Rishi Sunak, Britain’s chancellor of the exchequer, delivered another steroidal burst of government spending. As the man writing fat checks at a time of disruption and uncertainty, Sunak has become so popular that it’s now obligatory to include the words “potential future prime minister” whenever his name is mentioned. He enjoys a 92% approval rating among Conservative Party members, which is more what you’d expect in Belarus than in Britain’s rough-and-tumble political world.
He has a pedigree to rival any other front-rank Tory. His platinum-plated CV
includes stops at Oxford University, Stanford and Goldman Sachs. The son of immigrants, he’s married to the daughter of a billionaire. A policy wonk in sharply tailored suits, he also has an encyclopaedic knowledge of Star Wars trivia and is considered a nice guy. He’s exhibited both the right temperament for the moment (unflappable, focused, collegial) and a flair for the fiscal splurge that is unconstrained by his previous hawkish orthodoxies.
“We entered this crisis unencumbered by dogma and we will continue in this spirit,” he said. Yet winning acclaim for chucking cash at anyone who asks for it is the easy part.
At some point, possibly around the time of the autumn budget, people will want to know how he means to pay for his largess. Boris Johnson’s Conservatives can sound almost identical to Keir Starmer’s Labour Party in their determination to protect working people’s interests, but will that remain the case if Sunak wants to hike taxes at some point?
His slew of spending pledges is a bet that the government can put a floor under the economic damage done by the coronavirus, without creating structural deficits that burden future generations or fostering a dependency culture that Conservatives deplore.
Sunak is trying to soothe Tory fears by presenting his blowout as a series of time-limited targeted interventions. Naturally enough, his immediate priority is jobs. Britain’s furlough scheme, which props up 9 million jobs, is due to be wound down from August, when employers will have to shoulder more of the burden. That’s expected to
result in a great shedding of jobs, particularly in sectors such as hospitality and travel.
The “summer economic update” included as much as 30 billion pounds ($38 billion) of new spending, on top of the previous 160 billion pounds of direct support for the Covid-hit economy and 123 billion pounds of subsidised state loans and deferred taxes.