Chancellor Rishi Sunak announces £30 billion Budget boost to combat coronavirus threat
Video report by ITV News Political Correspondent Paul Brand
A £30 billion package to stimulate the economy was announced by the Chancellor as the Government and Bank of England sought to protect jobs and livelihoods against the coronavirus crisis.
As he delivered the Budget in the House of Commons, Rishi Sunak said he would "do whatever it takes to support the economy" and will give the NHS "whatever extra resources" it needs to combat the coronavirus outbreak.
Mr Sunak said there was "likely to be a temporary disruption" to the economy as a result of coronavirus but insisted his plans would bring "stability and security".
As of Wednesday, there were 460 confirmed cases in the UK and eight people had died after contracting the disease.
Just hours before this, the Bank of England also moved to bolster the economy against the impact of Covid-19 by announcing an emergency interest rate cut from 0.75% to 0.25% to help UK businesses manage the economic shock from the outbreak.
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Coronavirus
NHS
As he began to set out his spending plans, Mr Sunak promised "whatever extra resources our NHS needs" to combat coronavirus, whether it be "millions of pounds or billions of pounds".
"Whether it's research for a vaccine, recruiting thousands of returning staff, or supporting our brilliant doctors and nurses…whatever it needs, whatever it costs, we stand behind our NHS," Mr Sunak told the Commons.
Mr Sunak said any extra funding would come on top of £6 billion of new funding to support the NHS over this Parliament.
Business rates
Business rates will be scrapped for thousands of small businesses over the next year, Mr Sunak said.
Businesses such as shops, cinemas, restaurants and music venues with a rateable value under £51,000 will not have to pay the tax for the next financial year in a bid to help them through the coronavirus crisis.
Sick pay
The Chancellor said the Government will fully meet the cost of providing statutory sick pay for up to 14 days for workers in firms with up to 250 employees, providing over £2 billion for up to two million businesses.
He said said statutory sick pay will be available for "all those who are advised to self-isolate" even if they have not displayed symptoms, for up to 14 days.
Benefits system
Mr Sunak the Government would make it "quicker and easier to get benefits" for those not eligible for statutory sick pay, such as those who are self-employed or working in the gig economy.
The 39-year-old continued: "Those on contributory employment and support allowance will be able to claim from day one instead of day eight to make sure that time spent off work due to sickness is reflected in your benefits.
"I'm also temporarily removing the minimum income floor in Universal Credit."
Mr Sunak said these changes would provide a boost of £500 million to the welfare system, along with a £500 million hardship fund.
Loans to businesses
Mr Sunak also announced a £1.2 million Coronavirus Business Interruption Loan Scheme to support small and medium sized businesses struggling during the Covid-19 outbreak.
He said the "government will offer a generous guarantee on those loans, covering up to 80% of losses, with no fees, so that banks can lend with confidence".
What else was in the Budget?
Wednesday's Budget was the first post-Brexit and was intended to be a platform for the Government to set out its vision for the economy and detail of how it would be delivered, post-EU, as well as a chance to deliver on promises made at the December general election.
However, the outbreak of Covid-19 meant Mr Sunak's speech and spending plans were radically rewritten with a focus instead on softening the economic damage coronavirus will cause.
Although coronavirus was the focus of Mr Sunak's announcements, spending pledges were made in other areas too.
Flooding
A £120 million fund will be used to repair defences damaged in the winter floods, with £5.2 billion to be invested in flood defences over the next six years.
Fuel duty
Will be frozen for another year.
The Chancellor also confirmed the Government will abolish £2.4 billion annual tax relief on red diesel (used to operate off-road vehicles and machinery) in two years’ time, but agriculture, rail, domestic heating and fishing will be exempt.
Alcohol duty and pubs
Duties will be frozen on beer, cider, wine and spirits, and the Government will provide £1 million to support Scottish food and drink overseas and £10 million to help distilleries “go green”.
Mr Sunak also announced extra business rates discounts to pubs from £1,000 to £5,000, saying they are "the centre of community life but too many have closed over the last decade".
Cladding
A £1 billion building safety fund will be set up to ensure all unsafe combustible cladding is removed from buildings above 59ft (18m) tall.
National Insurance and pay
The National Insurance threshold will increase from £8,632 to £9,500, which Mr Sunak claimed would be worth £100 a year to 31 million people.
The Chancellor added the National Living Wage will rise to £10.50 per hour by 2024 if economic conditions allow.
Environment
A “plastics packaging tax” charging manufactures and importers £200 per tonne on packaging made of less than 30% of recycled plastic will be introduced in April 2022.
Entrepreneurs
The lifetime limit for entrepreneurs’ relief will be reduced from £10 million to £1 million, saving £6 billion a year, and research and development investment will be increased to £22 billion a year.
Potholes
Mr Sunak promised £27 billion in road improvements, including getting rid of potholes, and said it would be "the biggest ever investment in strategic roads and motorways".
Tampon tax
The Chancellor announced the abolition of the "tampon tax" from January of next year.
From January 2020 there will be no VAT on sanitary products.
Borrowing and spending
In total, Mr Sunak unveiled an additional “fiscal loosening” of £18 billion to support the economy this year, taking the total fiscal stimulus to £30 billion.
He said more than £600 billion would be spent investing in future prosperity over the next five years, taking net public investment to the highest levels in real terms since 1955.
The Chancellor also said borrowing will increase from 2.1% of GDP in 2019/20 to 2.4% in 2020/21 and 2.8% in 2021/22 and borrowing will then fall to 2.5%, 2.4% and 2.2% in the following years.
'Levelling up'
In a bid to spread the influence of the Government across the UK, Mr Sunak announced that Treasury offices will be set up in Scotland, Wales and Northern Ireland, as well as those already in London.
What was Labour's response?
Labour leader Jeremy Corbyn said the steps the Government has announced to reduce the economic impact of coronavirus are "welcome".
Mr Corbyn said: "The coronavirus outbreak is an emergency and so I want to make it clear that we have to work together, all of us, to meet this head on and to overcome it.
"But we'll only overcome this virus because of the dedication of our NHS staff, carers and public servants.
"The steps the Government has announced today to head off the economic impact of the coronavirus are obviously welcome but I have some points I wish to raise.
"We have to be straight with people, it is going to be much tougher because of the last ten years of deeply damaging and counter-productive cuts to all of our essential public services.
"We're going into this crisis with our public services on their knees and as today's figures confirm, with a fundamentally weak economy which is now flat-lining with zero growth even before the impact of coronavirus."
Shadow Chancellor John McDonnell said: "I think it's quite a victory for us in that sense but it's only a small shift. No where near far enough."
For voters in long standing Labour constituencies, said to have lent the conservatives their votes in December, today's budget was the first chance for them to see whether the government had repaid their faith.
There was - as we heard - that "levelling up" phrase - so did they feel they had something to show for their support? National Editor Allegra Stratton went to Bolsover to find out.