April 14, 2021

Has Rishi Sunak done enough to kickstart the economy?

July 08, 2020

Chancellor Rishi Sunak has given his summer economic update to the House of Commons, sharing details on how he plans to boost the struggling UK economy.

Mr Sunak warned that the UK is facing "profound economic challenges" as a result of the coronavirus, so what do Sky News specialists think of his efforts to deal with the crisis ahead?

Ian King, business presenter:

The most welcome measure in this statement, so far as businesses will be concerned, was the VAT reduction on food, accommodation and attractions.

It is something the hospitality sector, which has been battered by COVID-19, had been seeking long before the pandemic. The UK's hospitality sector has, for many years, been begging to receive the favourable tax treatment received by its equivalent in continental Europe.

The danger for Rishi Sunak - as with other giveaways, such as the free school meals scheme unveiled in response to the footballer Marcus Rashford's campaign - is that once these policies are in place, it is difficult to withdraw them. Stand by for howls of anguish in six months' time when Mr Sunak seeks to remove his temporary VAT cut.

More intriguing was the Eat Out to Help Out scheme unveiled by the chancellor. As Mr Sunak accepted, this is something never tried before in this country, so no-one can predict how it will turn out.

Ed Conway, economics editor:

Before considering the detail of what we've heard today, it's worth remembering that we are still only in the middle of a long economic saga. The Treasury wants us to think about today's statement as part two of a three-part drama.

Part one was the emergency measures announced around the time of lockdown: the budget, the furlough scheme, loan guarantees, grants to businesses and so on.

But now the lockdown is being eased it's time for part two: a set of measures to ensure that Britain's economy doesn't simply drop off the cliff edge as all those generous measures are removed.

Add it all up and you're talking about a package worth about £30bn, which, back in the distant days before COVID-19, would have been considered a blockbuster budget. This time it's presented in a parliamentary statement that doesn't even have all the usual attachments (such as Office for Budget Responsibility forecasts and costings).

In practice it might cost significantly less, since the cost of the Job Retention Bonus is only "up to" £9.4bn, and will almost certainly be a lot less, since one assumes a lot of those furloughed jobs aren't coming back. Still, remember: this is only part two.

Part three will come in the autumn: a budget and spending review that will start to answer the chewier questions: what are the permanent changes we need to make to the economy (as opposed to the temporary stuff today) to equip it for life post-COVID? And, chewier still, how do we pay for it?

Lisa Holland, climate change correspondent:

The speech was green - but not a vibrant green, just tinged with green.

The commitment of £3bn for the decarbonisation of Britain's homes and public buildings is important because it shows recognition of an issue which is mission-critical to Britain becoming net zero.

The speech is lift-off towards a green recovery but green investment needs to be a downpayment on year-on-year spending to tackle global warming. Significant funding is needed for transport, nature and the power sector. Other countries have already shown long-term commitment towards a green recovery. We're in a climate emergency and the clock is ticking.

Business leaders are crying out for a recovery to be green, so the door is open.

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