The public have a right to some honesty
Rishi Sunak is correct. The Government does need to be honest with the public about the scale of the challenges to come. The situation facing the economy is perilous. Extraordinary support from the Treasury has allowed millions to live in a fantasy, shielded from the consequences of the past few months by billions of taxpayer money. Fixated on a second wave of Covid that may never materialise, the political debate has barely acknowledged the certainty of the economic pain ahead.
One of the most concerning issues is the size of government debt, which surpassed 100 per cent of GDP last month. There is an argument that, thanks to low interest rates and the backing of the Bank of England, there is no need to worry about the money the Treasury is borrowing to fund emergency Covid measures, and that the pre-pandemic plan to run a semi-permanent deficit to pay for election promises can survive. The risk, however, is that the environment quickly becomes less benign, and that both the cost of borrowing new money and of servicing the trillions the country already owes rises dramatically. The UK is now arguably in a worse position even than in 2008 to withstand a crisis of confidence in the debt markets.
It may be honest, therefore, for ministers to admit that some of the pledges made at the election are no longer realistic. Or that the promised end to austerity will not materialise, because of the decision to freeze the economy taken back in March. Tax rises must be avoided, since they would only stymie a recovery that is at risk of being stillborn. Indeed, more candour from the Government about what is at stake when millions refuse to return to the office would be welcome.
Tory backbenchers are worried that this is a government which follows public opinion rather than leads it, and which has become addicted to the U-turn. The latest last-minute change of policy – Trafford and Bolton in Greater Manchester are not to be freed from local lockdown restrictions, after all – may well be the right one, but MPS fear that it adds to an impression of an administration that is not in command of events. On the economy, and the public finances in particular, the country cannot afford to appear to be at sea. The public are entitled to honesty about the challenges ahead, but also to a clearly articulated strategy from ministers to overcome them.