Will Rishi Sunak replace Boris? – Ian Swanson

Chancellor Rishi Sunak’s mini-budget needs to result in more support for firms worst hit by Covid crisis if he’s to add to his growing reputation, writes Ian Swanson

Will Rishi Sunak pass this key test of his leadership abilities, wonders Ian Swanson (Picture: Jeff Overs/BBC/PA Wire)

RISHI Sunak was widely praised at the start of the Covid crisis when he announced a furlough scheme to pay people’s wages while they couldn’t work because of coronavirus.

There was also a raft of other financial support for businesses and the self-employed to help them weather the lockdown.

It all added up to bold action from a Chancellor who had only been in the job a few weeks but recognised that state intervention was essential to prevent mass redundancies and wholesale commercial collapse.

Tomorrow Mr Sunak will deliver a “summer economic update”, in effect a mini-budget, which will set out the UK Government’s plans to help the gradual recovery.

The furlough scheme – which has paid the wages of over nine million workers at a cost of more than £20 billion – is already set to be phased out from next month, when employers will have to start paying the national insurance and pension contributions of furloughed staff, and is due to be wound up completely at the end of October.

Everyone accepts it could not go on for ever. But Labour and the SNP are both calling for furlough to be extended for those sectors which are particularly badly hit by the lockdown.

In Edinburgh, that means tourism and hospitality businesses, many of whom rely on the summer surge in custom to carry them through the year and now face a 12-month wait for their next boost. Physical distancing rules and uncertain consumer confidence make it difficult for them to resume profitable trading.

And some of these businesses – restaurants especially – have missed out on any other help from Mr Sunak since they fail to qualify for the Retail, Hospitality and Leisure Grant because their city-centre location means their rateable value is above the £51,000 maximum.

The Evening News raised the plight of the Capital’s tourism and hospitality sector at the Downing Street press briefing on May 21 and asked if the Government would continue the furlough scheme for these businesses or provide some new form of support. Health Secretary Matt Hancock, who was giving the briefing, promised to raise the issue with the Chancellor. We have asked for an update, but so far have received no response.

Tourism Secretary Fergus Ewing told MSPs last month that if the end of the furlough scheme results in large-scale redundancies, “all the money that will have been invested up to October will arguably have been wasted”.

And Finance Secretary Kate Forbes has written to Mr Sunak calling for an £80 billion package to revive the UK economy, including a temporary cut in VAT from 20 to 15 per cent but also a permanent new five per cent rate for the hospitality sector.

The importance of tourism and hospitality to Edinburgh’s economy cannot be exaggerated and just now it needs all the help it can get.

When Mr Sunak was appointed – after his predecessor Sajid Javid fell out with Boris Johnson over being told he could no longer have his own special adviser – some commentators suggested he could turn out to be a prime ministerial puppet.

But during the crisis he has come across so much better than Mr Johnson that he is now talked of as a likely successor when the time comes.

The announcements he makes tomorrow will be a crucial test for the Chancellor.

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