Reaction leader: Sunak’s exceptional measures are welcome – but they must be temporary

BY The Editorial Board   /  20 March 2020

The package of financial measures announced to counter the economic effects of the coronavirus crisis is, in the words of chancellor Rishi Sunak, “unprecedented in the history of the British state”. For the first time, the Government will pay workers’ wages, put a safety net of subsidies under businesses and deny itself substantial tax revenues at least in the short term. It extends the embrace of the state far beyond what the Labour government imposed between 1945 and 1951, or even the most extravagant wish list of doctrinaire Trots.

Reaction is a champion of free markets and enterprise, enthused by the early pledges of Boris Johnson to free up Britain for optimum performance in the forum of global capitalism. So, what do we think of this unprecedented escalation of state control? We welcome and applaud it, is the answer. The measures announced by the Prime Minister and the Chancellor are both necessary and responsible. Any lesser response would have been a betrayal of the nation, particularly of our most vulnerable citizens.

Historic crises are times when ideology must take second place to pragmatism. A global pandemic in which Britain is already one of the worst-hit countries is not a time for taking an inflexible stance in assertion of Chicago School principles: the grudge match between Keynes and Friedman needs to be postponed along with all the fixtures in the football calendar. The reality is that markets cannot function effectively under current conditions.

The Government proposes to pay 80 per cent of the wages of workers, in a job retention scheme with “no limit” on funding, up to £2,500 a month. Businesses will be eligible for interest-free loans for 12 months, no VAT payments will be exacted before the end of June, the Universal Credit standard allowance will be increased by £1,000 a year and self-employed workers will be able to access Universal Credit at a rate equivalent to statutory sick pay for employees. Local Housing Allowance will cover at least 30 per cent of market rents.

This Tory government is handing out cash on a scale to dwarf a Jeremy Corbyn election manifesto. What would the Iron Lady have said? She would have said: “Is there anything we have overlooked?” She was a pragmatist. Nothing except a proven vaccine can banish the fear gripping the people of Britain; but these measures will bring material reassurance to households that were terrified about financial survival.

Inevitably, we can soon expect to hear innumerable stories of benefits not disbursed, of crashed government websites, of chaos and official incompetence. We have just had a salutary reminder of how badly officialdom can fail with the publication this week of the report on the Windrush scandal. It is shaming for Britain, even if it was caused more by incompetence and officials moving on tramlines than deliberate racist malice. All who suffered must be adequately compensated. At the same time, that disgraceful episode must not be exploited by political activists to embarrass the Government into an open-doors immigration policy post-Brexit.

Similarly, once the coronavirus has finally been overcome, we must be vigilant to ensure the state does not illegitimately retain the powers of intervention it has legitimately assumed to weather the crisis. That ploy was tried by Labour post-1945, with the result that wartime rationing ended in defeated Germany in 1949 but by the time it was finally abolished in victorious Britain, Elizabeth II was on the throne. “Unprecedented measures for unprecedented times,” was Rishi Sunak’s description of this unique exercise in Tory paternalism. That is true and fair; but they must end at the termination of unprecedented times.


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