Rishi Sunak’s furlough 2.0 is an ominous sign that events are outside the government’s control

Editorial: The second wave is happening quicker than ministers expected – and we are not prepared for a bleak winter

Rishi Sunak has announced that he will extend the furlough scheme (PA)

After repeatedly insisting he would not extend his furlough scheme, Rishi Sunak has now done just that. Two weeks after announcing that a less generous Job Support Scheme would replace the furlough programme on 1 November, the chancellor has rightly bowed to pressure to help businesses and protect jobs in the growing number of coronavirus hotspots.

On Monday, the government is expected to announce further restrictions in the northeast and northwest involving the closure of pubs and restaurants. Mr Sunak said these would be decided “collectively” with local leaders over the weekend. But that looks suspiciously like a consultation exercise after the key decisions have already been taken by a government wedded to “command and control”. Local politicians such as Andy Burnham, the mayor of Greater Manchester, are entitled to feel aggrieved they were not consulted before the latest restriction plans surfaced in Thursday’s newspapers.

Ministers are also likely to simplify the confusing patchwork of rules, which even Boris Johnson was unable to explain in media interviews. Streamlining the regulations by creating a three-tier system based on local infection rates is long overdue. Hopefully, the move will encourage and enable more people to stick to the rules.

The furlough 2.0 will help businesses forced to close their operations. But the wage support, at two-thirds of each worker’s salary up to £2,100 a month, is less generous than the 80 per cent subsidy, to a maximum £2,500 a month, in the furlough scheme announced in April. Although Treasury sources say this will cost hundreds of millions of pounds a month, it is a pity that Mr Sunak felt unable to maintain the 80 per cent figure. People unable to work because the government has shut down their employer, will not face lower living costs than they did in April; they now face an effective 33 per cent pay cut.

The chancellor should consider providing more help for the self-employed who have fallen between the cracks of his existing measures, and for people forced to work short time. Employers may understandably be reluctant to take advantage of Mr Sunak’s Job Support Scheme, announced on 24 September, requiring them to pay 55 per cent of the wages of someone working 33 per cent of their normal hours.

Mr Sunak has rightly increased the cash grants to businesses in England shut in local lockdowns, from up to £1,500 every three weeks to up to £3,000 per month payable every two weeks, which will help pubs, restaurants, nightclubs and bowling alleys. But he was wrong to order employers to cover the national insurance and pension contributions that will be incurred on about half of the local furlough claims.

In his speech to the Conservatives’ virtual conference this week, Mr Sunak argued that his party had a “sacred responsibility” to future generations to balance the nation’s books in the medium term. That daunting task will be made even harder by his latest attempt to limit the scale of the jobs crisis. Friday’s worse-than-expected figures showed the economy grew by 2.1 per cent in August, largely on the back of that month’s Eat Out To Help Out scheme. With further restrictions on the hospitality sector now inevitable in parts of the country, a much-needed recovery is clearly losing steam.

Mr Sunak deserves credit for being flexible enough to react to fast-changing developments. But his decision to extend his “Winter Economy Plan” only a fortnight after unveiling it is an ominous sign that events are outside the government’s control. The second wave is happening quicker than ministers expected. Worryingly, they have not used the relative calm of the summer months to improve the failing test and trace system and adequately prepare the UK for what increasingly looks like being a bleak winter.