Not everything is as it seems in Rishi Sunak’s mini-budget – beware the small print

Trotting King Rishi out to deliver what was a mini-budget in all but name worked out well for the government – because it diverted some of the attention from Boris Johnson’s cowardly and crass attempt to pin the blame for his government’s failings on care homes.

But it’s nonetheless possible to see this outing as where the starry chancellor saw his crown dented a bit. The stimulus package of up to £30bn he unveiled was reasonably well received but it has some notable holes.

Take the replacement for the Job Retention, or furlough, Scheme, which is currently paying the wages of 9m workers but is being gradually phased out.

No extension was announced, disappointing some. Sunak had a response for them: It has to come to an end eventually and if I’d extended you’d still have said it wasn’t enough. Well, maybe.

He had a replacement ready to counter his critics: A £1,0000 “bonus” for employers for each furloughed member of staff still on their books in the New Year. The problem with that? It applies to any employee furloughed at any point in time.

The cost of the policy won't hit the maximum outlay of £9bn because some of those workers are going to get laid off, and some already have been. But a substantial chunk of what’s going to be spent is going to end up going towards subsidising employers which either have, or were planning to, bring back their staff anyway.

The VAT help for the hospitality industry - it’s being temporarily cut to 5 per cent from 20 per cent - is better. It’s targeted at a sector that’s arguably been hit the hardest. Parts of it could use the support to maintain margins rather than passing the cut on to consumer. They shouldn’t face criticism for doing so if that’s their choice. Given the punch to the face they’ve taken through being closed down for so long, that’s fair enough.

There’s another bonus - of £1000 - for employers who take on new trainees and £2000 for those that hire apprentices. Sunak is a former investment banker, so you can see why he’s keen on the term.

This is well intentioned, but stops short of the guarantees unions have been calling for at a time when hundreds of thousands of young people, who disproportionately work in the worst hit sectors, are getting laid off. Whether the incentives will prove sufficient to get them back on the ladder in numbers remains to be seen.

The well trailed stamp duty holiday on house sales under £500,000 obviously delighted estate agents and the £2bn in grants to “green up” homes was fine, but underwhelming when considered in the light of all the rhetoric about a green economy.

But then Sunak got to the "Eat Out to Help Out" scheme and things started getting silly.

This seems to have been where the talk about handing out £500 vouchers to encourage consumers to spend on the worst hit sectors has ended up: a terms and conditions apply tenner. It’s an offer of 50 per cent off meals and non alcoholic drinks up to a maximum of £10 at participating restaurants on Monday, Tuesday or Wednesday during the month of August. Try saying that in one breath (I did, it isn’t easy).

You do rather wonder whether Sunak didn’t first speak to one of his old City mates working in insurance before he cooked that one up. They’re pretty good with small print.

The biggest economic challenge faced by UK plc is fear. A substantial number of people are understandably reluctant to leave their homes for much beyond essentials because the coronavirus can be deadly, and seriously injurious even when it’s not. It’s something you want to avoid, especially if you happen to be an a high risk group as millions of people are.

Set against that it’s positively surreal that Sunak thinks a highly-conditional tenner off a meal is going to persuade anyone to change their minds.

The government’s largesse, such as it is, is largely going to be lavished on people who were already happy to go out. In that, the policy’s failings are similar to those of the jobs bonus.

Labour’s Annalise Dodds had the right of it as she launched into an impressively forensic picking apart of the mini-budget’s weak points.

The best way to ease some of the fears that stalk UK plc, she said, would be if the government was able to establish a workable test, track and trace system.

The failure to do so is not on Sunak. But he’s dealing with an economic mess its absence is contributing to. He’s said the government stands ready to move in with further measures to support the economy.

Given what he’s outlined so far, it’s a safe bet that he’ll have to do that, and perhaps quite soon.