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Rishi Sunak delivers summer Covid-19 budget, July 2020. Photo: House of Commons via Youtube

Rishi Sunak delivers summer Covid-19 budget, July 2020. Photo: House of Commons via Youtube

Today Rishi Sunak released a budget full of platitudes that make a huge effort to avoid the major economic issues facing society, argues Chris Nineham

Sunak's summer statement was a mix of publicity stunt and panic measure that has ended up pleasing no-one.

Who believes that his meal deal to get people into restaurants is going to have any real impact on the economy? By pledging more on tempting people into restaurants on funding lunches for the poorest children he only illustrated that he's more concerned with the hospitality sector than solving social problems.

His stamp duty cuts for the housing market have been widely criticised for slanting towards the London market and aiding existing home owners rather than first time buyers. The announcement ends the stamp-duty advantage first-time buyers currently have over movers. Once again it's the already prosperous who will benefit. On top of its iniquity, this curious targeting will do little to stimulate much needed house-building. 

Despite the 'jobs jobs jobs' refrain, it's broadly agreed too that his £1,000 per job is not going to entice many employers into holding onto furloughed staff. It will just be a nice little unearned bonus for employers who were planning to re-hire staff anyway. 

The short term extra wages promised to employers are targeted at young workers on the minimum wage. While better than nothing, its impact is likely to be to sustain the low wage, precarious sector with minimal impact on the wider economy.

None of this will protect us from the approaching tsunami of job cuts. The centre-left Resolution foundation put it politely, the jobs measures it said are “too small and temporary to have a lasting effect on employment. The lack of further action on jobs leaves the Chancellor risking high unemployment this autumn.” It went on to say that for all the hype, Sunak's spending spree was modest and mid-range compared to the competition, way below the per capita spending levels in France Germany and even the USA. 

So the Tories' claim to have the interests of working people at heart is looking more threadbare than ever after Sunaks much heralded summer splurge.  

But if Sunak underwhelmed on Wednesday, the government's problems go much deeper. First, there is the question of coronavirus which the chancellor barely mentioned. In its desperation to get things moving the government has eased the lockdown way earlier than most countries, threatening a new surge in the next weeks and months. Even without an uptick in infection, the loosening has been disappointing for business. People have stayed away from shops and even from pubs in droves. Whatever the Tories may like to think the virus has not been dealt with and remains a huge block to their plans to get back to business as usual.   

Second, the chancellor's announcements were met with warnings from former Chancellor Sajid Javid and the Institute of Fiscal Studies that there will need to be 'a reckoning' at some stage and a return to budget discipline. The Financial Times joined the chorus saying 'Sunak can't be Santa Claus forever'. In other words Sunak is already under pressure from important sections of the ruling class to consider cutbacks and tax rises. This is as the jobs cull is just beginning. 

Already derided as incompetent and arrogant, Sunak showed on Wednesday that the Tories don't really have a plan to deal with the impending slump. There is growing pressure for a return to austerity almost unthinkable in the circumstances predicted.

In these circumstances Starmer's 'loyal opposition' is looking more and more ridiculous. If ever there was a time to launch a radical programme to overhaul and democratise the economy it would be now.

Clearly that is an initiative that will have to come from the wider left and the movements. It needs to start with a mass campaign to stop the job cuts and fight back against attempts to use the crisis to drive down wages and conditions.  

Tagged under: Tories Covid19
Chris Nineham

Chris Nineham

Chris Nineham is a founder member of Stop the War and Counterfire, speaking regularly around the country on behalf of both. He is author of The People Versus Tony Blair and Capitalism and Class Consciousness: the ideas of Georg Lukacs.


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