One of the stars emerging from the Pandemic crisis must be Rishi Sunak. Both of his major statements have been ground-breaking stuff. Never can a Chancellor have had to undertake such very fundamental changes to try to preserve the Nation’s economic well-being. The Furlough Scheme alone was imaginative, essential, simple and hugely successful. That together with the other financial schemes he brought in have more or less seen us through the immediate emergency.
But there is so much worse news still to come. The economy contracted by a record 25% in March and April, and the depth of the collapse will be the worst ever seen since records began. One would need to look back to the Middle Ages - probably around the Black Death or the 100 Years War to see anything like it. And, of course, it’s not just us- it is absolutely Global.
Against that background, the war against Covid comes in three phases. Stage one was the first 100 days – lockdown; flattening out the curve; preventing the NHS being overwhelmed. There have of course been better bits and worse bits of that; but overall we have pretty much achieved what we set out to do. The second phase - which the Chancellor addressed on Wednesday - is a heroic effort to save jobs. Sadly, we will be facing a big increase in unemployment. Of that we can be certain. But the Chancellor’s new initiatives- with regard to young people, to job retention, to training and apprenticeships, to phasing out Furlough, to support for our pubs and restaurants and so much more that he was able to announce in his Statement will go a long way to limiting the pain, and to preserving the jobs which are so essential if we are to avoid a 1920’s style slump.
That will then lead very naturally into Phase three - rebuilding the economy, which will presumably form the central part of his Autumn Budget and simultaneous Public Spending Review. The hope will be that the deep and damaging collapse in the economy, may at very least be short-lived. It is important that we kick-start the recovery before too much long-term damage is done.
Looking at the fundamentals, I personally believe and hope and pray that that can be achieved. We in this country have the right essentials - the brains, the capability, the banking systems, the service capabilities, the legal systems, the time zone, for our economy to be just as stable and successful as it was before the Pandemic struck. Or to put it another way - we all want the same way of life, the same prosperity, that we had before. And if the demand is there, as it must be, then the supply will assuredly very quickly follow it.
An essential part of that must be confidence – confidence in the financial and business sectors; and consumer confidence that we can and will deliver the economy and prosperity which we all want. We need to be confident that life will get better, and that our jobs are safe. Without that we will be (understandably) fixated with safeguarding what we have got and never get the wider economy going at all. (Great news about half prices in pubs and restaurants over August - I am going to get very fat.)
And Confidence stems, at least in part, from a widespread confidence in the Chancellor of the Exchequer. I believe that Rishi Sunak has secured that confidence.