He has only held the post of Chancellor since February, but already Rishi Sunak has made a bigger mark on the UK finances than any of his post-war predecessors.
In the middle of the worst peacetime crisis in living memory, few would say the Chancellor has been wrong to bankroll Britain in a bid to keep the UK economy afloat. But while Sunak has so far kept the unemployment rate from rocketing and seen the UK return to growth after a record recession in spring, the end of the furlough scheme this month and a less generous successor programme have drawn criticism.
So just how effective have the Chancellor’s policies proven to be so far? Here we round up some of the biggest measures Sunak has introduced, and examine how much impact they have had.
Coronavirus Job Retention Scheme
Over 1m businesses have put 9.6m workers on Sunak’s furlough scheme since March, at an estimated cost so far of £52bn. Credited with preventing widespread mass unemployment, the scheme saw the Government pay an initial 80pc of employees’ wages, capped at £2,500. However, critics warn of a spike in jobless claims when the scheme stops at the end of October, while at least 700,000 have lost their jobs so far.
Job Support Scheme
The Job Support Scheme is due to replace the furlough scheme from November, running for six months. However, the Treasury will contribute just 22pc of wages for employees working at least a third of their hours, with employers paying a minimum of 55pc. Critics warn it is open to fraud as companies will self-report employee hours. They also argue that businesses that remain closed - such as those in the arts and sport sectors - will lose out.
Local furlough scheme
In early October Sunak extended the JSS to support businesses closed in local lockdowns, providing a potential lifeline to pubs and restaurants. The scheme will run for six months from November and see the Government pay 67pc of staff wages, up to £2,100 per month, and offer businesses cash grants worth up to £3,000. However, the British Chambers of Commerce said this “will not be enough” to save hundreds of thousands of jobs. And another group claimed the scheme will only help 230,000 workers.
Self-Employment Income Support Scheme (SEISS)
An equivalent of the furlough scheme saw the Government pay 80pc of profits between March and August for self-employed workers. It has been extended twice, but at far lower amounts. Sunak has also faced criticism that the scheme is closed to those with annual profits above £50,000, while there is no support for company directors paid through dividends.
Coronavirus Business Interruption Loan Scheme (CBILS)
The Treasury tried to throw struggling SMEs a lifeline in March with CBILS, which saw the Government underwrite 80pc of loans of up to £5m for small businesses. However, the scheme has been plagued by complaints of a high rejection rate.
Banks blamed EU state aid rules, but even after these changed, the loan approval rate was just 47pc. An equivalent scheme for large businesses (CLBILS) has a 57pc approval rate.
Bounce Back Loan Scheme
By contrast, the Government’s bounce back loan scheme has proved a much bigger success. The scheme allows firms to apply for loans worth up to £50,000 underwritten by the Treasury. As of September, 1.55m SMEs had borrowed £38bn. But the National Audit Office said the scheme’s “hasty” launch leaves taxpayers exposed to fraud and defaults that could cost them up to £26bn.
The Future Fund launched in May to help start-ups fearing their lack of profits would bar them from other Covid loan options. So far 711 start-ups have borrowed £720m in convertible loans, but unless paid off, these could convert into stakes in the companies.
Some airlines have landed huge bailouts through the Government’s Covid Corporate Financing Facility. British Airways has secured £300m and easyJet and Ryanair have each raised £600m. However, BA has axed more than 10,000 job cuts while Easyjet has said a third of staff could go, despite the huge influx of public cash.
The Government killed off the rail franchising system over the pandemic after coronavirus led to a huge slump in passenger numbers. Since then the Treasury has introduced emergency contracts that have cost it a reported £3.5bn. Labour has said these contracts “paper over the cracks” of the old model.
Arts and entertainment
In July the Government announced a £1.57bn arts fund intended to funnel emergency cash to cinemas, museums and galleries. But theatres have begged for more help as 32pc of the arts and entertainment industry remained furloughed in September.
Business rates relief
The Government paused business rates for retailers this year, but firms have warned of an impending £8bn bill as it has not been extended beyond April 2021. Tesco caused controversy by benefiting to the tune of £249m from the scheme, only to reveal a 30pc hike in half-year profit.
Sunak also slashed hospitality VAT from 20pc to 5pc between July 15 and January 12, calling it a “£4bn catalyst” for the sector. Despite these measures, the Centre for Retail Research warned job losses in the sector have so far exceeded 125,000.
Eat Out to Help Out
Sunak’s much-trumpeted Eat Out to Help Out programme - offering diners £10 off meals through August - saw 100m meals claimed on the scheme, but at a cost of £522m. That helped the accommodation and food sector contribute 60pc of August's GDP growth. But the economy's 2.1pc expansion that month was just a third of July's growth.
UKHospitality has welcomed the Government’s help for the sector but repeated its call for a “much more comprehensive package” to cover rent and overheads over winter.