Chancellor Rishi Sunak wages war on coronavirus in Budget

‘We will get through this’: Chancellor Rishi Sunak declares war on coronavirus in Budget unveiling multi-billion pound package to prop up NHS, business and sick workers as he vows country will NOT fall into Italy-style chaos

  • Rishi Sunak is delivering his Budget as he prepares the UK to fight coronavirus
  • Chancellor is pumping billions of pounds into propping up business and NHS
  • Tory Health Minister Nadine Dorries first MP to test positive for the killer disease
  • Bank of England this morning moved to slash key interest rate by 0.5% to 0.25%   
  • Financial package includes ‘record’ funding to boost the UK’s core infrastructure
  • Fuel duty freeze and national insurance tax cut also expected to be announced 

Rishi Sunak put Britain on a war footing against coronavirus today saying he knows people are ‘worried’ but vowing that the UK will not fall into Italy-style chaos.

Unveiling his crucial first Budget, the Chancellor insisted his plans will ensure the UK is ‘one of the best placed economies in the world’ to cope with the impact of the disease.

He said the multi-billion pound package will help those on the ‘front line’ of combating the spread the tools they need – making clear he believes Britain has the ‘economic tools’ to avert disaster.

He said the government was doing ‘everything it can’ to keep the country ‘healthy and financially secure’. 

‘We will get through this together,’ he said. ‘The British people may be worried but they are not daunted.’ 

He added: ‘This virus is the key challenge facing our country today… it’s going to be tough but I’m confident that our economic performance will recover.’   

Mr Sunak is delivering his Budget in the shadow of mounting global turmoil over coronavirus, with Italy effectively in lockdown and the risk that the situation could spiral in the rest of Europe.

The crisis was dramatically brought home to politicians overnight as health minister Nadine Dorries became the first MP to test positive, days after attending a reception at No10 with Boris Johnson.

Some were expected to stay away from the set-piece today amid fears of contagion in the packed chamber. However, the PM has insisted he does not need to be tested as he has no symptoms, and was not within two metres of his minister at the reception.

Meanwhile, in a sign of the increasingly proactive official response to the outbreak the Bank of England this morning slashed its key interest rate by half a per cent to 0.25 per cent.

Despite tackling coronavirus being at the heart of the Budget, Mr Sunak will also insist the government has not abandoned its determination to ‘level up’ the country after Brexit.

Unveiling his crucial first Budget, the Chancellor insisted his plans will ensure the UK is ‘one of the best placed economies in the world’ to cope with the impact of the disease

Mr Sunak said the government was doing ‘everything it can’ to keep the country ‘healthy and financially secure’

Mr Sunak posed with his team outside the Treasury today as he made his way to the Commons to deliver the Budget

Boris Johnson took PMQs before the Budget statement. No10 says he does not need to be checked for coronavirus despite coming into contact with a minister who has tested positive

The move is designed to combat the ‘economic shock’ which is now expected to be caused by coronavirus. 

Mr Sunak told MPs: ‘I know how worried people are. Worried about their health, the health of their loved ones, their jobs, their income, their businesses, their financial security.

‘And I know they get even more worried when they turn on their TVs and hear talk of markets collapsing and difficult times coming.

‘People want to know what is happening and what can be done to fix it. What everyone needs to know is we are doing everything we can to keep this country and our people healthy and financially secure.

‘We are clear that this is above party. We will do right by you and your family and I know I will have the support of the whole House as I say that.’

The central bank said in a statement that the decision to cut interest rates had been supported by all nine members of its powerful Monetary Policy Committee and would ‘help support businesses and consumer confidence at a difficult time’. 

Mr Sunak is walking the tightrope of showing the UK is prepared for the impact of coronavirus while also demonstrating the government is delivering on its domestic priorities.   

Seeking to show the government is still determined to ‘level up’ the country after Brexit, Mr Sunak is confirming plans to invest ‘record amounts’ on improving the UK’s key infrastructure like roads, railways and broadband. 

Some £600billion will be made available for the infrastructure war chest – treble the typical level of spending which will take public investment to its highest level since the 1950s.  

A manifesto pledge to increase the threshold for paying national insurance will be honoured, giving 30 million workers an immediate tax cut of £100. 

A ten-year freeze on fuel duty is likely to remain in place and £2.5 billion will be made available to repair 50 million potholes over the next five years. 

Mr Sunak told Cabinet that while coronavirus is ‘front and centre in our minds’, the Budget will implement the manifesto on which the Conservatives were elected. 

He said the Budget will deliver investment for public services and tax cuts for ‘millions of hardworking people’ as he also stressed there ‘could be no delay in laying the foundations for a decade of growth where opportunity was spread equally across the UK’.

Mr Johnson told the Cabinet the Budget ‘starts to tackle head on the challenges facing our economy and country’. 

However, any domestic policy announcements are likely to be totally overshadowed by the government’s response to the coronavirus crisis. 

Government sources acknowledged that today’s Budget will be judged on whether the Chancellor can deliver the confidence needed to stop the economy plunging into recession due to anticipated disruption.

PM will not be checked for coronavirus despite contact with infected health minister  

Boris Johnson is not being tested for coronavirus despite being at a reception with infected health minister Nadine Dorries, it emerged today.

Downing Street said the PM did not need to be checked as he was showing ‘no symptoms’ and had not been within two metres of the quarantined MP.

Despite MPs saying he should be tested, sources also insisted there was less risk because Mr Johnson regularly washed his hands. 

Ms Dorries has revealed she has put herself into isolation, just days after attending a reception at No10 with the PM.

The Tory MP gave a speech in the Commons on Wednesday night, was in the tea rooms with other politicians, and held a surgery on Saturday for 50 of her constituents. She is believed to have started feeling ill on Thursday, before deteriorating the following day.

The 62-year-old had the virus and she is now said to be recovering – although she voiced fears for her 84-year-old mother, who is living at her home and ‘began coughing’ yesterday.   

Mr Johnson attended a Commonwealth Day service at Westminster Abbey with the Queen on Monday. 

Another MP, Labour’s Rachel Maskell, today declared that she is self-isolating after having a meeting with Mrs Dorries on Thursday. 

‘Whatever we say, this will become known as the corona Budget,’ said one insider last night. 

‘It is the number one priority and the scale of the Budget measures will reflect that.’ 

Mr Sunak is expected to pledge billions of pounds to shore up the economy in the weeks and months ahead.  

The Chancellor, whose Budget has had to be rewritten as the deadly virus has spread, will unveil a string of measures to try to save solid businesses from bankruptcy.

As the outbreak takes grip, advance bookings for hotels, restaurants and bars this summer have halved, according to industry group UK Hospitality. 

Some firms are being hit by a shortage of supplies from virus-ravaged China. 

Today’s Budget measures will include allowing firms to defer tax payments in order to improve cash flow. 

Ministers have also examined the idea of offering struggling firms interest-free loans and the ability to apply for financial help from a hardship fund.

Mr Sunak will pledge to give the NHS whatever resources it needs to tackle the biggest challenge in its history. 

Today’s Budget package will also confirm reforms to statutory sick pay, allowing workers to receive it from the first day of illness rather than the fourth. 

The Office for Budget Responsibility is expected to downgrade its forecast for economic growth, and business organisations are warning of potentially fatal cashflow problems for some firms.

The deputy chief medical officer warned yesterday that the start of the peak of the epidemic was expected within a fortnight.

The number of confirmed cases of coronavirus yesterday jumped by 63 to 382, and the UK recorded its sixth death.

Mr Johnson will chair another meeting of the emergency committee Cobra tomorrow. 

It will discuss whether the UK needs to switch formally from trying to contain the virus to a strategy of trying to delay a full-blown epidemic.

This would quickly lead to ‘social distancing’ measures such as asking employees to work from home and to stay at home if they have even mild cold symptoms. Schools could be closed and mass gatherings banned.

PMQs was less packed than usual, as some MPs apparently stayed away to avoid thr risk of spreading the virus

Mark Carney, the governor of the Bank of England, today announced interest rates were being slashed to 0.25 per cent amid the coronavirus outbreak

Rishi Sunak, pictured in the Treasury last night, will today unveil his Budget which will include a raft of measures to better prepare the UK to combat the impact of the coronavirus

Mr Johnson was today facing growing calls to get tested for coronavirus after Ms Dorries became the first MP diagnosed with the disease. 

Ms Dorries has revealed she has put herself into isolation, just days after attending a reception at Number 10 with the PM.

The Tory MP gave a speech in the Commons on Wednesday night, was in the tea rooms with other politicians, and held a surgery on Saturday for 50 of her constituents. 

She is believed to have started feeling ill on Thursday, before deteriorating the following day.

Tests confirmed last night that the 62-year-old had the virus and she is now said to be recovering – although she voiced fears for her 84-year-old mother, who is living at her home and ‘began coughing’ yesterday.  

Officials are tracing everyone she has been in contact with since contracting the virus. 

However, Downing Street has refused to say whether the PM will be tested. As of yesterday morning, he had not been.

Mr Johnson attended a Commonwealth Day service at Westminster Abbey with the Queen on Monday.

Mr Johnson and the Health Secretary Matt Hancock updated Cabinet this morning with the latest information on the outbreak. 

Mr Johnson also wished Ms Dorries a ‘speedy recovery’, noting that she was following official advice to self-isolate.   

Chancellor Rishi Sunak will devote £2.5billion of Budget money to the war on potholes 

Rishi Sunak will unveil a multibillion-pound drive to ‘eradicate the scourge’ of potholes throughout the country.

The Chancellor will use his Budget speech today to pledge to spend £2.5billion on repairing 50million potholes over the next five years.

Drivers have been annoyed in recent years about disruptive works caused by building cycle and bus lanes while roads has worsened.

Mr Sunak will say the pothole money will be targeted at the South West, the North West and the east of England. The first half a billion will be spent this year.

Rishi Sunak will unveil a multibillion-pound drive to ‘eradicate the scourge’ of potholes throughout the country. (Above, file photo of potholes in a street in Harlow, Essex)

The Treasury said action is needed to improve infrastructure and deal with a situation where 90 per cent of insurance claims are related to pothole damage.

The Chancellor said: ‘We can’t level up Britain and spread opportunity if we are spending our journeys dodging potholes and forking out for the damage they cause.

‘It’s vital we keep roads in good condition. That’s why we are going to eradicate the scourge of potholes in every part of the country.

‘This funding will fill millions of potholes every year – speeding up journeys, reducing vehicle damage and making our roads safer.’

Mr Sunak said funding will also be available for local authorities to undertake long-term road resurfacing works to prevent potholes from appearing.

Luke Bosdet, of the AA, said tackling potholes was welcome but warned it must not be focused solely on major routes, leaving minor roads and residential streets ‘plagued’ by potholes.

But shadow chancellor John McDonnell branded the move a gimmick. He said the ‘Tories are repeating their mistake of the last 10 years’ by focusing on a ‘gimmicky grab-bag of projects’ which will only disappoint.

Chancellor vows £100m to make streets safer in Budget 

Rishi Sunak will use today’s Budget to ‘toughen up community sentences’ to make Britain’s streets safer. 

The Chancellor will set aside £100million to bolster the probation service and support victims of rape and sexual assault.

Convicted criminals released from prison on licence half-way through their sentences will face tighter constraints, including stricter curfews.

And offenders known to commit crimes after drinking will be fitted with so-called ‘sobriety tags’, which monitor their location and sample skin perspiration to determine whether they have consumed alcohol.

Mr Sunak promised ‘new funding to toughen up community sentences, crack down on domestic abuse and provide victims with the support they need’, as a cross-party group of MPs called for a major investment in youth services to help prevent knife crime and protect children from a life of crime and violence. 

Ministers pledge £5billion of loans to boost post-Brexit exports 

The Chancellor is preparing to boost post-Brexit exports for UK businesses by making £5billion of loans available in his forthcoming Budget.

Rishi Sunak is set to hand over £5billion to UK Export Finance (Ukef), the Government’s export credit agency that provides loans to overseas buyers of British goods and services.

The Treasury said the money would help UK exporters to increase their global sales as Britain prepares for life outside the European Union, with the Chancellor helping to top up the purchasing power of those abroad by providing a competitive loan rate through Ukef.

The agency’s role is to ensure exports do not fail due to a lack of available finance or insurance for those looking to buy up Britain’s export offers.

It will be the largest increase ever handed to the Ukef, taking its lending power up from £3billion to £8billion.

As negotiations with the EU’s Michel Barnier (pictured) continue, the Chancellor is preparing to boost post-Brexit exports for UK businesses by making £5billion of loans available

Mr Sunak said: ‘This decade will provide even more opportunities for British businesses to export and trade with new partners across the world.

‘The Government will support business to seize these opportunities and thrive on the world stage.

‘This package – which is the highest level of export lending the Government has ever made available – will provide support to industries and regions across the country.’

From the £5billion pot being made available, £2billion will be offered for exports that encourage green growth while £1 billion will be set aside for defence industry purchases, Number 11 confirmed.

As part of the extra funding, foreign investors hoping to start a business in the UK are also expected to have their visa applications supported by the Department for International Trade.

Britain’s flood defences bolstered with £5billion after storm misery 

Britain’s flood-battered regions are to receive a £5billion boost in the Budget as Boris Johnson’s Government ramps up its spending on high-profile infrastructure projects.

Chancellor Rishi Sunak will use his first Budget – less than a month after taking over at the Treasury – to announce 336,000 properties in England will benefit from a doubling to £5.2 billion by 2024 of money for flood defences.

The announcement about the boost for flood-hit areas comes after a winter in which the UK has been battered by some of the worst storms in recent memory. 

Communities struggling to recover from the damage will be able to claim from a £120 million Winter Defence Fund designed to repair flood defences as quickly as possible.

Mr Sunak told Sky News at the weekend: ‘It’s going to pay for over 2000 different flood schemes around the country, it’s going to protect over 300,000 homes. 

‘We have all either in our constituencies as MPs or watching on TV seeing the devastation wreaked on communities by flooding, this will make an enormous difference to people’s lives and I think it’s absolutely the right thing to do and this is something that wherever you live, whether you are in the south-west or the north-east, this impacts you, this investment will make a difference.’ 

Chancellor expected to listen to Tory warnings not to hike fuel duty 

A ten-year freeze on fuel duty is likely to remain in place as Rishi Sunak listens to warnings from Tory MPs who are vehemently opposed to a hike. 

Tory backbenchers warned that ending the freeze could hurt the NHS while it is under strain dealing with the coronavirus outbreak. 

And Mr Sunak is expected to listen to the concerns and pledge to keep fuel duty locked down when he addresses the Commons this afternoon. 

Robert Halfon, the driving force behind a petition supported by 36 Tory backbenchers, said raising taxes at the pumps would have an impact on the health service.

Tax boost for small businesses  

Small businesses will be given a tax boost at today’s Budget as part of a government bid to prepare them to cope with a planned increase in the minimum wage.

The Employment Allowance is expected to be increased from £3,000 to £4,000 from next month.

The move will mean that firms will not have to make Employer National Insurance Contributions – known by some as the ‘job’s tax’ – on the first £4,000 of their annual bill.

Many smaller firms hate the allowance rate because they argue it makes it harder for them to bring on new staff members.

Adding an extra £1,000 buffer to the allowance will give firms more wiggle room following last year’s decision to increase the minimum wage to £10.50 within the next five years.

The minimum wage is due to rise by 50p to £8.72 next month – a six per cent increase. 

He said it would be akin to ‘giving with one hand and taking away with the other’ if the Chancellor gave the NHS extra cash while raising fuel duty.

‘Our message to the Chancellor is that the economy is facing a major challenge in coronavirus,’ he said. ‘We should be helping ordinary folk and businesses, not hammering them with fuel duty charges.  

‘Don’t forget, the NHS is going to need a lot of extra money to deal with this kind of virus.

‘What’s the point though if you then put up fuel duty? Then the NHS will have to pay more as well because of the cost of transportation, ambulances and all that sort of thing.

‘They would be giving with one hand and taking away with the other.’ 

Senior Tories such as former party leader Iain Duncan Smith, ex-Brexit secretary David Davis and ex-transport secretary Chris Grayling were among the signatories to the letter, which Mr Halfon handed to Treasury officials yesterday.  

Campaigners had previously flagged to Downing Street that – along with another 13 Tory MPs who signed a similar letter, led by ex-Cabinet minister Esther McVey, on February 24 – they have the numbers to bring about Boris Johnson’s first Commons defeat since securing his 80-seat landslide victory at the December election if Mr Sunak was to opt to hike fuel duty.

The MPs’ letter co-ordinated by Mr Halfon was backed up with a petition by FairFuelUK, which garnered more than 134,000 signatures. 

Budget confirms £5billion funding for rollout of faster broadband  

Fighting fund to reduce rough sleeping 

A fighting fund to reduce rough sleeping is expected to be one of Rishi Sunak’s main announcements at the Budget.

The Chancellor will unveil a package of investment worth an estimated £643 million.

The cash will be used to help homeless people to get off the streets and to support them to get their lives back on track.

The Tories have been repeatedly hammered by Labour over rising homelessness in recent years and Boris Johnson said in February the current situation was ‘totally unacceptable’.

The government has previously announced a £236 million fund to tackle homelessness with rough sleeping in England having more than doubled over the past ten years.

Mr Johnson said last month: ‘The number of people sleeping rough in our country is way too high. It is true that they have been coming down in the last year or so, but we want to drive that forward now.

‘We want to make a big, big dent in those numbers.’

A £5billion investment to roll out faster broadband across the UK by 2025 is expected to be confirmed by the Chancellor in today’s Budget.

The Conservatives pledged at the general election to bring full fibre and gigabit-capable broadband to every home and business in Britain within five years.

Rishi Sunak is set to use his first Budget to confirm the cash injection which he hopes will benefit more than five million homes and businesses.

Gigabit broadband, which is 40 times faster than standard superfast broadband, will be rolled out to the hardest to reach 20 per cent of the country, the Treasury has already announced.

The Chancellor is also expected to announce a £1 billion deal with the mobile phone industry to boost 4G coverage across the country – with the biggest improvements likely to be in Scotland, Northern Ireland and Wales.

The deal will provide extra coverage to 280,000 premises and 16,000km of roads, the Treasury anticipates.

Mr Sunak said: ‘We are committed to levelling up across every region and nation in the UK and that is why we are making the largest ever public investment into broadband.

‘This investment delivers on our promises to the British people, boosting growth and prosperity across the country.’

There is expected to be confirmation of a multi-billion pound investment in broadband improvements in the Budget this week

Sick pay entitlements to be boosted amid coronavirus crisis 

Rishi Sunak has hinted his Budget today will provide help for workers who do not qualify for statutory sick pay and who may be concerned at the financial impact coronavirus could have on them.

The government is set to advise anyone who has flu-like symptoms to self-isolate for a period of seven days.

But that could be a major problem for the self-employed or workers who do not earn enough money to qualify for paid help when they are unwell.

The Chancellor made clear on Sunday that he was well aware of the potential financial difficulties which some people could face if they are instructed to stay at home.

He hinted help will be made available with potential changes being made to the existing Universal Credit benefits system.

Speaking to the BBC’s Andrew Marr Show, Mr Sunak said: ‘Well, you’re absolutely right, there will be some people who are not covered by statutory sick pay.

‘We’re looking at all of the various interactions with our benefit system, whether it’s Universal Credit, whether it’s employment support allowance, and making sure that people are, crucially, not penalised for doing the right thing.’

Mr Sunak said ministers were working to ensure that the benefit system is ‘as quick and as accessible as possible, given the circumstances we face’.

Parents of sick babies will get £160 a week extra so they can focus on crisis  

Parents of sick newborn babies will be able to claim a new neonatal pay and leave entitlement under measures set to be announced by the Chancellor at today’s Budget.

Rishi Sunak will outline plans to allow new mothers and fathers to claim statutory paid leave for every week their child is in neonatal care, up to a maximum of 12 weeks, when he delivers his first Budget on Wednesday.

Treasury Minister Kemi Badenoch said the cost of the leave – to be paid at a rate of around £160 per week – would almost entirely be incurred by the government, rather than business.

She said: ‘This week’s Budget is about many things. It will deliver on the promises we made to the British people in last year’s election campaign. And it will lay the foundations for the next decade of UK economic growth. What it will also do is deliver support to hard-working families.

‘And for families who are unlucky enough to spend the first period of their child’s life in neonatal care it will bring particularly good news. Because the Chancellor will announce that for the first time ever parents in these difficult circumstances will be able to claim a new neonatal pay and leave entitlement.

‘We will bring in an historic new entitlement ensuring parents having to take time off work because they have a sick baby will get paid parental leave.’

Cuts to National Insurance could benefit millions of workers

A National Insurance cut is likely to be the centrepiece of Rishi Sunak’s first Budget.

The Conservatives pledged in their 2019 general election manifesto to slash the amount people have to pay.

Mr Sunak is expected to increase the threshold at which payments start from £8,632 to £9,500 with the change coming into effect next month.

Ultimately the Tories want to increase the threshold to £12,500 over the next five years.

Today’s widely expected move would save workers approximately £100 a year.

The Tory manifesto stated: ‘We not only want to freeze taxes, but to cut them too. We will raise the National Insurance threshold to £9,500 next year – representing a tax cut for 31 million workers. Our ultimate ambition is to ensure that the first £12,500 you earn is completely free of tax – which would put almost £500 per year in people’s pockets.’

Mr Sunak was asked on Sunday if he intended to go ahead with the cut as proposed.

He replied: ‘You know we talked in the manifesto in the campaign about National Insurance.

‘That is something that we said we would do and as I said my broad theme is to deliver on the promises that we made.’ 

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