London There seems to be no remedy for the corona crisis. The British Treasury Secretary Rishi Sunak is feeling this these days. For the third time in a very short time, he had to promise new government aid on Friday. For the first time in history, the British government will pay wages for workers, the finance minister announced late Friday afternoon.
Once again it was a matter of gigantic sums of money: for every employee who is on leave instead of being laid off, the government wants to take on 80 percent of the wages up to £ 2,500 a month. The offer is initially valid for three months, but will be extended if necessary, said Sunak. “There is no upper limit”.
Value added tax will also be suspended in the second quarter. That gives companies more than £ 30 billion in cash, the finance minister said. A further £ 70 billion is expected to flow into the social system to improve the safety net for redundant workers. This is to be financed through new debts.
It is “an unprecedented intervention” by the British state, said Sunak. He urged the companies not to fire any employees because of the crisis. “The government is doing your best to stand behind you. Please stand behind your employees. “
The 39-year-old finance minister is increasingly becoming the star of British crisis management. At the joint press conferences, he always appears as the sidekick of Prime Minister Boris Johnson. He stands next to the head of government and waits until he is given the floor. But the young assistant is moving more and more into the center. While Johnson triggers mixed reactions with his unclear announcements, the Treasury Secretary is unanimously praised. Political observers are already making comparisons with the young Tony Blair.
Aggressive action by the Bank of England
Sunak started the spending series nine days ago with his budget speech. At the time, he promised £ 5bn for the NHS, and £ 7bn in aid to businesses and workers. At the same time, he emphasized for the first time that you would do everything necessary, “whatever it takes”.
Not a week later he had to reload because the markets hadn’t calmed down. On Tuesday, he announced a £ 330bn package of aid and loans to ensure companies’ cash flow.
On Friday, he made further promises to secure jobs. This is necessary because a wave of layoffs threatens after the government has ordered all pubs, cafes, restaurants, gyms and cinemas to be closed.
Sunak’s fiscal stimulus is flanked by aggressive action by the Bank of England. The UK central bank has cut key interest rates twice, promised companies unlimited access to credit, and announced £ 200bn in government bonds. You work closely with the central bank, said Sunak. In particular, the bond purchase is crucial to enable its interventions.
Sunak’s rise is meteoric. The former Secretary of State for Finance had moved to the ministerial post just over a month ago because his boss Sajid Javid resigned after an argument with Johnson. He started his career after studying in Oxford and Stanford with the US investment bank Goldman Sachs. He then switched to the world of hedge funds, including working for Christopher Hohn’s Childrens Investment Fund. He has been in parliament since 2015 and has only been in the government for a few months.
The former finance manager quickly found his new ministerial role. He is considered an eater and detail-oriented. His appearance still looks a bit wooden, but he’s more statesmanlike than Johnson. On Friday, he underlined his claim to something higher. “We are starting a national effort to save jobs,” he said. “When this is over, we want to look back and remember the many acts of kindness.”
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