Video report by ITV News Economics and Business Editor Joel Hills
The coronavirus vaccine rollout is going superbly well. The government is set to hit the target it set itself of vaccinating the four groups of people who have accounted for the vast majority of hospitalisations and deaths by Monday 15th February.
Last month, in a private call with business leaders, the prime minister said it was “very important” the deadline of mid-February was met.
On the same call, the chancellor said that doing so would “give us an enormous amount of optionality with regard to future restrictions and hopefully we can look forward to opening things up at that point”.
But Rishi Sunak’s message today was far more downbeat. Indeed, he suggested that we may have to live with restrictions for several months to come, despite the success of the vaccine programme.
The chancellor told ITV News that the government will proceed “cautiously and carefully". He admitted there was “some evidence of falling hospitalisations and cases” but agreed with his ministerial colleagues that it’s “too early” to book a summer holiday.
'Too early' to book summer holidays just yet, Rishi Sunak warns
Lockdown is a miserable experience, everyone wants to know when it will end. The government appears to be making a conscious effort to manage expectations down. The prime minister will reveal a “roadmap” back to a more normal life on Monday 22nd February.
It’s remarkable to think that it’s almost a year since the UK went into the first lockdown. The policy decisions Rishi Sunak made in early phase of the crisis have been expensive, but popular and very effective. More recent decisions he has made have attracted strong criticism.
Last August, 78,000 restaurants served-up 160 million meals as part of the chancellor’s Eat Out To Help Out Scheme. During the month, the number of daily infections rose sharply.
Rishi Sunak doesn’t believe his policy caused a spike in transmissions. “I don’t think the data actually bears that out,” he said, and has no regrets about pursuing it.
“[Eat Out To Help Out] was about trying to protect and support 2 million people who work in the hospitality industry,” Sunak insisted. He wouldn’t say if he’s planning to repeat it.
Chancellor says he has no regrets over Eat Out To Help Out scheme
Rishi Sunak is also widely reported to have opposed calls for lockdowns in September and December circuit-breaker, something he doesn’t deny and doesn’t appear to regret.
“I think, at all points throughout this crisis, we’ve taken advice from our scientific and medical advisors,” Sunak said, insisting that the advice from SAGE was more nuanced about the need for lockdowns in the last few months of last year.
“[The scientific advice] was a lot more balanced than that at the time, and you can read that in the minutes,” Sunak said.
“There’s no point being Captain Hindsight about this. We have to use the data available at the moment and I think the important thing to recognise is lockdowns are not costless. Every time we lockdown the economy that has an impact on many people’s lives and livelihoods."
The outbreak and the rapid spread of a second, more infectious strain of the virus - first identified in Kent last September - eventually forced the government’s hand. We have been in lockdown again since 6th January.
According to the latest ONS survey, approximately six million people are currently furloughed. The Job Retention Scheme has helped avoid mass unemployment but it’s due to end in April. Companies want the chancellor to extend it, he’s making no promises.
“We will set out the next phase of our economic support at our Budget in early March,” he said.
The six million families who receive universal credit will also have to wait to find out if they will be £20 a week worse off after April. Given that so many of them are financially vulnerable, I asked the chancellor why he couldn’t make it clear now if the uplift to universal credit will be extended.
“The right thing to do is for us to economic support in the country, in the crisis, throughout the recovery, at a time when we know what the roadmap looks like,” he insisted.
The UK economy contracted by 9.9% in 2020, the largest drop in 300 years. The fall in output was more than twice the size of that experienced during the financial crisis.
Last week, the Bank of England delivered an upbeat assessment of our prospects going forward. By contrast, the chancellor sounded much gloomier.
What happens next will depend on the path of the virus, how quickly the government lifts restrictions and how businesses and households respond when they do. It will also depend on the impact of Brexit.
The economic cost of our departure from the EU’s single market and its customs union are are obvious. Share trading has moved from London to Amsterdam, shellfish companies face bankruptcy. Fisherman, supermarkets and hauliers all say that the impact of the trade deal is worse than they expected it to be.
Rishi Sunak told me that the disruption Brexit has caused is in line with what he expected.
“I think there's always going to be some adjustment,” he said. “We have left the EU, that was always going to mean a change in how we traded. We have put a lot of support in place to help the businesses adapt to that change, that's going to take a little bit of time to adjust, that's happening. If you look at trade flows for example between Britain and northern Ireland there about where they were last year.”