Rishi Sunak will face his sternest test this week when he stands up in parliament to outline the latest post-coronavirus economic recovery plan. Billed as a major part of the government’s post-Dominic Cummings reboot, the spending review will set out the budget limits for departments across Whitehall over the next financial year.
More than that, the chancellor will be under pressure to show how the government’s “levelling-up” agenda to boost northern towns and cities will translate into actual projects, and what an infrastructure revolution means in practice.
But with the government’s health advisers concerned that an easing of lockdown rules at Christmas will bring further restrictions in the new year, the chancellor must somehow project confidence that his plans will boost jobs and help the economy grow again – and without setting limits that force him into another U-turn.
His last major appearance at the Commons dispatch box, on 5 November, was full of embarrassing climbdowns. Sunak ditched his “winter plan” and increased support for businesses, employees unable to work and self-employed workers, after it became clear that further Covid restrictions would end hopes of a V-shaped recovery.
In a major climbdown, Sunak said the Treasury would extend the furlough scheme to run for a full year by continuing to pay 80% of temporarily laid-off workers’ wages until 31 March. The chancellor also announced an expansion in funding for self-employed workers from November to January, in a speech that contrasted with his insistence in September that it was “fundamentally wrong to hold people in jobs that only exist inside the furlough”.…