what is the point in us?
The flow of Sunak’s speech also provided some insight into the government’s plans for economic recovery. He paid notable lip service to businesses and entrepreneurs. Sunak spoke of their vital importance in boosting the jobs market, pledging to make it easier ‘for those with the ambition and appetite to take risks and be bold, to do what they do best and create jobs and growth’. But before he praised the private sector, Sunak was keen to applaud that which stood ‘between the people and the danger’ at the height of the crisis: the government itself.
While we would not have wished for this burden, it has been for many, for the first time in their lives, a moment in which government ceased to be distant and abstract but became real and felt and something of which people could be proud. Action met words.
The Chancellor’s speech laid the groundwork for the Prime Minister’s address tomorrow, in which Boris Johnson will restate his manifesto pledges: significantly more government spending (planned long before Covid) to ‘level-up’ parts of the country by investing in infrastructure, transport and education.
The challenge for Chancellor and PM is how the public squares their list of government achievements with news headlines, including nearly 16,000 missed cases of Covid-19 and the possible delay of millions of surgeries for waitlisted patients, many of whom are have been struggling to access treatment since the pandemic hit.
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