Chancellor opens his money box to soften the Covid blows

ONCE again Chancellor Rishi Sunak has produced a set of measures that demonstrate his deft touch in softening the economic blow from the continuing impact of coronavirus on business and jobs. His package of measures yesterday was widely welcomed in business. The only thing his Labour shadow Anneliese Dodds could throw at him was to say she thought of it all first – and that it had better work.

But all through the coronavirus crisis Mr Sunak has had the easiest job among of all his cabinet colleagues. Like Mr Nasty and Mr Nice, Prime Minister Boris Johnson steps up on Tuesday to give us all the bad news about the need for tighter restrictions to control the spread of Covid-19. Then his Chancellor follows a couple of days later with the soothing financial balm.

It won’t always be like this.

As the millions and billions rolled off Mr Sunak’s tongue yesterday like so much Monopoly money it might have seemed as if a bottomless cash pit could be mined forever. It cannot. And while it is right that given the likely six months of semi-lockdown we are facing, investment to retain jobs is made, payback time is coming.

The longer the crisis goes on the closer that comes to the time when the Conservatives must go to the country at another General Election.

If Mr Sunak can still demonstrate such sureness of touch when it comes to paying back all the cash he has borrowed on our behalf then the plaudits he has already received as a brilliant Chancellor really will be deserved.

In the meantime, however, we can judge him only on his efforts to stave off disaster during one of the most challenging periods of financial instability for decades. And they have been and continue to be impressive.

While the sums being borrowed and spent are eye-watering, the real skill comes in devising measures that not only work in the short-term but can be shown to be even less costly than simply letting the impact of the virus on the economy take its course. Do that and we really would see hardship and loss on an epic scale.

Mr Sunak has been careful not to over-promise. While some of his colleagues in Government, including Boris Johnson, have been forced to eat their words when pledges of “world class” measures have proved anything but, the Chancellor has consistently reminded us all that he can’t save every business or preserve every job. And as we move from furlough into an inevitably less generous support scheme for jobs, that is going to become apparent all too quickly.

Mr Sunak acknowledged that this is not a crisis which will end with a return to the status quo. We must get used to the new normal which means economic adjustment, a rethink about the jobs many of us do and perhaps permanent change.

Tourism and hospitality have been hardest hit and continue to receive the greatest targeted support. It is a relief to see the 5% VAT rate retained for those sectors, which will mean a huge amount here in the Westcountry. The future is still uncertain. But the Chancellor continues to do his best to cushion the blows.