Chancellor Rishi Sunak is popular with MPs and the people, spending unreservedlydespite UK entering the severest recession and unemployment Britain has ever seen,government borrowings are going up exponentially. Debt at the end of May 2020 was 100.9% of GDP, the first time that debt as a percentage of GDP has exceeded 100% since the financial year ending March 1963.Debt at the end of May 2020 was £1,950.1 billion, an increase of £173.2 billion (or 20.5 percentage points) compared with May 2019, the largest year-on-year increase in debt as a percentage of GDP on record.
At the end of June Boris Johnson brought forward £5billion to build schools, road and hospitals for Britain promising jobs galore. On Wednesday Sunak’s Summer Statement filled in the detail with a £30billion stimulus for job retention and generation; UK Employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.
During August a 50% reduction of up to £10 per headon sit-down meals and non-alcoholic drinks will apply from Monday to Wednesday, dubbed the meal-deal.
Stamp Duty has been waived on property transactions up to £500,000, a genuine fillip for first time buyers. The apprenticeship scheme has been tripled with incentives for employers, green home grants are available for plumbers, builders and tradespeople, and VAT is reduced to 5% for goods and services supplied by the tourism and hospitality sectors.
The folks not satisfied with Wednesday’s boosts are the self-employed who always seem to be last to benefit and businesses who cut directors/partners and senior employees’salariesto avoid furloughing younger employees, and to ensure the longevity of their businesses, these efforts have received no reward.
Sunak’sCovidstimuli have been effective, HM Treasury finds the poorest deciles have been most assisted, and the wealthiest deciles have been hit harder with household income dropping by 15%.
Rishi Sunak does not pretend choices are without downsides, he addresses the public like adults, but these gifts cannot go on giving,Sunak has avoided ruling out future tax rises to pay for Corona virus spending.
MP David Davis asked the question how will all this debt be funded, long term folks are worried about Britain’s credit rating; Davis proposes the modern equivalent of a war bond, to finance the debt independently of the economy over a 50 year period.
Critics ponder with 30,000 job losses to date and where are the new jobs coming from? And have the government any plans to spend money helping business to create safe environments so folks are confident to eat out, go to the gym etc.The sectors that have grown during lockdown are ed-tech, e-health and online services/retail.
Sunak definitely has political appeal, his tone empathetic and humanistic without being patronising. He is clever and innovativeand these qualities have led to a new epithet of “PM in waiting”. Sunak is good at communicating, his social media feeds are full of useful detail subtly branded in the corner with his signature.
Sir Mark Sedwill the Cabinet Secretary appointed by Theresa May, National Security Advisor and Head of the Civil Service is leaving Downing Street, his “pension contribution” is said to be nearly £250,000 suggesting his departure was not voluntary. Johnson has invited Sir Mark to lead a new G7 panel on Global Economic Security as the UK assumes the presidency. Now Sedwill’s former position is being divided, David Frost currently the Chief EU negotiator will become the PM’s dedicated NSA from September. The First Civil Service Commissioner, Ian Watmore, will be launching a competition to appoint a new Cabinet Secretary and Head of the Civil Service. This appointment will need to have a good rapport with Dominic Cummings, whose reform ideas for Whitehall include being more governance than government and making the institution answerable to MPs.
After seven months with no Intelligence and Security Committee the new Chair has been named as Chris Grayling, whose record of failings is well documented and whose appointment has dismayed many.
In an interview William Hague, former Tory Leader, has warned Johnson against having an “under powered Cabinet” and not to make it “too centralised with advisors”. Previously this report has mentioned sentiments about a Brexit-Cabinet as opposed to a Governing-Cabinet, these sentiments still manifest daily. Simon Case is not yet managing the Covid messagingsatisfactorily, the PM comments about care homes were badly packaged and compromised him. The administration of government seems to be all over the place, in City Hall Johnson was renowned for being on top of every situation and possible eventuality, this does not appear to be the case at the moment. Sir Edward Lister was Johnson’s right hand man and trusted chief administrator whilst Johnson was Mayor of London, but his efficacity depends on Johnson being in the picture. Some query ifJohnson is being properly briefed on current problems or is he being sheltered from the real world.
Whereas Sunak has journalists eating from the palm of his hand, why in spite of 3,000 press officers across Whitehall do the political media have little positive to report about the Prime Minister’s achievements.
Michael Gove heralded Johnson’s£5billion speech with analogies to FD Roosevelt, and Johnson allowed himself to name his recovery plans a New Deal, a reference to Roosevelt’s reliefs and reforms following the Great Depression.Conservatives are hoping that Johnson can rise to the occasion and save Britain from the brink of economic (Covid) disaster, social (BLM/anti-government) challenges, geopolitical (Huawei-China) provocations and like his heroes Roosevelt and Churchill lay the foundations for the future health, prosperity and stabilityof Britain’s diverse population.