Sunak in ‘ no win’ situation

Furlough holds key to future

THIS IS not the set of economic circumstances that Rishi Sunak envisaged six months ago when he launched the Government’s pioneering furlough job retention scheme.

The Chancellor hoped that he would be able to end the state subsidy of wages, which has already cost £ 39bn, next month and focus on economic recovery measures in the now delayed Budget and Spending Review.

Now, with urgent action needed to suppress the spread of Covid which is projected to cost the UK economy at least £ 300bn in 2020- 21, Mr Sunak’s position is even more unenviable as he unveils a new plan “to continue protecting jobs”.

Yet, whilst he has previously made clear a reluctance to add to the borrowing that has staved off an even greater calamity, he clearly views it, in light of more recent events, as a small price to pay to get the nation through this latest crisis and his approach can be construed as the epitome of fiscal responsibility. This is borne out by his desire to brief MPs on “plans to continue protecting jobs through the winter”.

The Richmond MP’s first priority will be ensuring the self- employed and freelancers – people who have not benefited from assistance schemes to date – do receive support where appropriate. They are the forgotten victims of this pandemic.

Next is the possibility of embracing the German model where subsidies are available where an employer is able to offer workers 50 per cent of their normal hours. It would offer a degree of job protection for the winter.

Finally, Mr Sunak needs to implore his Cabinet colleagues to get to grips with testing – and track and trace schemes – so the country is better placed to both live, and work, with Covid- 19. It is this policy challenge which is now compromising the economy, and holding the country back, as the Chancellor’s bills, and problems, spiral.