Rishi Sunak Is Facing A Financial Crisis As A Result Of A Rare Political Blunder.


An unusual strategic error for a governor whose public perception is so highly polished was hobnobbing with tech CEOs in California as the hospitality sector howled in pain at the catastrophic impact of the Omicron variant.

Until Tuesday, the Government had maintained that substantial financial assistance was already available to hard-hit hotel businesses — the VAT decrease for the industry, for example, runs into next spring.

Additional assistance would not be required, according to Downing Street officials, because they were not ordering businesses to close.


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After the furlough scheme was ultimately wound down in the autumn, and as he seeks to repair his reputation for fiscal discipline – something he believes is a significant dividing line with Labour – Sunak was believed to be highly dubious about reopening the bailout taps.

Sunak planned to go back to London by first assuring hospitality businesses that he was listening and will continue to engage with them “in the coming days.”

Without venues closed and a plethora of concerts and concerts cancelled, the opinion at Westminster would be that the chancellor may need to move more quickly than that, announcing an assistance package before the weekend.

He now has to choose between putting up a small-scale, focused rescue plan exclusively for the hospitality industry – or dealing with the catastrophe that many more firms are expected to confront in the coming months as employees fall ill.

He met his rich wife, Akshata Murty, while they were both students at Stanford, and they own a home in California. With his branded hoodies and Palm Angel sliders, one Labour strategist dismisses him as a “want tobe tech dude.”

Sunak as well as the Prime Minister are ideologically opposed to one other. Sunak wants to strengthen enough headroom now to slash taxes in the run-up to the next general election, but Johnson’s impulse is to spend his way out of a political hole. Johnson’s boosterish inclination to overpromise has occasionally irritated Treasury officials.

But, for the time being, Sunak will be forced to invest again, albeit grudgingly, in order to support an economy pummelling yet again by Covid. And he’ll be hoping that voters – as well as enraged backbenchers – will forgive him for being on the wrong side of the Atlantic when the crisis struck.

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