‘The optics are terrible’: how Rishi Sunak’s 2020 ‘eat out to help out’ scheme backfired

The then chancellor’s plan proved to be of no economic benefit and was decried by scientists – but it clearly set out the political aims of ‘Dishy Rishi’

There is no blue heritage plaque above the stainless-steel open kitchen at the branch of Wagamama at London’s Festival Hall – but the restaurant might have claims to one. It was here, in delivering a couple of plates of katsu curry – one chicken, one vegan – on 8 July 2020, that our current prime minister in effect launched his campaign for the country’s leadership.

During that lockdown spring as pandemic chancellor, Rishi Sunak had one of the few enviable public roles: he was cast as the man who saved the economy by giving money away. By the time he pitched up at Wagamama that lunchtime, his various Covid-help schemes had dished out £176bn in furlough payments and loans and deferred taxes. In those efforts Sunak, little known before the crisis, had sometimes looked like the only sober and responsible member of her majesty’s government. The headline act of his summer budget statement, “eat out to help out”, changed that narrative.

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Tax collectors lack ambition, say MPs, as £42bn remains unpaid

Fraud and error have left ‘eye-watering’ amount owed to HMRC, says public accounts committee

The government has been criticised for failing to collect £42bn in unpaid tax from businesses and individuals amid concern over the strain on the public finances as the UK’s economy stands on the brink of recession.

The cross-party Commons public accounts committee (PAC) said that an “eye-watering” amount of tax was owed to HMRC, while also criticising tax collectors for lacking ambition to tackle fraud and error.

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Covid support schemes left ‘open goal’ to fraudsters, says watchdog

Public Accounts Committee report says business department efforts to identify fraud came after trails had ‘long ago gone cold’

The business department’s handling of Covid support schemes left an “open goal” to fraudsters and embezzlers that has added “billions to taxpayer woes”, parliament’s spending watchdog has found.

In its review of the annual report of the Department for Business, Energy and Industrial Strategy (BEIS), the Public Accounts Committee (PAC) said it recognised that the government offered crucial support to businesses at the height of the pandemic.

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Firms handed £1.3bn in Covid contracts claimed £1m in furlough grants

Dozen UK companies given VIP fast-track contracts to supply PPE to NHS paid idled staff at taxpayers’ expense

Companies handed a combined £1.3bn in controversial fast-track Covid contracts with minimal scrutiny also claimed at least £1m in furlough grants, it can be revealed.

Analysis of the accounts of companies that won lucrative emergency contracts to supply personal protective equipment (PPE) to the NHS during the height of the pandemic shows 12 also claimed funds to put staff on furlough at taxpayers’ expense.

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Stella McCartney got pay rise while fashion firm took furlough cash

The designer’s salary rose to £2.7m last year while her company claimed almost £850k in government support

Stella McCartney took a near £2.7m salary from her fashion company last year, up more than £220,000 on the year before, while the business claimed almost £850,000 in support from the government’s furlough scheme.

The designer’s pay went up despite a 26% fall in sales to £28.4m in the year to 31 December 2020, as sales in the UK more than halved, while the company recorded a pre-tax loss of £31.4m, according to accounts for Stella McCartney Limited filed at Companies House. The group made a £33.4m pretax loss the year before.

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Fears for 1 million furloughed staff with Sunak set to finally end scheme

After the success of the chancellors’s £70bn programme, there is uncertainty about the future direction of the economy

The biggest state intervention in the UK’s labour market in peacetime comes to an end this week when the government finally winds up its furlough support.

Barring an unlikely last-minute change of heart, a wage subsidy that has been in place for 18 months and has cost £70bn will no longer be open to struggling firms.

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The end of furlough will lay bare Britain’s twin-speed recovery from Covid

Workers in depressed sectors or regions won’t be able to plug gaps in areas that have been quicker to recover, ministers are being warned

There are signs outside almost every pub, restaurant and hotel dotting Torquay’s harbour: Staff wanted.

“It’s been packed solid busy, you can’t get a table anywhere,” said Brett Powis, owner of three hotels in the area including the Riviera and Lincombe Hall. For the hotelier, staff shortages made it harder to take full advantage of the busiest summertime boom in the Devon resort for decades.

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Ending furlough scheme too early could damage recovery, say trade unions

Government is reducing its contribution to the scheme, with employers having to pay a share

Ending the furlough scheme too early could damage the recovery and push unemployment higher, trade unions warned as official figures showed the number of workers on the scheme in May fell at a slower rate than expected to 2.4 million employees.

Without an extension of furlough or extra support for the hardest-hit industries, the bounce back on economic activity could be choked off, unions said.

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A year of Covid crisis: a glimmer of economic hope at the end of the tunnel

Twelve months after the pandemic struck the Guardian’s economic tracker reveals real risk of lasting damage

When Boris Johnson announced the first stay-at-home order, effectively shutting down whole sections of the economy, it was hoped the tide could be turned within 12 weeks. As many months later, lockdown measures are being relaxed for a third time and Britain still faces a lengthy road to recovery from the worst recession for 300 years.

As restrictions ease, the chief economist at the Bank of England, Andy Haldane, warned that despite the reopening of the economy, the risk of a “jobs equivalent of long Covid” remains for workers across the country.

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The foreign royals and billionaire tax exiles collecting UK’s furlough millions

Read the list of super-rich claimants, from Saudi princes to Dubai monarchs, tax exiles to the UK’s richest

Glympton Park is a sprawling, 2,000-acre estate featuring an 18th-century stately home, nestled in the verdant Oxfordshire countryside near Woodstock.

It was bought for £8m in 1992, by Prince Bandar bin Sultan bin Abdul Aziz al-Saud, the senior Saudi royal whose past roles include ambassador to the US. He is said to have spent £42m on renovations, including a pheasant shoot and bullet-proof glass on the driveway to thwart would-be assassins.

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UK furlough scheme pays out millions to foreign states and tax exiles

Qatari owners of Harrods and the Ritz claimed £3m alongside payouts to Saudi royals and British National party from Covid job support scheme

Billionaire tax exiles, the British National party, Saudi royals and oil-rich Gulf states have claimed millions of pounds in taxpayer-funded furlough money, the Guardian can disclose.

The revelations, based on analysis of government information, have sparked dismay among MPs at the use of a scheme designed to support struggling businesses and prevent mass unemployment, with one complaining of public money being scattered “like confetti”.

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UK budget to extend furlough until end of September

Rishi Sunak will also announce help for an additional 600,000 of the newly self-employed on Wednesday

Rishi Sunak will announce on Wednesday that the Treasury is extending its furlough scheme until the end of September in an attempt to safeguard jobs as a fragile economy emerges from the Covid-19 emergency.

In an unexpected move, the chancellor will say that workers will continue to be guaranteed 80% of their salary for a further three months after the government envisages all restrictions on activity will be removed in June.

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‘Lost generation of unemployed’: Covid hits careers of over-50s

People over 50 who lose their jobs more likely to suffer long-term joblessness than other age groups

Lisa Griffiths, a 61-year-old special needs nanny, has spent her career easily moving from one contract to the next. So when her last, five-year contract ended recently, she was shocked to find new employment opportunities far more limited than she had expected.

Then, while she was considering her options, the pandemic hit and work dried up altogether.

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Temporary, timely and targeted. Furlough has proved to be just one of these

As mark 1 gives way to mark 2, scheme has prevented return to dole queues of 1980s– for now

Temporary, timely and targeted. That was how Rishi Sunak described the government’s strategy for coping with the impact of Covid-19 when he gave his budget speech on 11 March.

Less than two weeks later the UK was in lockdown and the chancellor sought to deliver on his pledge with the Treasury’s job retention scheme, or the furlough as it has become known.

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Sunak’s £12bn scheme for self-employed was ‘terribly targeted’, says analysis

Review finds testing flaws meant support went to many workers who lost no income but not to others who had

Rishi Sunak’s flagship scheme to help the self-employed through the pandemic has handed £1.3bn to workers who saw no loss of income while giving nothing to 500,000 people left without work, new analysis has revealed.

In a sign of major flaws in the £12.7bn self-employment income support scheme (SEISS), more than 400,000 workers were able to claim support despite losing no income in the crisis.

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Covid could overwhelm NHS without more curbs, northern leaders told

Decision expected on whether to extend tier 3 rules to Greater Manchester and Lancashire

Deaths from coronavirus will continue to rise for at least three weeks and the NHS risks being overwhelmed unless the strictest curbs are imposed on another 4 million people, leaders in northern England have been told.

A decision on whether to extend tier 3 restrictions – closing pubs and restaurants and banning household mixing – to Greater Manchester and Lancashire is expected on Thursday.

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Rishi Sunak announces expansion of coronavirus job support scheme – video

Rishi Sunak has said the government will cover two-thirds of workers’ wages at businesses forced to close during new coronavirus lockdowns. The chancellor said the government would subsidise pay by providing grants to companies forced to shut – most likely pubs, bars and restaurants.

Under the expansion, firms whose premises are legally required to shut for a period over winter as part of local or national restrictions can receive grants to pay up to 67% of employees’ salaries

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‘Mr Brexit to Mr U-turn’: German commentators befuddled by Johnson’s zig-zagging

Media criticise PM’s Covid strategy, as UK adopts job support scheme similar to Germany’s own

The UK followed in the footsteps of the German government by adopting a jobs support scheme on Thursday. The announcement came as German commentators spoke of their confusion at the zig-zag approach to tackling the coronavirus, describing a nation caught up in feelings of panic, disbelief and disillusionment.

“Military intervention to control coronavirus rules a possibility,” ran one banner headline in the business daily Handelsblatt this week, while an editorial in the Süddeutsche Zeitung was titled: “Johnson’s skittishness endangers his country.”

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What’s missing from the chancellor’s new scheme to save jobs?

Five measures absent from the chancellor’s winter economy plan

Rishi Sunak’s winter economy plan prioritises additional support for “viable” jobs. However, critics have warned that other measures are still needed to help people who have already lost their jobs or will lose them despite the new government scheme.

Here are five measures that could help keep workers in jobs, but were missing from the chancellor’s winter economy plan:

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Rishi Sunak could do worse than copy Germany

There is evidence that scheme under which Berlin tops up wages of those put on short-time working is effective

It all looked so different for Rishi Sunak three weeks ago. After a bleak early spring in which the economy was sacrificed for health reasons, there were signs that the worst might be over.

Related: Germany’s furlough scheme saves firms from freefall

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