For someone who has only been Chancellor for 5 months, Rishi Sunak is proving a remarkably calm and capable operator. This is lucky, because never have these qualities been more important.
This is a critical moment. The withdrawal of furlough payments, amidst deep economic uncertainty and the continuation of social distancing, is a major risk: the UK could see an unprecedented collapse in employment that would do long lasting damage to our economy.
For this reason, Rishi Sunak’s overwhelming focus was on jobs – on their protection and creation.
It was an impressive array of measures.
Firstly, on jobs themselves he announced:
- A jobs retention bonus payment of £1,000 to keep on workers returned from furlough;
- A ‘Kickstart Scheme’ of £2 billion to pay for 6 months' worth of wages for firms who create new jobs;
- A payment of £2k to firms who create a new apprenticeship;
- Plus, a boost to careers advice, job centre support and new traineeships.
Secondly, he announced wider stimulus, including bringing forward infrastructure spending, a welcome £2 billion fund for households to improve home insulation and a wide-ranging stamp duty cut to boost the housing market and consumer sentiment.
And thirdly he set out a new set of targeted interventions, including a VAT cut from 20 to 5% for hospitality & tourism, food and accommodation from next Wednesday until January in a hope to boost spending for these badly hit sectors. And a rabbit (undercooked or well done?) from the hat of an ‘eat out to help out’ voucher to get people back to restaurants and takeaways.
All this was focused on the main risk, all of it well targeted. However, it remains a gamble. Are firms confident enough to retain and create enough jobs in the face of such uncertainty? Will the measures be enough to counterbalance the hit to income and capacity that social distancing has given to our hospitality and food & drink industries? Will we see a second spike and local lockdowns to blow events off course?
The Chancellor has an Autumn budget as fallback in case this statement isn’t enough. But in the meantime, let’s take up his generous offer to help our economy recover – if the Chancellor is buying, it is up to us to help support getting our local economy back on track.