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18 March 2020

Why the coronavirus emergency powers bill is the government’s most important announcement

The Chancellor will have the freedom to increase funding at will to tackle the disease. 

By Stephen Bush

Rishi Sunak has boosted the government’s measures to support businesses through the Covid-19 outbreak to the tune of £330bn, but households, particularly renters and the self-employed, are still waiting on clarity as to what exactly the government will do for them. 

As I wrote after the Budget, I think Sunak is right to utilise existing benefit schemes rather than trying to create new ones – the reality is that by ripping out conditionality and increasing the generosity of Universal Credit and statutory sick pay, you have a benefit that can do everything policymakers need to give households the security to work from home, do without work that will not be done, or take time off and self-isolate. 

It’s also the right call to consult with trades unions, who are the experts here, on what level of provision is required. But it’s hard to fully assess the effectiveness of the measures that Sunak has unveiled for business until we see the exact scope of what is done for households – as the bulk of the support for businesses will flow towards support for workers.

The most important announcement Sunak made yesterday wasn’t any one fiscal measure but the statement that the emergency powers bill will include a clause allowing the Chancellor to introduce and increase funding to tackle Covid-19 measures at will. He will spend a lot, lot more before this crisis is over. 

Speaking of emergency powers…the details of that bill, which transfers a swathe of powers into the hands of the United Kingdom’s four governments, have been published and it gives huge and sweeping powers to the national and devolved governments to tackle the crisis. 

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The implicit logic of much of what our government is doing – not least ripping away the planning hurdles in England that mean restaurants can now offer takeaway services at will – is that social distancing will continue for a long period of time. That means putting parts of our economy in cryogenic suspension but also facilitating the transition to new ways of working and living. Tha, however, also means that these powers may end up enduring for longer – and a way has to be found to balance the public health challenge with our enduring democratic health.