Economic Update

Steve Baker Excerpts

Wednesday 8th July 2020 Commons Chamber

[Rishi Sunak]

The hon. Gentleman talks about seasonal businesses and whether they have or have not had support; he may have missed the fact that we have just cut VAT for those sectors from 20% to 5% for the next six months, and we have just provided an “eat out to help out” discount for the country to enjoy discounted meals to protect those businesses and protect the employment in them. That is probably the best thing we can do for seasonal businesses.

[Mr Steve Baker (Wycombe) (Con)]

With his plan for jobs, my right hon. Friend has, like Roosevelt, given a masterclass in economic interventionism, but it is quite expensive. Can he reassure me that he has a contingency in case the independent Bank of England needs to change its stance on monetary policy because inflation begins to rise?

[Rishi Sunak]

As ever, my hon. Friend is right to remind us about the importance of monetary economics, and he is also right to focus on the long-term sustainability of our public finances. Although in the short term it is right to act in this way to prevent long-term damage and scarring to our economy that would create an ongoing, larger structural deficit, once we get through this crisis we must retain and sustain public finances. We will return them to a position of sustainability over the medium term, I assure my hon. Friend of that, but in the short term I am confident that this is the right thing to do to protect the long-term health of our economy.