London Daily

Focus on the big picture.
Thursday, Sep 11, 2025

Rishi Sunak faces fiscal dilemma after rare political misstep

Rishi Sunak faces fiscal dilemma after rare political misstep

Analysis: Ill-timed US trip and reluctance to turn bailout taps back on could tarnish chancellor’s carefully polished image
Hobnobbing with tech bosses in California as the hospitality sector howled in pain at the catastrophic impact of the Omicron variant was a rare political misstep for a chancellor whose public image is so carefully polished.

Until midweek, the Treasury had stuck carefully to the line that ample financial support was already available to hard-hit hospitality firms – the VAT cut for the sector extends into next spring, for example.

And Downing Street officials maintained that since they weren’t ordering businesses to close, additional help would not be necessary.

Sunak himself was said to be deeply sceptical about turning the bailout taps back on, after the furlough scheme was finally wound down in the autumn, and as he tries to rebuild his reputation for fiscal prudence – something he believes is a key dividing line with Labour.

Yet even before Chris Whitty advised the public “don’t mix with people you don’t have to”, restaurants and pubs were sounding the alarm about plunging takings in the crucial Christmas season – one they hoped would mark a return to something like normal after last year’s festive shutdown.

And added to the public’s growing caution as they batten down the hatches is the impact of mass absences as Omicron rips through the population – particularly in London, though other areas are unlikely to be far behind.

By Wednesday, when Whitty and the prime minister were peppered with questions about what precautions the public should take, it was clear the line wouldn’t hold – and on Thursday morning a string of Conservative MPs vented their frustration at the lack of support (as well as at Whitty, the chief medical officer for England).

Sunak prepared to fly back to London, first delivering the soothing message that he was listening to hospitality businesses, and would continue to work with them “over the coming days”.

With venues closing and a slew of events and performances being cancelled, the consensus at Westminster is that the chancellor may have to move faster than that, and announce a package of support before the weekend.

He now faces the dilemma of whether to draw up a relatively small-scale, targeted rescue scheme just for hospitality – or address the crisis many more businesses are likely to face over the next month or so, as staff fall ill.

Sunak is widely seen as a potential successor to Boris Johnson, whose authority has taken a hammering in recent weeks over a series of missteps and scandals.

Being caught on the hop in his spiritual home of sunny California underlined how different his style is to that of Johnson.

Sunak is an enthusiast for the entrepreneurial west coast startup culture, devoting part of his Tory party conference speech this year to the potential for artificial intelligence (as well as promising to make the UK “the most exciting place on the planet”).

He met his wealthy wife, Akshata Murty, when the pair were studying at Stanford, and the couple have a property in California. One Labour strategist dismissively calls him a “wannabe tech bro”, with his branded hoodies and Palm Angel sliders.

Sunak and the prime minister have distinct ideological differences too. While Johnson’s instinct is to spend his way out of a political hole, Sunak wants to build up enough headroom now to cut taxes in the run-up to the next general election. There has sometimes been frustration in the Treasury about Johnson’s boosterish tendency to overpromise.

But for now, Sunak will be reluctantly forced back into spending mode, to prop up an economy battered yet again by Covid. And he will be hoping voters – as well as furious backbenchers – will forget that he was caught on the wrong side of the Atlantic when the crisis hit.
Newsletter

Related Articles

0:00
0:00
Close
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
Pig Heads Left Outside Multiple Paris Mosques in Outrage-Inducing Acts
Nvidia’s ‘Wow’ Factor Is Fading. The AI chip giant used to beat Wall Street expectations for earnings by a substantial margin. That trajectory is coming down to earth.
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
On the Anniversary of Queen Elizabeth’s Death: Prince Harry Returns to Britain
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Murdoch Family Finalises $3.3 Billion Succession Pact, Ensuring Eldest Son’s Leadership
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Court Staff Cover Up Banksy Image of Judge Beating a Protester
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
Elon Musk Poised to Become First Trillionaire Under Ambitious Tesla Pay Plan
France, at an Impasse, Heads Toward Another Government Collapse
Burning the Minister’s House Helped Protesters to Win Justice: Prabowo Fires Finance Minister in Wake of Indonesia Protests
Brazil Braces for Fallout from Bolsonaro Trial by corrupted judge
The Country That Got Too Rich? Public Spending Dominates Norway Election
Nearly 40 Years Later: Nike Changes the Legendary Slogan Just Do It
Generations Born After 1939 Unlikely to Reach Age One Hundred, New Study Finds
End to a four-year manhunt in New Zealand: the father who abducted his children to the forests was killed, the three siblings were found
Germany Suspends Debt Rules, Funnels €500 Billion Toward Military and Proxy War Strategy
EU Prepares for War
BMW Eyes Growth in China with New All‑Electric Neue Klasse Lineup
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
US Justice Department Launches Criminal Mortgage-Fraud Probe into Federal Reserve Governor Lisa Cook
Escalating Drug Trafficking and Violence in Latin America: A Growing Crisis
US and Taiwanese Defence Officials Held Secret Talks in Alaska
Report: Secret SEAL Team 6 Mission in North Korea Ordered by Trump in 2019 Ended in Failure
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Florida Murder Case: The Adelson Family, the Killing of Dan Markel, and the Trial of Donna Adelson
×