Rishi Sunak reveals eating out discount, jobs bonus scheme and stamp duty cut (Reports).
Two schemes unveiled by Chancellor Rishi Sunak to stem coronavirus job losses may not be value for money for taxpayers, a top official has warned.
HM Revenue and Customs boss Jim Harra wrote to Mr Sunak to express concerns about paying firms a £1,000 bonus to retain furloughed staff.
He also questioned the value for money of a discount scheme offering 50% off restaurant meals.
The chancellor overruled Mr Harra, saying swift action was needed.
The exchanges are revealed in letters between the pair during a standard procedure for assessing the effectiveness of policy decisions.
They show Mr Sunak overruled officials by issuing so-called “ministerial directions” to instruct them to go ahead with both programmes.
Under plans outlined on Wednesday, firms will be offered a one-off £1,000 “job retention bonus” for every furloughed employee kept to the end of January 2021.
The UK-wide scheme, which will apply to workers earning over £520 per month, has been estimated to cost up to £9.4bn.
The chancellor has admitted some firms will claim the bonus who would be keeping staff on in any case, saying there would be a “dead weight” cost to the policy.
He told BBC Radio 4’s Today programme: “In an ideal world… you would minimise that dead weight and do everything in incredibly targeted fashion.
“The problem is the severity of what was happening to our economy, the scale of what was happening, and indeed the speed that it was happening at demanded a different response.”
But Labour leader Sir Keir Starmer said the bonus scheme “should be targeted in the areas which most need it, not across the piece”.
Mr Harra also questioned the plan to offer diners a 50% discount for every meal, up to £10 a head, from Monday to Wednesday throughout August.
In his letters, sent before Wednesday’s announcements, Mr Harra said there was “sound policy rationale” behind the aims of both programmes, but it had been hard to estimate their effectiveness.
Of the jobs programme, he wrote: “It has proved difficult to establish a counterfactual for this scheme, which depends on the overall cost of the scheme and the number of extra jobs it would protect, both of which are currently highly uncertain.”
He added that he had been unable to conclude the policy “represents value for money” to the standards expected in the public spending guidebook.