Chancellor pointed to the “deep economic challenges” we have faced, citing the IMF’s expectation that the world will head into the worst global recession since the records started when our own economy was stalled.
“In just two months, our economy has shrunk by 25% – the same amount it has grown in the past eighteen years. “
The Office for Budget Responsibility estimates that there will be more than £ 130 billion in government support and additional public funding until the end of October through leave, more generous benefits, grants businesses, public spending, tax deferrals and loans; then the chancellor unveiled another big stimulus plan on Wednesday up to £ 30 billion all the more so since he was trying to create the conditions for a V-shaped economic recovery in a dark context of potentially millions of job losses and a fall in household consumption.
A chancellor who claims to tackle this crisis “without a hitch of dogma” and will continue in this spirit. “We will not be defined by this crisis, but by our response,” he said.
And to that end, the Chancellor was tasked with rehabilitating the Johnson administration, whose approval rate dropped as the crisis was dealt with.
In issue 10, it is estimated that if the government can manage the economic crisis better than the health crisis, it will be forgiven for some of the mistakes it made in nursing homes, the protection of health workers, the timing of lock and the high number of deaths. .
This helps explain why Mr. Sunak is a chancellor who is not so interested in economic ideology, but rather what he thinks he can work.
Just look at the Chancellor’s version of Labour’s Future Jobs Fund 2009 – the £ 2 billion put into a “start-up program” to get young people into internships – and the “job retention bonus” to see that ‘He is ready to continue injecting public money into the economy to try to protect jobs – and mitigate attacks on the job.
But of course, Mr. Johnson and Mr. Sunak lead a party that is interested in ideology and deeply concerned about maintaining traditional conservative values of low taxes, tight controls on borrowing, and limited public spending.
Faced with an acute economic crisis, MPs let the leadership chart an interventionist path. But in the tea rooms, I was told that there was a main topic of conversation among the Conservative members. How the hell are we going to pay for this when the bill arrives?
Faced with an unprecedented economic crisis, the party has supported the unprecedented economic packages put in place in recent months, but there is growing concern about Treasury debt levels, and increasing demands for a fiscal framework for repay the eye. borrowing levels (expected to reach more than £ 350 billion this fiscal year).
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The self-proclaimed old Thatcherite, Sir Edward Leigh, spoke on behalf of several of his colleagues when he argued in the Commons that “there are no good long-term subsidized jobs” and asked the Chancellor to ‘ensure’ that we have a plan to pay down the national debt otherwise, as a previous speaker said, there will be no more money ‘.
Sajid Javid, the former chancellor, asked his successor to fix new tax rules in the fall with the aim of “reducing our national debt in proportion to our national income by the end of this legislature”.
Mr. Sunak knows only too well how easy it is to spend the money and how difficult it will be to repay it.
He is playing with huge sums now in the hope that this will minimize the economic damage of the pandemic in the longer term.
But what he cannot yet know is whether this stimulus plan will work.
With regard to employment, Labor believes that job retention money should be better targeted for the sectors that really need support.
A Conservative member told me that it was a bit of a “deadweight” plan since the payments go mainly to companies that would have brought workers anyway. But since these are cash grants for the hardest hit sectors, he buys Mr. Sunak at least a while.
What the Chancellor also cannot predict is the reaction of consumers. He tried to use his statement today to entice people to return to our bars, restaurants, cafes and hotels by reducing the VAT and even offering to pay for our meals for at least part of the week.
But how many people are ready to make up for the national recovery depends on the virus and whether it can be kept at bay, as the government tries to accomplish the difficult task of balancing the management of the pandemic while reopening the economy .
As Mr. Sunak himself said, this government will be defined by how it reacts to the crisis. But what makes it so difficult is that when it comes to the virus, politicians are not in full control.