London Letter: Sunak basks in gratitude as he shows his command of detail

Unusually for a major financial statement the prime minister was not in his place in the House of Commons on Thursday as his chancellor of the exchequer announced a new coronavirus job-support scheme.

Downing Street said Boris Johnson had a pressing engagement meeting new police recruits in Northampton, an event the Northamptonshire Chronicle and Echo described as a "surprise visit".

If he had been there he would have seen Rishi Sunak bask in the gratitude and adulation that Conservative MPs withheld from their prime minister when he announced the latest coronavirus restrictions this week. Sunak was bearing bad news too, dramatically scaling back wage subsidies in a move expected to trigger a surge in unemployment later this year.

But the chancellor has a command of detail that is foreign to Johnson, and a fluency in explaining not only what he is doing but why he is doing it. The furlough, which paid people to stay at home and not work, was the right solution when the coronavirus appeared to be a temporary disruption but now that it was an enduring fact of life something new was needed.

Covid-19 crisis appears to strengthen French resolve for EU fiscal harmonisation

---

Period of ‘extreme stress’ beckons for Irish businesses

---

Military to help Madrid region contain pandemic

---

Sunak unveils new wage subsidy scheme aimed at ‘viable’ jobs

---

“We need to create new opportunities and allow the economy to move forward, and that means supporting people to be in viable jobs that provide genuine security.

“As I have said throughout this crisis, I cannot save every business. I cannot save every job. No chancellor could. But what we can and must do is deal with the real problems businesses and employees are facing now,” he said.

The policy, which is similar to Germany’s Kurzarbeit, seeks to encourage employers to keep more workers on the payroll on reduced hours than fewer fulltime. It is less generous to both employers and workers than the furlough scheme, and it is designed to protect only those jobs that are still being done and will still be viable six months from now.

The problem is that some sectors such as the arts and parts of the travel industry can scarcely operate at all under coronavirus restrictions, and their workers are unlikely to benefit.

Handouts

Sunak’s other announcements were mostly extensions of loan periods and tax deferrals rather than the handouts to businesses seen at the start of the pandemic.

That did not stop Tory backbenchers from popping up one after another to thank the chancellor for his largesse and to invite him to their constituencies to view the fruits of it.

"Jono Edwards, who owns the world-famous Junction Bar & Restaurant, is very happy with the chancellor," said Ashfield MP Lee Anderson.

“Jono tells me that without the chancellor’s support his bar would have closed and his staff, who are like a family to him, would have lost their jobs. May I pass on my thanks to the chancellor from every single pub and hospitality business in Ashfield for extending the 5 per cent VAT cut until next March? Jono Edwards, Dame Margo and Donna at the Junction pub will be very happy with this great news.”

Sunak’s predecessor Sajid Javid said the chancellor had shown the decisiveness, resilience and creativity that the country needed, and that he had shown a willingness to do whatever it took to protect the economy.

It is a measure of how much the Conservative party has changed that only one MP, Cheryl Gillan, asked the chancellor how he proposed to pay for it all.

“Does my right honourable friend remember the Micawber principle: ‘Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery’. What can he say to my constituents who ask how we are going to pay this enormous bill, and how can he ensure that we provide value for money for the taxpayer?” she said.

Tax rises

Sunak welcomed the question and the sentiment behind it, and at a press conference in Downing Street later he suggested that tax rises would be inevitable in the future.

Mr Micawber did not live by his own principle and neither does the prime minister, who is reported to have overruled the chancellor when he proposed to limit an automatic rise in the state pension.

As he busks his way through his premiership and the challenges of coronavirus, Brexit and the public finances, Johnson appears to be guided by the other famous Micawber principle: “something will turn up.”