Sunak’s largesse cannot last forever

Given the disastrous impact of local lockdowns upon the economy, the Chancellor had to take action to increase taxpayer support for businesses – and the steps he announced yesterday meet that challenge. But the pain he is compensating for | was caused by Government policy, policy that is only becoming more draconian as winter approaches.

The original furlough scheme ends next Saturday. The Job Support Scheme (JSS) that replaces it was intended to balance better the contributions of government and employer, and to distinguish between jobs that could survive the lockdown measures and those that perhaps could not. Support for businesses that found themselves closed under Tier 3 rules was set much higher than for those still operating in Tier 2 – but, in practice, this has proven deeply unfair. Tier 2 employers have suffered a double blow: still open but with demand in freefall because of the ban on households mixing indoors. With Birmingham and London in Tier 2, and with yet more areas set to follow, the Government needed to adjust.

The Chancellor is now reducing the number of working hours required to qualify for the JSS, and increasing the amount paid by the Government; doubling support for the self-employed; and promising cash grants of up to £2,100 per month for hospitality, accommodation and leisure businesses, backdated to August. All of this shoots Labour’s fox because it was a far more generous package than expected, and Labour is left peddling the ridiculous idea of an England-wide lockdown. On the other hand, the Opposition is quite right to point out that the Chancellor’s original winter support programme did not even make it to the end of autumn, and what replaces it is really just an extension of the old furlough.

In which case, when will it end? Government policy boils down to suppressing the spread of Covid-19 until a vaccine is found. Will the financial support stop if and when said vaccine materialises? What happens if, as suspected, the vaccine does not eradicate the disease – and Covid becomes an endemic virus with which we must “learn to live” (as we have been warned on more than one occasion)? Will the lockdowns continue and, if so, the financial support?

This is not just a matter of economics – although this programme is incredibly expensive and it is surprising that there are not more Conservative voices warning about the cost – but it is a question of quality of life, of what exactly defines the good society. The national clinical director in Scotland, Professor Jason Leitch, has told Scots to prepare for a “digital Christmas” stuck at home, which would not only be calamitous for many businesses but a serious blow to people’s mental health.

At his press conference yesterday, the Prime Minister said that Britain must sail a path between the Scylla and Charybdis of over and underreaction to Covid, characterising those who want to shut everything down as unreasonable, which is fair, and those who question lockdowns as “laissez-faire”, which is not.

At this stage, almost no one is in favour of doing literally nothing; most mainstream sceptics are simply asking whether we can afford these very harsh measures, whether they are necessary and proportionate, and whether they actually work. When Britain has a relatively poor record on handling the coronavirus balanced by a terrible economic performance, critics are entitled to ask “is this a middle way, or is it the worst of both worlds?”

There is an obvious tension within Government between those who favour measures that are as tough as possible and those who argue for keeping as much of society open as possible, not least because of the catastrophic costs of continued restrictions. That debate is largely taking place behind closed doors; the proper place for it is out in the open in Parliament. Britain urgently needs to interrogate the underlying assumptions driving policy.

‘This is not just a matter of economics but it is a question of quality of life, of what defines the good society’