The Guardian view on Rishi Sunak: right words, right focus, wrong policies | Opinion

Almost alone among his cabinet colleagues, Rishi Sunak has a knack for saying the right thing at the right time. He did it again on Wednesday while unveiling his plan for jobs. “We entered this crisis unencumbered by dogma,” the chancellor told fellow MPs. “And we continue in this spirit, driven always by the simple desire to do what is right.” Fine words uttered in a sympathetic tone. The trouble is, they are not matched by actions. The former investment banker, who can see that the UK is entering a historic economic and social crisis, is grappling with the ambitious politician who doesn’t want to scare Conservative backbenchers. What emerges from this unhappy struggle is the strange alloy offered on Wednesday: sound analysis, sensible priorities but underwhelming, sometimes even wrongheaded policies.

Where Mr Sunak is correct is that this recession is unlike any the UK has faced in decades. In order to contain a lethal virus, almost all of the real-world private sector has had to freeze in its tracks. Spending on restaurants, travel and entertainment has fallen by as much as 80%. The public sector has had to spend unprecedented sums where businesses and households cannot, covering the wages for 9 million jobs, underwriting loans to firms, and funding apprenticeships. Costing £160bn since March alone, this is hugely expensive but essential. The chancellor has sensibly ignored the backbenchers calling on him to lay out plans for spending cuts in the future. To do so now would be to damage business and consumer confidence.

Finally, the Treasury is right to focus on preserving and creating jobs. Over the past few weeks, independent economists had speculated that up to 5 million Britons could be out of work by next year; even now, it looks quite likely that unemployment could top 3 million within months – a level not seen since Margaret Thatcher was in No 10. Between coronavirus and the turmoil of Brexit, we are almost certainly lurching into a jobs crisis.

Yet even as Britons head into a hurricane, Mr Sunak hands round cocktail umbrellas. Possibly his single biggest mistake was to announce that the furlough scheme will come to a sudden end in October – the “cliff edge” that the Greater Manchester mayor, Andy Burnham, and many others begged him to avoid. In its stead will come a retention bonus of £1,000 for each furloughed worker employed until January. This looks less like job creation and more like a handout for companies. Treasury officials have a hidebound prejudice against explicitly supporting particular industries, but it would have made sense for the furlough scheme to be extended for those working in hospitality, culture and other sectors where social distancing makes business as usual a distant dream.

It would also have been smart to consider subsidising employees to work fewer hours, as Germany does with its Kurzarbeit programme. The most notable absence of all was anything for the self-employed, for whom it took the government weeks of pressure in spring to devise help. Mr Sunak’s defenders will say that he can always make more announcements, just as he brought out three consecutive budgets in March. But businesses and households need to make plans, and soon. They will already be making investment and spending decisions: keep that office or not? Buy that equipment or pause? Send my child to university or wait and see?

The priorities chosen by Mr Sunak are also odd. A few weeks ago, the government dragged its heels over providing meals this summer to hungry children. It took a fervent campaign, an angry press and a Premier League footballer to get Boris Johnson to U-turn and spend the £120m. On Wednesday afternoon, the chancellor committed over four times that sum to giving every family a half-price meal next month. He threw £4bn at the housing market, but offered nothing to renters. The government, which on Sunday evening clapped for carers, showed them an empty hand.

This crisis has exposed a bust economic model and a broken social contract. On Wednesday the chancellor showed no interest in changing either, in seriously greening industry or making jobs better. His chief objective was in getting back to business as usual as quickly as possible. Given what lies ahead, he is unlikely even to achieve that.

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