Rishi Sunak has dumped the big bazooka and gone for a thermonuclear weapon in his Herculean efforts to protect jobs, livelihoods and businesses.
In one blitz, the Chancellor has today de facto written a blank cheque to provide income for everyone in Britain who will be hurt by the devastating impact of the virus pandemic.
Speaking after Boris Johnson ordered pubs, clubs, restaurants and gyms to close this evening to slow the rise the virus, Sunak unveiled a huge package. It includes new grants and loans, deferments of tax and increased welfare payments to provide regular financial payments for those with jobs, the millions who are self-employed and those who are about to be completely without work.
What the Chancellor has done is extraordinary: he has temporarily underwritten the entire private sector and its 16 million employees and provided greater cover for the more vulnerable in society.
In a series of radical moves, the government will guarantee 80% of workers’ salaries up to £2,500 a month, allowing businesses to keep workers staying on the books and not laid off.
There will be no limit on the total cost, and the plan is to have the scheme up and running by April 1. It will be backdated to the beginning of March.
All VAT bills for the next quarter will be deferred. Renters will also get a £1 billion boost with housing benefit rising. National Insurance payments are delayed. Those who are unemployed will receive a boost to their income via Universal Credit while tax bills due by the self-employed are to be delayed.
The country’s six million self-employed and freelancers are to be paid Statutory Sick Pay via the Universal Credit System. However, this was the one part of the package which was met with bitter disappointment by the Association of Independent Professionals and Self-Employed. The trade body criticised the emergency scheme as “trailing far behind employees” and doing nowhere near enough for the self-employed.
Instead, of putting the self-employed into the UC process, it suggests that the government creates a Temporary Income Protection Fund, providing temporary grants to replace a slice of income now already being lost by freelances.
Not providing more help for the self-employed – arguably those who take the most risk in the economy but have the smallest voice – is a bad mistake for a Conservative government. It’s unclear why ministers have taken this approach – other than cost – but it’s the one group of people which need to be helped more. On this, Sunak needs to go back to the drawing board.
Apart from this missing link, Sunak’s nuclear missile included a radical and generous package of measures which received support from all corners of the country, from all the big unions, including the TUC, the CBI and other trade bodies.
Sign up for our FREE Reaction Weekend Email
Read the week's best-read articles on politics, business and geopolitics
Receive offers and exclusive invites
Plus uplifting cultural commentary
In a rare and welcome support of national unity, Frances O’Brady, head of the TUC, applauded the measures, greeting the news with a tweet: “This is a breakthrough. @RishiSunak has shown real leadership. We’re glad he’s listened to unions and taken vital steps to support working families. Employers can now be confident they’ll be able to pay their wage bills. They must urgently reassure staff that their jobs are safe.”
HMRC, and the country’s banks, are already working flat out to get the necessary schemes to introduce the grants, loans, tax deferments and mortgage relief provisions up – which have already been announced – and running as soon as possible.
What was striking about Sunak was the serious and measured yet warm approach. It’s hard to remember he has only been in his job for a month and he became an MP just six years ago. He took exactly the right tone for a nation terrified out of its wits by the potential consequences not only for their health, but also their livelihoods.
There was one moving line from Sunak’s speech, while announcing the emergency package, that leapt out at me. It was this: “Now more than at any time in our history, we will be judged by our capacity for compassion. Our ability to come through this won’t just be down to what government or businesses do, but by the individual acts of kindness that we show each other.”Compassion, an attitude that some Britons sometimes find difficult to associate with the Tories, was exactly what Sunak, and Prime Minister, Boris Johnson, have shown.
They and their Cabinet colleagues have cast aside differences of creed and ideology and worked with the unions and business leaders to come up with these measures that will hopefully save millions of jobs, protect the vulnerable unemployed, and managed to provide a lifeline to the country’s small businesses.
If they can go back and find a little more empathy for the self-employed, then there will be little to argue with. Together with those working in SMEs, the self-employed are the people that will provide the growth and future jobs for when the nation is finally rid of, and healed of this virus.
The government didn’t put a figure on what this historic intervention would cost. The cost will be enormous. But they did what was right. Hurray.