Five things we learned from Chancellor Rishi Sunak’s 'mini-Budget'
Chancellor Rishi Sunak has unveiled his £30 billion "mini-budget" to kickstart the economy and protect jobs in what he said was a plan designed to get the country through the economic crisis triggered by the Covid-19 pandemic.
Numerous investments were announced from a cut to stamp duty and cheaper meals out.
Here’s what we learned:
The scale of the economic hit could potentially be very large indeed
The chancellor said the economy had shrunk by 25% in two months as a result of the lockdown – the same amount it grew in the previous 18 years.
The Office for Budget Responsibility and the Bank of England have both warned of “significant job losses” as a result.
The cost of measures to protect jobs and businesses could rise to £30 billion
Up to £9.4 billion is available to pay firms £1,000 bonuses for each furloughed worker kept on.
Some £3.7 billion is available for the “kickstart” scheme for 16 to 24-year-olds and measures to boost skills and apprenticeships.
Under this plan, the government will directly pay employers to create “decent” new jobs for any 16 to 24-year-old at risk of long-term unemployment.
Mr Sunak said employers will need to provide training and support to find a permanent job and in return the government will pay the young people’s wages for six months.
The cost of slashing VAT from 20% to 5% from July 15 to January 12 on food, accommodation and attractions could be £4.1 billion, while up to £500 million is available under the “eat out to help out” scheme, offering diners a discount in August.
Infrastructure spending announced by Boris Johnson last month adds £5.6 billion, while green measures add £3.1 billion.
The temporary stamp duty cut in England and Northern Ireland could cost the Exchequer £3.8 billion.
Despite all the spending pledges, Mr Sunak did not announce any new revenue raising measures.
So the new spending will add to the amount the government has been borrowing during the pandemic.
And pressure is likely to mount on the chancellor to set out how it is all going to be paid for in his next big set piece – the Autumn statement.
Mr Sunak will not let a good crisis go to waste
The Chancellor said the government’s response is a question of “values” not just economics, telling MPs: “It is an unambiguous choice to make this moment meaningful for our country in a way that transcends the frustration and loss of recent months.
“It is a plan to turn our national recovery into millions of stories of personal renewal.”
The chancellor is a bigger draw than the Prime Minister
It may be due to the scale of the economic crisis, or a reflection on Mr Sunak’s rising status, but the Commons was as packed as social distancing rules allowed.
It was the best-attended event in the Chamber since the lockdown began, with a number of MPs using the galleries above the green benches to be able to hear directly from the chancellor.
People are being encouraged to eat out, despite the Prime Minister’s drive to get the nation fit
In August, meals eaten at any participating business from Monday to Wednesday will be 50% off, up to a maximum discount of £10 per head for everyone, including children.
Mr Johnson has said the UK is “significantly fatter” than most other European countries and “we will be happier and fitter and more resistant to diseases like Covid if we can tackle obesity”.