A friend with impeccable left credentials even tweeted: “Rishi Sunak – probably the most socialist Chancellor ever seen in Britain. Extraordinary.” To which I cautioned: “Don’t get carried away, just yet”.
The problem is that grand announcements must be translated into real actions and that needs watching – particularly where the banks are concerned.
Centre-piece of Mr Sunak’s first statement was a Business Interruption Loans scheme with banks lending from £25,000 to £5 million to help companies survive. So far, so good.
It emerges, however, that some banks are demanding personal guarantees though Government is underwriting 80 per cent of the loans. Ministers had said personal guarantees would not be required. That intention must now be enforced – which means telling them what to do, rather than asking nicely.
On another front, the big banks must soon decide whether to pay billions in dividends to shareholders. The government has asked them not to but other pressures are doubtless at work.
The banks are currently well able to withstand the crisis. But how long will it last? If they had to come back to the Treasury to be bailed out as in 2008, having distributed billions to shareholders in the meantime, might that finally incite the mob to take to the streets (metaphorically speaking)?
The Chancellor’s popularity is riding high but to maintain cult status, he really must keep an eye on the banks.
As a banker, he should know that.