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We called this morning for the Government to stand behind the British economy in a manner unique in modern times – arguably in this country’s entire history.

That means working with employers and unions, in a manner not seen for some 50 years, to fund employers and workers directly.  Which will also entail special arrangements for the 15 per cent or so of the latter who are self-employed.

That implies the suspension of mortgages, rents, council tax and household bills; of business rates across all sectors; of a bigger hardship fund, and an income tax cut at the standard rate, because it makes no sense for the state to be giving with one hand and taking with the other.

Such a package is in our view “whatever it takes”: resuscitation for an economic heart seizure.

However, Rishi Sunak does not have the luxury of being able to implement ideals at once.  He must act in real time with imperfect powers: if he announces emergency relief schemes, for example, the infrastructure won’t be in place to get them up and running immediatedly; the manpower, the computer systems, the phone lines, the publicity.

Our reading of his statement is that the most important section of it is his commitment “in the coming days…[to] work with trade unions and business groups to urgently develop new forms of employment support to help protect people’s jobs and incomes through this period”.

That sounds a lot like further direct help to come in the form of grants.  It was not correct, as the BBC’s initial reporting claimed this evening, that the Chancellor’s latest package consists entirely of loans.  He is extending a business rates holiday.  He is increasing grants to 700,000 of the smallest businesses.

And the Government has persuaded mortgage lenders to offer a three month payment holiday.  Sunak and Boris Johnson also claimed that they have persuaded the insurance industry, which was digging in its heels over making payments, to move – and pay up.

It is significant that the Chancellor also said that there will be “a new legal power in the Covid Bill to offer whatever further financial support I decide is necessary”.  That seems to us to pave the way for the kind of Big State Government action that, in these upside-down times, is necessary and urgent on a previously unimaginable scale.

None the less, the biggest bazooka in Sunak’s armoury was the more than doubling of his Coronavirus Business Interruption Loan Scheme.  This offered loans of up to £1.2 million when he first announced it in the Budget – how long ago that seems now – and he is now upping that figure to £5 million.

The Chancellor argues that what firms most need is immediate help with paying rent, salaries and suppliers.  That is surely correct.  The question is whether business, the markets and workers fix their gaze on this loan scheme centrepiece or on the Sunak’s evident intent to go further very soon.

If they concentrate their attention on the former, and on the gaps in the Chancellor’s statement, this package will fail to reassure.  What about renters, it’s being asked?  Or firms not eligible for the Business Rates holiday?  The self-employed?  Recipients of Universal Credit – designed, remember, partly as a support payment for workers?

£330 billion of guarantees is a humunguous figure – well over a third of public spending as a whole.

But again a question arises of what that statistic looks like broken down into grants and loans.  It may be irrational for firms or people to gripe about the latter when they are being made available on this sweeping scale.  And it will also be the case that many are bound to be very soft.

None the less, Sunak, as he well knows, will be back at the press conference podium and the Commons despatch box in days rather than weeks with new announcements, in the wake of the discussions with employers and unions for which we called today, and which he will now undertake

It is weird to write that a package of some third of public spending is no more than a solid second step for the Chancellor, but there it is.  He as, as Cameroon modernisers used to like to say, “on a journey”.

130 comments for: The Chancellor’s statement. A firm second step – but he must go further to deliver “whatever it takes”.

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