Chancellor Rishi Sunak admitted “it’s going to be tough” to cope with the hit to the economy from the coronavirus crisis, but insisted the UK “will get through this” as he unveiled his first Budget.
Mr Sunak announced a £30bn stimulus package to ease the impact of the virus, cutting small business rates to zero. He pledged a £500m boost for the benefit system to help gig economy workers hit by the outbreak – but stopped short of demands to extend statutory sick pay to all.
It comes as junior health minister Nadine Dorries revealed she tested positive for Covid-19 after falling ill on Friday. Amid calls for parliament to be closed, a No 10 source said Boris Johnson is not being tested – despite having attended an event with Ms Dorries last week.
UK debt to top £2 trillion as government spending 'resembles' Gordon Brown's
Britain’s debt is set to crash through the £2 trillion barrier as the government’s spending splurge starts to “resemble” Gordon Brown’s, the Treasury watchdog says.
In a verdict that will alarm many Tories, the Office for Budget Responsibility (OBR) said economic policy now mirrored Labour’s in the run-up to the financial crash – but with greater risks.
Boris Johnson’s Budget plans – £175bn for infrastructure over five years, plus a short-term £30bn injection to protect against coronavirus – were “sustainable” if borrowing costs remained rock-bottom, it said.
Britain’s debt is set to crash through the £2 trillion barrier as the government’s spending splurge starts to “resemble” Gordon Brown’s, the Treasury watchdog says.
In a verdict that will alarm many Tories, the Office for Budget Responsibility (OBR) said economic policy now mirrored Labour’s in the run-up to the financial crash – but with greater risks.
Boris Johnson’s Budget plans – £175bn for infrastructure over five years, plus a short-term £30bn injection to protect against coronavirus – were “sustainable” if borrowing costs remained rock-bottom, it said.
Treasury figures from Budget confirm there was no £350m a week Brexit dividend
The Treasury has confirmed that it will not be getting an extra £350 million a week after Britain stops paying into the EU budget, despite false claims by Brexiteers during the referendum.
Britain is in fact expected to be overall poorer by £1,200 per person because of Brexit's economic drag, according to the government's spending watchdog.
The chancellor's red budget book shows the gross EU contributions saved by the UK will be around £42 billion over the next five years, rather than the £91 billion claimed under the false figure publicised by Boris Johnson in 2016.
But the money is not expected to benefit the public finances as the majority needs to be spent on British domestic replacements for EU programmes.
The Treasury has confirmed that it will not be getting an extra £350 million a week after Britain stops paying into the EU budget, despite false claims by Brexiteers during the referendum.
Britain is in fact expected to be overall poorer by £1,200 per person because of Brexit's economic drag, according to the government's spending watchdog.
The chancellor's red budget book shows the gross EU contributions saved by the UK will be around £42 billion over the next five years, rather than the £91 billion claimed under the false figure publicised by Boris Johnson in 2016.
But the money is not expected to benefit the public finances as the majority needs to be spent on British domestic replacements for EU programmes.
Theresa May urges 'restrain and caution' over Budget
Former PM Theresa May has urged Boris Johnson to show "restrain and caution" after the billions of investments were detailed in the Budget today.
Former PM Theresa May has urged Boris Johnson to show "restrain and caution" after the billions of investments were detailed in the Budget today.
The former prime minister said she hoped the "necessary tension" between 10 Downing Street and the Treasury existed in their talks, and urged her party to stick to their desire for "sound management" of public finances, despite other temptations.
She added it was "essential" for any Conservative government to maintain such an approach, and explained how the fiscal rules help exercise restraint on the "temptation to reckless decisions" on public spending and borrowing.
Mrs May commended new Chancellor Rishi Sunak for the "difficult" Budget he had to deliver, given the coronavirus outbreak. She told MPs: "I trust in the discussions that were held prior to the delivery of the Budget, that there was the necessary tension between No 10 and the Treasury in developing this Budget.
"Generally speaking, prime ministers want to spend money and chancellors want to manage the public finances prudently."
Tory former chancellor Sajid Javid, sitting behind Mrs May, could be heard joking: "So true."
She added it was "essential" for any Conservative government to maintain such an approach, and explained how the fiscal rules help exercise restraint on the "temptation to reckless decisions" on public spending and borrowing.
Mrs May commended new Chancellor Rishi Sunak for the "difficult" Budget he had to deliver, given the coronavirus outbreak. She told MPs: "I trust in the discussions that were held prior to the delivery of the Budget, that there was the necessary tension between No 10 and the Treasury in developing this Budget.
"Generally speaking, prime ministers want to spend money and chancellors want to manage the public finances prudently."
Tory former chancellor Sajid Javid, sitting behind Mrs May, could be heard joking: "So true."
Brexit trade talks set to be shelved due to outbreak, Gove reveals
The next round of post-Brexit trade talks is likely to be shelved because of the coronavirus crisis, Michael Gove has revealed.
The government has received “indications today” that the EU wants to postpone the negotiations – scheduled to start in London on 18 March – MPs were told.
Calling it “a live question”, the minister overseeing the talks said: “We were looking forward to the joint committee meeting in the UK on the 18th of this month and, obviously, the next stage.
The next round of post-Brexit trade talks is likely to be shelved because of the coronavirus crisis, Michael Gove has revealed.
The government has received “indications today” that the EU wants to postpone the negotiations – scheduled to start in London on 18 March – MPs were told.
Calling it “a live question”, the minister overseeing the talks said: “We were looking forward to the joint committee meeting in the UK on the 18th of this month and, obviously, the next stage.
Budget endangers net zero climate target
The Budget unveiled by the Government on Wednesday makes it harder rather than easier for the UK to meet its net zero carbon climate target, academics and environmentalists have warned.
Chancellor Rishi Sunak was accused of undermining the goal – set by Theresa May just nine months ago – after he froze fuel duty yet again, adding to a mounting £50 billion cost of the policy since 2011.
As well as making it even cheaper to drive compared to ever-rising public transport fares, the chancellor announced a £27 billion, 4,000 mile road building programme compared to just £1 billion for green transport.
The Budget unveiled by the Government on Wednesday makes it harder rather than easier for the UK to meet its net zero carbon climate target, academics and environmentalists have warned.
Chancellor Rishi Sunak was accused of undermining the goal – set by Theresa May just nine months ago – after he froze fuel duty yet again, adding to a mounting £50 billion cost of the policy since 2011.
As well as making it even cheaper to drive compared to ever-rising public transport fares, the chancellor announced a £27 billion, 4,000 mile road building programme compared to just £1 billion for green transport.
£1.5bn for further education ‘not enough’, says union
The chancellor earlier pledged £1.5bn of new capital over five years to improve the further education college estate.
But Geoff Barton, general secretary of the Association of School and College Leaders, has warned the pledges are not enough to reverse the “devastating cuts to courses, extra-curricular provision and student support” over the past few years.
He added: “We are particularly concerned about the situation in post-16 education where the funding rate per student remains a long way short of what is needed, and in special educational needs provision which desperately needs more investment beyond that already announced by the government.”
No comfort for self-employed if they need to self-isolate
The dense raft of measures introduced today will undoubtedly be a relief to many employees trying to work out how on earth they financially navigate the next few months of uncharted Covid-19 territory, writes our money editor Kate Hughes.
With various announcements on statutory sick leave, temporary loosening of certain benefits eligibility criteria and the promise that we can all stay abreast of the digital news thanks to various tax freezes and cuts, it was clear that Rishi Sunak had put a series of substantial personal finance and tax reforms on ice to deliver this extraordinary Budget.
Of those he did reveal, the increase in the lower earnings limit for National Insurance Contributions will mean a small net pay increase for the majority of workers, a nice reassurance at a time like this, alongside this week’s announcements by the banking sector that lenders will ease certain rules on debt repayments and charges for those directly caught up in the virus crisis.
The UK’s 5 million self-employed workers may feel more isolated than ever though, as there was no mention of how they would cover the cost of self-isolation, despite earlier hints from the PM.
And hopes were dashed that the controversial IR35 tax changes, which would alter the status of a huge number of self-employed workers making them more difficult and expensive for businesses to employ – would be cancelled.
Chancellor commits to fund removing ‘all unsafe cladding’ from tall buildings
A £1bn fund will pay for the removal of “all unsafe combustible cladding” from high-rise buildings following the Grenfell tragedy, the chancellor promised.
Rishi Sunak bowed to pressure to go further than stripping out only the aluminium composite material (ACM) covering placed around the London tower block, where 72 people died.
The new cash would “make sure all unsafe combustible cladding will be removed from every private and social residential building above 80 metres high”, he told MPs.
Labour’s shadow housing secretary John Healy had earlier called on the government to “end the cladding scandal”.
Government pledges £1bn fund to remove 'all unsafe' cladding after Grenfell tragedy
Chancellor bows to pressure to go further than stripping out only aluminium composite material (ACM) coveringCorbyn says spending splurge ‘smoke and mirrors’ – after £600bn infrastructure plan unveiled
More now on the £640bn boost for infrastructure spending over the next five years announced by Rishi Sunak as he turned on the spending taps.
The new chancellor laid out plans for a hundreds of billions of pounds of capital spending on roads, rail, broadband, housing and research by 2025.
But Labour dismissed the government claim that the spending hike was the highest since 1955 as a “sleight of hand” - and pointed to the “slash and burn assault” on services and economic infrastructure by the Tories since 2010.
Jeremy Corbyn responded: “Amid a blizzard of hype, he's claiming today marks the biggest capital injection since the 1950s, but this is actually all smoke and mirrors.”
Chancellor turns on spending taps in Budget with pledge for £600bn infrastructure boost
But Labour says claims it was biggest investment since 1950s was 'sleight of hand'‘Ten years too late’: Unions attack Budget – and call for further measures on sick pay
Tim Roache, general secretary of the GMB union, has responded to the Budget by calling for an expansion in statutory sick pay.
Rishi Sunak said statutory sick pay would available for all of those advised to self-isolate during the outbreak, even if they do not have symptoms. But this will not extend to zero hours workers or those who are self-employed.
Roache said: “There’s nowhere near enough in the Budget to help working people who have to self-isolate - the government can dress it up however they want.”
He added: “Statutory sick pay is £18 per day, no one can live on that, and that’s what the government seem to expect the 20 per cent of the population who may have to self-isolate to do. If it’s possible, let’s see ministers do it.”
“Coronavirus has highlighted the abysmal state of sick pay in this country. This Budget was an opportunity for the government to right a wrong, but typically they've completely ignored it.”
Grahame Smith, general secretary of the Scottish TUC, said: “The Tory party has finally accepted what people have known for years - investing in infrastructure and public services is good for the economy … Ten years too late.”
Business groups welcome ‘box office’ Budget
Leaders of several business groups have welcomed many of the measures announced by the Chancellor, one calling it a “box office Budget”.
But unions were more critical, saying the extra spending announced did not compensate for the years of cuts and under investment, especially in public services.
Jonathan Geldart, director general of the Institute of Directors, said: “This was a box-office Budget. Given the circumstances, the chancellor had to be bold, and he came through for business today.
“With the coronavirus outbreak threatening a cashflow crunch, measures to cut costs and support loans to businesses are on the money. Wider reliefs around business rates and job taxes will also buoy firms as they look to weather Covid-19’s implications.”
Mike Cherry, chairman of the Federation of Small Businesses, said: “This is a pro-small business Budget, which has delivered a high streets bonus, a series of Conservative manifesto promises to small businesses, and emergency steps to support small firms through the coronavirus outbreak.”
Union for parliament staff calls for ‘measures short of full closure’
Garry Graham, deputy general secretary of the Prospect union for staff in parliament, said they were seeking “urgent clarification from the Leader of the House” about action being taking to protect employees.
Graham added: “While we understand the reluctance to shut the House at this stage, we think measures short of a full closure may be appropriate at this time. In particular we ask that the option of closing the Houses of Parliament to visitors be considered.
“Dedicated House staff will do all they can to ensure the machinery of democracy continues to function but they need to hear that reasonable steps are being taken to protect their well-being.”
