When Rishi Sunak, Britain’s chancellor, stood up to deliver his first budget in March he promised “change in our economy, change in our public services, change in the cost of living, change in our economic geography”. The coronavirus that has since spread throughout the UK will, no doubt, alter all those facets of British life. As he formulates policy to support the recovery, Mr Sunak has a chance to ensure that the damage it does is kept to the minimum and the opportunities it presents for positive change are seized.
So far Mr Sunak has had a good crisis. The chancellor remains the most popular minister in a government that has lost public support over its handling of the coronavirus. While it is easy to be liked when you spend money, the chancellor deserves genuine credit for how quickly the Treasury has ditched previous orthodoxies and instituted grants for small businesses and, from a standing start, developed a system of wage subsidies to contain a rise in unemployment. The co-ordinated action between the Bank of England and the Treasury has also marked out the macroeconomic response to the pandemic from the disjointed response to the public health emergency.
Mr Sunak must use his forthcoming fiscal statement scheduled for late June or early July to spend even more. The decision to cautiously moderate the lockdown to get the economy going again is the right one and an active debate is taking place in Whitehall over how to kick-start this process. Boris Johnson, prime minister, is pushing for early spending and tax cuts to revive the economy while the Treasury wants a smaller package of infrastructure announcements before a full Budget in the autumn.