Sky News 11 March 2020 - article by Greg Heffer, Political Reporter
Chancellor Rishi Sunak has told Britons fearful of the impact of the global coronavirus outbreak: "We will get through this together."
As he unveiled his budget to MPs in the House of Commons, Mr Sunak - who has only been in the job for 27 days - stressed the government is "doing everything we can" to keep the UK "healthy and financially secure".
He admitted many would be "worried" about their health, the future of their finances and fate of their businesses as COVID-19 cases continue to increase.
Mr Sunak warned of "temporary disruption" to the UK economy, with predictions that up to 20% of the workforce could be absent at any one time.
In response to the coronavirus outbreak, the chancellor pledged to give the NHS "whatever extra resources" it needs.
He announced the government will refund, in full, any statutory sick pay for people self-isolating for up to 14 days for businesses with fewer than 250 employees.
And business rates for some firms will also be abolished this year in an "exceptional step", the chancellor said.
The package of government measures to deal with the coronavirus outbreak amounted to a £30bn fiscal stimulus, Mr Sunak added.
But, despite the "fiscal loosening", Mr Sunak told MPs his budget is within the fiscal rules set out in the Conservatives' election manifesto and "with room to spare".
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, Mr Sunak said.
Borrowing would then fall to 2.5%, 2.4% and 2.2% in the following years, he added.
Confirming Tory manifesto pledges, Mr Sunak announced the National Insurance threshold will increase from £8,632 to £9,500, while £5bn would be provided to get gigabit-capable broadband into the hardest to reach locations.
Among the chancellor's other measures:
- The "tampon tax" - the 5% VAT charge on women's sanitary products - will be abolished
- A planned increase in spirits duty will be cancelled and duties on beer and wine will be frozen
- The lifetime limit for entrepreneurs' relief will be reduced from £10m to £1m
- Research and development investment will increase to £22bn a year
- A plastics packaging tax will be levied on manufacturers and importers
- The red diesel tax relief scheme will be abolished "for most sectors"
- Treasury offices will be established in Scotland, Wales and Northern Ireland, along with a new "economic campus" in the north of England
- £500m per year will be spend on fixing potholes
- VAT on ebooks will be abolished
- The health surcharge for migrants will be raised to £624
Mr Sunak hailed his budget as the "largest sustained fiscal boost for nearly 30 years".
"This is the budget of a government that get things done," the chancellor said at the end of his hour-long address.
"A people's budget from a people's government."
The Bank of England earlier cut interest rates and announced help for businesses in an emergency move to provide support amid the coronavirus crisis.
Global stock markets have slumped in recent days on fears of the economic impact of the outbreak.
Concerns for the UK economy grew on Wednesday after the Office for National Statistics revealed figures show there was zero growth in the UK economy in the three months to January 2020, prior to the coronavirus outbreak.
During a cabinet meeting on Wednesday morning, ahead of the budget, Prime Minister Boris Johnson wished health minister Nadine Dorries a "speedy recovery" after she became the first MP to test positive for coronavirus.
Senior cabinet minister Michael Gove, the Chancellor of the Duchy of Lancaster, suggested next week's planned talks on the future EU-UK post-Brexit economic relationship may be postponed due to COVID-19.
The fate of the next round of negotiations was a "live question", he told a committee of MPs.
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."
