Good morning. I’m Lucy Campbell, here to steer you through the latest developments in UK politics and all things coronavirus as the morning unfolds.
Leading the front pages this morning is the “eat out to help out” aspect of the chancellor’s £30bn emergency support package to protect against a coronavirus recession and mass youth unemployment. His summer statement – or mini budget – that he delivered on Wednesday, was packed with giveaways to tempt consumers out of their Covid-19 hibernation and to nurse the country through the pandemic.
Among the freebies, Rishi Sunak pledged £300m to subsidise food, including discounted dining, with VAT reduced from 20% to 5% in the tourism and hospitality sectors, as well as a stamp duty holiday, raising the threshold in England and Northern Ireland to £500,000.
However, while offering relief in the short-term, the papers also point out that we will ultimately all have to pay for these giveaways. The Times (paywall) has worked out that public spending has soared to £189bn to get the economy through the crisis – more than we currently spend on the NHS. Meanwhile, the FT (paywall) has calculated that borrowing of £350bn will be needed this year to pay for everything – pushing the deficit to twice the size it was after 2008 – and that Sunak ultimately faces the challenge of stabilising the public finances when all this is over. “Mr Sunak will not be able to play Santa Claus forever,” an analysis piece reads.
The chancellor is due to have his sums marked by economic experts as they prepare to go over his plans to boost the economy after coronavirus with a fine tooth comb. We expect the IFS’s analysis at 9:30am.
We also expect that more elements of the UK’s economy could be given the green light to reopen.
Please feel free to get in touch with me throughout the morning as I work. Your thoughts, comments and news tips are always welcome!
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Twitter: @lucy_campbell_
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