Rishi Sunak enjoyed a meteoric rise when he was propelled to the forefront of the Treasury.
If the coronavirus crisis was the fault of Chancellor of the Exchequer Rishi Sunak, the most popular member of the UK government is trying to ensure that it doesn’t end up being his downfall.
The UK Finance Minister again made a dramatic intervention in the economy on Thursday by extending a holiday program until March, tearing up his plans from days earlier. While the nation may be in desperate need of help as England entered another lockdown, the U-turn also follows a series of missteps.
Sunak enjoyed a meteoric rise when he was hired as Director of the Treasury in February just weeks before a budget. He quickly rolled out a package to support businesses and jobs, saying he would do “whatever it takes” to protect the economy. He even drew applause from political opponents such as Len McCluskey, the socialist leader of the largest union.
Rishi Sunak is the most popular member of the British government.
In recent weeks, however, his promise has revealed its limits as the pandemic spirals out of control. The northern regions hardest hit by the virus, the Scottish government and the opposition Labor Party have bypassed it with increasing job losses. Some ruling conservatives have questioned Sunak’s apparent desire to control spending in times of crisis.
The Treasury refused to fund additional support for Manchester businesses and pay for free school meals for the poorest children during the mid-term autumn break. This stood out all the more after Sunak subsidized restaurant meals in August to help the hospitality industry, a program some studies suggest could have accelerated the spread of the virus.
Then, as infections began to exceed even the worst projections of government scientists, Sunak announced major changes in employment support five times in six weeks.
“The Chancellor has been a step backwards on events throughout this crisis, which has left many people without support,” said Lydia Prieg, head of economics at the New Economics Foundation. “Sunak’s fixation on urgently reducing support for jobs and incomes was deeply flawed.”
Britain has had a particularly scorching year as the country recorded the highest death toll in Europe from Covid-19 and measures to limit infections emerged behind the curve. Yet Sunak has polished his reputation as a business ally and steadfast force in a party increasingly agitated by the leadership of Prime Minister Boris Johnson.
The Treasury said it was still keeping the measures under review and Sunak explained to the House of Commons on Thursday why he had changed tactics several times in recent weeks, acknowledging that this had opened him up to criticism. “To anyone in the real world, this is exactly what to do when circumstances change,” he said.
But critics say Sunak, 40, has accelerated job losses by setting deadlines for the support. This is in part a function of treating the virus as a time-limited economic crisis rather than an ongoing health disaster.
What Bloomberg Economics Says …
“Sunak’s decision to extend the holiday program until the end of March has thrown a lifeline to the economy. It will not prevent the loss of jobs – unemployment has already risen and is likely to rise. again.”
– Dan Hanson, Senior Economist
On Saturday, he extended the leave program for another month, just hours before it ended, before adding four more months on Thursday.
For someone many Tory MPs see as their next potential leader, some of the shine has now come from the Chancellor. A minister, who declined to be named when commenting on Sunak’s performance, said he had gone from “deity to demigod”. “Rishi has been slowly drawn into several things he should have done earlier and has not reconciled his fiscal conservatism with the times we live in,” the person said.
Sunak still remains the top-ranked minister in the ConservativeHome website’s monthly Conservative poll, with a positive 81.1% on November 2, though down from a high of 94.8% on April 3. Mel Stride, the Conservative House Speaker of the Commons Treasury Committee, said the Chancellor has generally done “well” through tough times.
But Stride also wants Sunak to broaden the scope of his efforts to get the country through the pandemic. In the spring, the Treasury Committee urged the chancellor to devise plans to help the hundreds of thousands of self-employed workers who fell through the cracks of his assistance programs. But he never seems to.
“Having over a million people who haven’t received support and still won’t receive it in the future, I think that’s deeply problematic,” Stride said.
The Labor Party has tried to capitalize on Sunak’s approach. Finance spokeswoman Anneliese Dodds criticized her “last minute rush” to repeatedly update support levels as leader Keir Starmer sought to blame Sunak for hampering earlier lockdown efforts .
A poll conducted this week by YouGov and Savanta ComRes showed Sunak’s approval ratings among voters were at their lowest since the outbreak began. This initial popularity was in large part due to the program he launched in March paying 80% of the wages of employees on leave, according to Chris Hopkins, director of policy research at Savanta ComRes.
Sunak’s earlier insistence on replacing time off with a less generous plan, focused on supporting “viable” jobs, has drawn the ire of people working in closed industries such as events and theater.
“What gave him such a boost was the fact that he was so generous,” Hopkins said before the program was extended. “Some of that support has naturally waned.”
Sunak has now sought to address this issue by paying workers much longer than the planned month of lockdown is expected to last. His largesse came under further criticism in a week when Lloyds Banking Group Plc and retailers John Lewis Partnership and J Sainsbury Plc became the latest companies to announce job cuts.
Paul Johnson, director of the Institute for Fiscal Studies, criticized the move on Twitter, saying Sunak appeared to have learned nothing since March. He said the Chancellor was not targeting aid and was therefore wasting money.
“The government’s initially decisive approach is now likely to appear more reactive than proactive,” said Adam Marshall, managing director of the UK chambers of commerce, which represent 75,000 companies. “Too often, the business community has to speculate on what the latest announcements in a series of financial support announcements will do.”
– With the help of Kitty Donaldson.
(Except for the title, this story was not edited by GalacticGaming staff and is posted from a syndicated feed.)
