What to make of the Sunak Summer Statement?
There are a number of immediate thoughts. First, never before has so little been held back for announcement to the Commons. Only two real new issues were announced today - and those were the furlough bonus scheme (which is an extension of the scheme in all but name) and the restaurant voucher scheme.
Second, what is staggering is how small the sums involved are. It appears that we have £9 billion extra for what looks like a furlough extension to January; just £1 billion for the unemployed; a subsidy for house prices via stamp duty, £3 billion for green schemes (but that already had been announced in March and if anything seems to have shrunk since then), £4 billion of VAT subsidy for tourism and some small sum for cheap outing out in August.
Third, it seems that once again Sunak has massively underestimated the scale of the issue he is facing. The scale of this is just so small - and even naive. The suggested cost of the furlough bonus scheme presumes no one now furloughed will lose their job, and that is absurd: those jobs are already disappearing.
So what did we get? Some token gestures. And that is it. Literally, all we got here is some wallpaper to keep Sunak going until we get an autumn statement. There was no big idea. There was no evidence of a philosophy behind any of this. And nor was there a clue that there was any real commitment to an industrial policy - indeed, even the green scheme feels like nothing more than a reannounced version of previous plans.
A deep sense of disquiet overwhelmed me as Sunak sat down. I wanted to yell ‘is that it?' The hollowness was what struck me.
So let me offer a contrast. Anneliese Dodds' response was technically very sound. She opposed tax cuts. She discussed SME cash flow issues. She highlighted the real risks. And she made clear there was no plan. Tories will be worried and Labour delighted. But that is the best I can offer from a miserable statement.
The economic gloom in the U.K. will have increased after this dismal performance from Sunak.
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The climate doom in the UK will have increased too.
Today , the European Commission announced its Hydrogen Strategy,. It has bowed to pressure from the oil and gas lobby to include so-called blue hydrogen (from natural gas) as a transition fuel, but the main focus is on co-ordinated action to drive cost reduction in green hydrogen, produced by renewable energy. It envisages the creation of at least 6GW of renewable hydrogen electrolysers by 2024, and another 40GW by 2030. To implement the strategy, it has brought together a European Clean Hydrogen Alliance with the aim of creating €430 billion of investments up to 2030.
We could have been part of this.
Instead, we have Sunak’s £ 3 billion ‘green jobs plan’.
If things carry on as they are, he will have to come back before the Autumn Statement (is that October?). In reality it will have to be a second budget, because the positions taken in March are worthless.
“Up to” £30 billion, and still nowhere near enough.
Agreed
The employment measures amount to offering fully subsidised employment for those aged under 25, for up to 25 hours a week at minimum wage. So, a business can replace one 30 year old full-time member of staff, with 2 people under 25, and get more hours out of those 2 people, for nominal cost. From the perspective of the calculus of fiddling unemployment figures, I can see why encouraging a 2 for 1 exchange is desirable, but it’s not serious policy making in the face of a crisis.
‘The Sunak Ain’t Gonna Shine Anymore’.
I agree – it was woeful.
As Kelton has suggested, it takes imagination to be better than this.
And this lot have none. I thought that all they were offering was cheap labour to firms to tide them over as well as a bit of cash in the pocket to make them feel that they’d got something.
And to say that he had no apologies to make for ending the furlough scheme………………!!!!
I like that line….
Now a blog post….with credit given
You will make PSR’s day! His hour of fame
🙂
Considering £300 billion is already pencilled in for the Covid crisis, a 10% increase in expenditure is chickenfeed for what is needed for an economic recovery from a 25% downturn since March let alone be going anyway near enough to tackle the looming climate disaster. As for support for vital public services such as the care and local goverment sector – not a murmur. Sunak thinks that the gimmick of £10 off a meal in August is enough to have the masses singing his praises to kingdom come………
There are 700,000 school and college leavers this year and the various schemes to help young people into the job market may only cater for 300,000 or so if proper training and facilities even exist to cope with this so, his plans falls flat on its face to start with.
I am of an age where having a haircut seems a very poor idea
And where going away, even self catering, does not seem wise
So why would I take the risk of Covid again (and no one knows how long anti-birdie is last, but I do know it’s not fun) for £10?
Now if it was on a takeaway, that might be another issue…..
[…] everyone is convinced. Left wing political economist Richard Murphy isn’t impressed. His take is that this is tokenistic and not substantial enough to make a different. Tony Wilson […]
The House of Commons has entertained a discussion between the Chancellor and Sajid Javid (ex-Chancellor) in which they agreed that it was important to bring down the Debt. Javid proposed new fiscal rules in the Autumn statement to bring down effectively the Debt/GDP%, by the end of the Parliament. The Chancellor did not demur. Both agreed they were worried about interest rates in the longer term. This is a guaranteed policy to achieve almost nothing in the Autumn statement if that is the intention.
And nobody noticed.
Blogging it now…
I did…
See blog
Thanks
Interesting ideas for jobs for young people, however where I work the only person left on furlough is the trainee, due to the difficulties with training while social distancing and people working from home.
If we get a Covid second wave, which the government seem to be trying for, many if not most of these jobs will instantly disappear.
My thoughts from discussions with informed colleagues suggest that we’re already in a second wave. The first, and milder wave, could actually have occurred in December through to February. Time, and expert analysis, will tell.
Not to mention the warning that this will have to be paid for. More austerity signalling.
Perhaps Sunak is not really in charge and he hopes by Autumn events have strengthened his hand to do more. I see a dilemma for the Tories under Johnson they have gone down a big state route promises to level up the UK, the Covid response and now the impending recession response. Very different from recent years when the received wisdom was small government low taxes and markets allowed to thrive etc. I’ve no doubt some like IDS are keen to escape this dilemma by pursuing traditional Thatcherite policies but the government has set an expectation course that government will be more interventionist going forward. The better the job on Covid recovery and on tackling the recession the more the public will see Big State led solutions are viable after all. Does this strategically neuter a Labour opposition keeping the Tories in power because it’s hard to make the case for more intervention if there is already intervention happening as opposed to it builds the Labour case for more intervention but by Labour? Is Johnson leading the Tories into a socialist trap or eliminating Labour’s key reason for government which is that it should be a moral force for intervention?
Excellent questions…..
One thing for sure is that Covid-wise, we are not out of the woods yet.
The real issue could very well be dangerous disorder because of unemployment and poverty.
This haunts the Tories since Brixton and Toxteth – they know that they are sitting on a powder keg and people do not like to see rioting – it results in a serious challenge to the Tory’s version of the UK when we see public outbreaks of frustration and anger. Remember Michael Heseltine and SRB – the Tories went too far in the early 80’s and then turned all progressive to try to put the fires out.
So, Sunak might very well be hedging his bets and doing all this with his fingers crossed like the hedge fund manager he is, but might have to give more in the future than take away. The more savvy in the Tory Party like Gove will want things like more austerity done at the right moment and Rishi Boy will have to listen.
You cannot reason with viruses; they cannot be bought or bribed with cabinet posts or honours lists. The virus is actually HM Opposition! Starmer is only now beginning to question the Tories competency openly- but look at the way the Tories react – they lie it away, and the BBC leaves the public with the lies on their strapline!!
How are Labour going to fight the next election? You could take your pick of any number of bollocks the Tories have dropped – Covid deaths due to a slow response, PPE problems, the Russian report, the lies about death rates, not heeding medical advice and too quick a return frmo lock down?