Rishi Sunak is trying to keep up the balancing act but is pleasing nobody

The chancellor announced a limited extension to the furlough scheme, for workers whose businesses are required to close, writes John Rentoul

Rishi Sunak, chancellor, announced a limited extension to the furlough scheme (Getty)

The most popular politician in Britain knows that he will be unpopular one day, a day that he hopes to put off for as long as possible. Today Rishi Sunak, the chancellor, tried to maintain the balance between spending yet more public money that he hasn’t got, and not spending it. 

He announced that the furlough scheme would continue after the end of this month, on less generous terms and in strictly limited cases. Workers will be paid not to work in businesses required to close by the government – pubs and restaurants in large parts of the north of England, probably, although that won’t be announced until next week, plus bowling alleys and nightclubs, which have remained shut throughout the country on government orders. 

But they will get only 67 per cent of their pay instead of 80 per cent, and their employers will still have to pay national insurance and all their fixed overheads. 

Sky News went straight to a restaurant owner in Manchester who called on the government to try the one strategy that hasn’t been tried yet, which is to remove all restrictions and see what happens. 

Meanwhile, Anneliese Dodds, the shadow chancellor, was ready with her instant response, coming indistinctly from the opposite direction, claiming that Sunak “is having to tear up his Winter Economic Plan before the autumn is out”. Sunak had, in fact, tried to pre-empt this criticism by saying he was responding “as the situation evolves”, and it is fair to point out that the seriousness of the situation in the north of England has become evident only in the past few days.

It might have been a better idea not to have called his statement two weeks ago the Winter Economic Plan, but he made clear at the time that there would be more measures to come, depending on the progress of the virus and of the economy. 

Dodds said he had acted too slowly and implied that he should have spent more. “Businesses and families don’t have the luxury of going at Rishi Sunak’s pace,” she said, and, although she is always careful not to call explicitly for more spending, she added: “Even at this late stage, he still has no plan to support sectors that are currently unable to operate at full capacity.” 

Once again, Labour’s response to the government is weakened by the opposition’s failure to say outright that the chancellor should be borrowing more. Dodds tried to accuse Sunak of “chaos and incompetence at the heart of government”, but it doesn’t work against the one part of government that most people think is working reasonably well. 

Keir Starmer can accuse Boris Johnson of incompetence every Wednesday at Prime Minister’s Questions, and he usually gets people nodding along, but Dodds makes no impression with her criticisms of the chancellor. She doesn’t agree with the Manchester restaurateur that the virus should be allowed to do what it will, so the only question is how many restrictions on social mixing the government imposes and what support it provides for those whose livelihoods are adversely affected. 

There was a moment, briefly, last month, when it looked as if the economic impact of the virus might not be as bad as feared, with the economy bouncing back faster than expected. Today’s figures for the economy and the number of coronavirus cases have put an end to that. Sunak knows that more bad news about unemployment and business failures is only going to follow. If he can keep his balance, he may retain enough of the authority and respect he has earned this year to see him through, but he knows that his popularity is a wasting asset. 

At some point, Labour will probably end up saying that he should be borrowing more to get more people back to work. But not today.