To give him credit, very few holders of high office have ever had to contend with an economic crisis of this magnitude and complexity, and he has not been afraid to wield the cheque book to make sure the country does not plunge into an economic abyss. Yet it is very easy to spend other people’s money; to spend it wisely is another matter – a raft of recent job cuts suggests the furlough scheme, for example, may just prove an expensive sticking plaster that simply postpones an employment crisis, and has been much abused.
We should also not forget that Mr Sunak is number two in a government whose erratic handling of the crisis has arguably magnified the economic turbulence that it faces, and which now seems to be clutching at every last desperate idea to undo the damage. Take the ‘eat out to help out’ scheme, for example, which our regular contributor Neil Wilson succinctly described as the “kind of back-of-fag-packet policy idea dreamt up on the hoof by Ollie Reeder in The Thick of It “. If only that were the end of it. Yesterday, the government announced that it could become compulsory to wear face masks in all retailers from 24 July, a strange decision given that at the peak of the virus in April we could all pop along to Tesco without doing so. The policy will surely heap further troubles on the struggling high street – Jeff Bezos must be rubbing his hands in anticipation.
As we explored last week, there also remains the lingering question of how Mr Sunak intends to pay for his Covid largesse – and today’s news of a review of the capital gains tax system has raised concerns that as well as much-needed simplification this could mark the start of a grab on wealth accumulation to plug the ever-widening deficit. That could spell bad news for investors; capital gains are, after all, the very point of investing, and it is symptomatic of the state we are in to view investment and enterprise as an evil to go after to pick up the tab, when they are undoubtedly the solution to the economic problems we face.
It is also notable just how little consideration has been given to private investors in the crisis response, particularly those whose retirement income has been slashed by dividends cuts, some of which have been mandatorily imposed by government and may not return to former levels any time soon). One 89-year-old reader told me this week that he has lost 40 per cent of his income, and wonders where his bailout is – and I am sure he is not the only pensioner suffering at the thick end of the unintended consequences of a government in chaos.
