Rishi Sunak, the chancellor, has unveiled what is effectively an emergency coronavirus budget, pledging new measures worth up to £30bn that are intended to help protect jobs when the current furlough scheme runs out and the economic crash starts to send unemployment soaring. By any normal standards the sums being spent are staggering, but the crisis has upended economic thinking and Sunak was criticised by the opposition parties for not showing enough ambition. (See 1.40pm and 4.34pm.) Many of the measures had been been written up or speculated about in advance, including a green homes grant (£2bn), a stamp duty cut (£4bn), a VAT cut for the hospitality sector (£4bn) and a kickstart scheme subsidising jobs for the young (£2bn). But there were some surprises. The most talked about may be one that was, at £500m, comparatively cheap - an “Eat Out to Help Out” discount scheme for people eating out in August, from Monday to Wednesdays. But the most significant, and expensive, was the £9bn job retention bonus. In his speech Sunak said the furlough system had to end in October. He explained: Leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before. The job retention bonus will pay firms £1,000 if they retain furloughed staff, provided they are kept on until January. Arguably this might just delay the point at which people are made redundant. But, to coin a phrase, you could see this as flattening the curve. Here is our main story on the summer statement.
Here is a summary of the key points.
Here is a column on it from Martin Kettle, in which he argues that Sunak is “now the most important person in the Conservative government, Boris Johnson included”.
And here is an extract from Martin’s article. The long-term question for Sunak and his party is what kind of economy they are trying to create during this unprecedented time. His statement gave a hint about the need to return to sustainable public finances, but different sides of the Tory party can read different things into that. There was no strategic vision. The idea that there can be no going back to the old economic normal, on which much has been written, was ignored. There was almost nothing said at all about fiscal rules or about tax and borrowing. There was only a quiet admission that many of the jobs that existed before the pandemic have gone for good ... Where Sunak stands on this is not yet clear. He plays his cards close to his chest. By background and inclination he is a Thatcherite small-state, free-market politician. His style and language are centrist. But he was made chancellor by a prime minister who demanded control of economic policy in order to spend more. That’s all from us for tonight. Thanks for the comments.