Analysis: Sunak's cash injection causes tensions with backbench Tory MPs
8 July 2020, 16:57 | Updated: 8 July 2020, 17:05
Today’s mini-Budget from Rishi Sunak was all about turning on the spending taps to get the economy moving.
Top of the list of the announcements, and unexpected in Westminster, was the promise employers will get a £1,000 bonus if they keep workers on from October, when the furlough scheme comes to an end, until January.
The hope is that the three months will allow bosses to make some money, and avoid redundancies that would have otherwise been inevitable.
If every employer takes up the offer for every employee, it amounts to a £9 billion spending commitment.
And then there was support for the hospitality and tourism sector with a six month cut to VAT from 20% to just 5% on food, accommodation and attractions.
Good news if you want to go visit a seaside town this August for a campsite stay, followed by lunch in a pub, and an arcade game of whack-a-mole.
Restaurants will also further benefit from the Chancellor’s generosity, with his “eat out to help out” scheme during August. If you go out for lunch or dinner, Monday to Wednesday, you’ll get up to £10 off your meal.
But this splurge has its detractors, most notably on the Conservative backbenches where MPs are looking on nervously.
Treasury select committee chairman Mel Stride wanted to know what help was on offer to help bosses who had taken on large amounts of debt to get through the crisis.
Meanwhile, former Chancellor Sajid Javid warned his successor to implement some new fiscal rules to ensure national debt- which stands at nearly £2 trillion and is about to eclipse 100% of GDP - is reduced over the course of this parliament.
Whilst no such promise was forthcoming, it was a clear sign of where – after Brexit - the new tension in the Conservative party is starting to emerge.