Rishi Sunak had not signed up to plans providing extra financial support for pubs and restaurants when they were briefed to a newspaper amid a major Tory rebellion against tougher coronavirus restrictions, HuffPost UK has learnt.
The chancellor was blindsided by government sources telling the Telegraph that more support was on the way, with Monday morning’s front page understood to be the first the Treasury had heard of the plans.
HuffPost UK understands that Sunak is now working to see what more it can do to help the Covid-hit hospitality sector, beyond existing economy-wide government schemes.
But the news comes after reports of tensions between Sunak and Boris Johnson.
Addressing the speculation about tension with the prime minister, Sunak joked earlier this month that: “I should take his credit card away”.
The Telegraph report came with Johnson struggling to contain a rebellion of up to 70 Tory MPs against the new tougher system of tiered restrictions, which make it harder for pubs to operate.
The Covid Recovery Group of rebels said on Monday it hoped to see the details of the new package for hospitality before MPs vote on the tiered restrictions on Tuesday evening.
But it is unclear if new proposals will be ready in time, with Downing Street saying only that support was being kept “under review”.
“We are under no doubt of the difficulty that the hospitality industry are facing, especially as we move towards Christmas, which is obviously a very busy time for the hospitality industry,” a No.10 spokesperson told reporters earlier on Monday.
“But as I say we keep the support under review.”
Hospitality UK chief executive Kate Nicholls said the industry has been urging the Treasury to provide extra support.
She told HuffPost UK: "Businesses are on the brink and without extra support many are just not going to survive.
"We have been making that point to the Treasury, with suggestions as to how to support our sector.
"It is looking pretty miserable now, but it will look much worse under the new tier system, within which 94% of our members expect to trade at a loss or be unviable in tier 2.
"Those businesses will not survive this Christmas without further support – they need it badly and they need it now.”
Announcing fresh financial support could prove embarrassing for Sunak just days after he announced his spending review, which included the forecast that the UK is set to borrow £394bn this year, equivalent to 19% of GDP.
The news comes after Johnson placed nearly 99% of the country under the more stringent restrictions, which mean hospitality must close in tier 3, while pubs can only serve alcohol with “substantial meals” in tier 2.
The decision sparked a major backlash from Tory MPs and has forced the prime minister into making concessions, including offering a fresh Commons vote on the measures by February 3 if they are to continue beyond that date.
On Monday, the Telegraph reported that extra cash would also be offered to pubs and restaurants badly hit by the restrictions.
A senior government source told the newspaper: “We understand the fact that the hospitality industry has been particularly hard-hit during the pandemic.
“The Christmas period is a time of year when establishments would expect to be particularly busy so we are looking at how we can support them over the festive period.”
Following the report, Covid Recovery Group chair Mark Harper said: “I welcome the fact that the government has recognised our concerns about the enormous impact that its proposals will have on the hospitality industry and has suggested further support.
“We look forward to seeing the detail of the support proposed being set out before the vote on the restrictions tomorrow evening, along with the cost-benefit analysis we’ve been asking for.”
No.10 has been approached for fresh comment.