LUNCH IS ON RISHI! ( but we’ll ALL have to pick up the tab)
Covid budget serves up £30bn feast of freebies ++ Half price meals out for all ++ VAT and stamp duty slashed ++ £1,000 sweeteners to save jobs
RISHI Sunak dished up £30billion of treats yesterday as he slashed VAT, cut stamp duty and subsidised meals out.
in a break from Tory orthodoxy, the Chancellor gambled on a massive cash injection to get families spending again and to head off a huge wave of unemployment. He admitted that ‘hardship’ lay ahead for many but vowed ‘no one will be left without hope’.
in his mini-budget, he scrapped stamp duty on 90 per cent of home
sales until April; cut VAT to just 5 per cent on hospitality and holidays; and unveiled an extraordinary discount scheme to encourage families to dine out.
Mr Sunak also released major investment to protect jobs directly, including a pledge to pay employers £1,000 for every one of the 9.4million furloughed workers they keep on. ‘Our message to business is clear,’ he declared. ‘If you stand by your workers, we will stand by you.’
The package came as the Treasury revealed coronavirus could cost the public purse more than £300billion. It has paid out £158.7billion since the crisis began, with another £30billion spent yesterday plus more than £120billion in loans and tax deferrals.
Treasury documents reveal £15billion has been spent on personal protective equipment for front-line health workers – equal to the annual budget of the Home Office. A further £10billion has been spent
‘We will stand by you’
on testing and tracing and £1billion on ventilators.
The Institute for Fiscal Studies warned that the UK was on course for a deficit of well over £300billion this year – double the level seen after the 2008 financial crash.
Mr Sunak said public finances had to be put on a ‘sustainable footing’ in the medium term but gave no clue as to how. In other developments:
■ Boris Johnson prepared to announce the reopening of gyms in the latest round of ‘unlocking’ today;
■ Families were encouraged to take part in an ‘Eat Out to Help Out’ scheme that will offer half-price vouchers worth up to £10 each for restaurant meals in August;
■ The discount applies to fastfood outlets – much to the fury of health campaigners;
■ A ‘ Kickstart’ scheme will pay firms to take on 300,000 young workers for six-month placements;
■ Homeowners will be offered grants of up to £10,000 to insulate their homes in a £2billion ‘green’ scheme to create 100,000 jobs;
■ The threshold for paying stamp duty was raised from £125,000 to £500,000 until the end of March, saving homebuyers an average of £4,500;
■ The Treasury ditched plans to give £500 vouchers to everyone, dealing a blow to high street retailers;
■ Mr Johnson refused to apolfall ogise for comments in which he appeared to suggest care homes were to blame for many deaths – but insisted he took ‘ full responsibility’ for the handling of the crisis;
■ Downing Street faced a backlash over plans to reinstate hospital parking charges for doctors and nurses when the pandemic is over.
Yesterday’s package was designed to stem a tide of redundancies – ministers have been warned that unemployment could top four million.
The Chancellor described this as ‘the most urgent challenge we face’, adding: ‘I will never accept unemployment as an inevitable outcome.’
He said the furlough scheme had protected millions of jobs that would have been lost under lockdown.
But he confirmed it would end in October, saying that prolonging it any further would give false hope.
Employers will be paid £1,000 for each furloughed worker still employed in January, provided minimum pay levels are met. There was no additional help for the self-employed.
The hospitality sector will benefit from a massive temporary cut in VAT, which will from 20 per cent to just 5 until January.
Restaurateur Luke Johnson said: ‘These are extraordinary announcements for a government to be making ... every bit is helpful.’
Labour said the plans did not go far enough, a spokesman adding: ‘We were promised a New Deal, but what we got was a Meal Deal.’
Former chancellor Sajid Javid said Mr Sunak was right to spend ‘whatever it takes’ now but issued a warning over Britain’s debts.
‘Interest rates will not stay low forever and we will eventually need to bring our national debt back under control in order to sustain recovery, continue to create jobs and keep taxes low,’ he said.
IS there no end to Rishi Sunak’s largesse?
He’s offering your employer a cash bonus to keep you in work after furlough. If you’re young he’ll find you an apprenticeship and pay your wages. If you’re in the leisure or hospitality business, he’ll cut your VAT by a whopping 75 per cent.
He’ll give you a grant to insulate and ‘green up’ your home, make it cheaper to move by slashing stamp duty and even treat you to half the cost of a family meal out.
The Chancellor didn’t say anything about the tip, but given his munificent mood yesterday, it would have been no surprise if he’d offered to cover that too.
This was supercharged Sunak, the man with a plan to get Britain moving again. A plan to renew, replenish and rescue an economy battered by the Covid storm.
Yes, it’s an expensive (£30billion for yesterday’s pledges alone), Keynesian, almost socialistic solution and will have to be funded by even more borrowing.
But in these truly desperate times, desperate measures are required.
With his trademark positivity and engaging manner, Mr Sunak was seeking to shift Britain’s dial, from a country cowering in the shadow of coronavirus to one with the confidence to start working and spending again. It was bold. It was imaginative. It was comprehensive.
So will it work? Or, after finishing our subsidised lunch, will we suffer a bout of severe and lasting dyspepsia.
The Chancellor made no bones about the predicament we’re in. In just two months our economy shrank by 25 per cent, equivalent to losing the growth of the last 18 years.
People need to know there’s hardship ahead, he said.
A study by the Organisation for Economic Co-operation and Development suggests that unemployment could treble to 11.7 per cent by next year – putting another two million on the dole.
The cost in soaring benefits payments and plunging tax receipts alone is scary enough. And that’s without the threat of mass disillusionment, violent protest and social breakdown.
This is why Mr Sunak is willing to pay such a high price to keep Britain on the rails. ‘I will never accept unemployment as an unavoidable outcome,’ he said. ‘No one will be left without hope.’
There are caveats. He must ensure that the apprenticeships provide training for real jobs and that unscrupulous employers don’t use his ‘kickstart’ scheme as a source of cheap temporary labour.
He must be true to his pledge to ‘double down on levelling up’ by making sure less prosperous parts of the North and Midlands receive their fair share of the £3billion green jobs ‘revolution’ and extra capital funding for infrastructure projects.
But no one can accuse the Chancellor of lacking ambition. This is a credible blueprint for recovery and for that Mr Sunak is to be congratulated.
Recent polls showed he was already the most popular minister in the Government. This bravura performance will surely have enhanced his standing still further.
He’s played his part. Now it’s up to the working population of Britain to rise to the challenge.
Although infection rates are tumbling by the day, Covid-19 is still with us and will remain for some time to come – perhaps indefinitely.
But the diminishing and now manageable risk from the virus must be balanced against the greater risk of mass unemployment and a crippling economic slump.
Hiding away for much longer will do incalculable damage, both to our collective prosperity and to the health of the nation.
Mr Sunak has issued a call to arms. We must respond to it and show the world Britain is open for business again.