Chancellor Rishi Sunak’s latest statement is the unprecedented on the unprecedented.
In a succession of salvos, he has fired off huge amounts of Treasury financial material in order to stop a full blown health crisis turning
into an economic one.
In the third lot of increasingly ambitious measures, the Chancellor has sought to stop the economic dominoes of business shedding jobs.
Some have already started to do so - cinemas and hospitality businesses for example- as we have reported over the last few days.
The Chancellor hopes that businesses will hold their collective nerve, use the aid supplied and hold on to ride out the storm.
Hopefully business leaders take a deep breath think calmly and will respond appropriately. So much of our collective economic futures will
depend on how they do react in practice.
People have in recent days been seeking a ‘big bazooka’ response.
And this is an unprecedentedly large bazooka that the Chancellor and his Treasury colleagues have fired off. The Chancellor called it “one of
the most comprehensive in the world”.
Millions of workers facing layoffs will have their pay coming from the government for at least three months.
The state paying 80% of wages up to £2,500 a month for employees who would have otherwise been paid off is a hugely ambitious
measure.
It follows the £350 billion package of loans and grants announced just on Tuesday. Businesses have also been told they can defer this
quarter’s VAT bill in what amounts a £30 billion cash injection to help pay wages.
It is an impressive range of measures. The one gap in the response is some more help for the self-employed. So far they have only been given an additional six months to pay income tax due in July. Working out practical measures to do this is difficult, as the Institute of Fiscal Studies has said today.
Hopefully that will be announced shortly and there will be a full set of measures in place to help limit the damage to the economy and make
our emergence from all this easier than it might otherwise have been.
