Chancellor Rishi Sunak today unveiled a £30bn package of measures that will extend sick pay, scrap business rates for many firms and boost NHS funding.
The Chancellor said in today’s Budget that he was making the moves as he expected to see a significant but temporary disruption to the UK economy as a result of the current coronavirus outbreak.
Sunak, who was promoted to Chancellor just four weeks ago after Sajid Javid quit the government, said the government is doing “everything it can” to keep the “country and our people healthy and financially secure”.
The Chancellor also pledged:
- statutory sick pay for “all those who are advised to self-isolate” even if they have not displayed symptoms
- the government will meet costs for businesses with fewer than 250 employees of providing statutory sick pay to those off work “due to coronavirus”
- those on in-work benefits who get ill will be able to “claim from day one instead of day eight”
- business rates for firms with a rateable value below £51,000 suspended for a year
- a £500m “hardship fund” to be given to local authorities to help vulnerable people in their area
- “fiscal loosening” of £18bn to support the economy this year, taking the total fiscal stimulus to £30bn
- a “temporary coronavirus business interruption loan scheme” for banks to offer loans of up to £1.2m to support small and medium-sized businesses
The Chancellor’s measures followed a highly unusual emergency cut in interest rates from 0.75% to 0.25%, announced this morning by the Bank of England.
In other developments:
- an eighth British victim has died from coronavirus, after the 53-year-old woman was ‘critically ill’ in Bali before contracting Covid-19
- the global death toll has surpassed 4,280
- Public Health England, which has already carried out more than 25,000 coronavirus tests across the UK, is set to expand the number of people it can test a day to 10,000 – currently 1,500 are being carried out
- Health Minister and Conservative Nadine Dorries is self-isolating at home after testing positive for coronavirus
In other measures outlined in today’s Budget, the Chancellor said that the health surcharge for migrants will be raised to £624.
Sunak also confirmed he would also meet the Conservative manifesto promise to increase the National Insurance threshold from £8,632 to £9,500.
The Office for Budget Responsibility (OBR) forecast government borrowing will increase from 2.1% of GDP in 2019/20 to 2.8% in 2021/22, the Chancellor said.
Borrowing would then fall to 2.5%, 2.4% and 2.2% in the following years.
Sunak said his Budget marked the “largest sustained fiscal boost for nearly 30 years”.
He said: “This is the budget of a government that get things done.
“A people’s Budget from a people’s government.”
But Labour shadow chancellor John McDonnell said: “News of zero growth and falling production, even before the outbreak of coronavirus, show the Tories do not have a grip on the economy.
“For years the Tories have had no plan for the economy – and unfortunately today’s budget announcements look likely to spell more of the same, and more disappointment for the country as a whole.”