All eyes on how the Chancellor responds

Sunak’s Budget package to tackle economic toll of coronavirus must be imaginative and targeted

There’s a new Chancellor in 11 Downing Street, although – amid the tumult of coronavirus – it’s understandable if some of us have forgotten.

Following Sajid Javid’s resignation, Rishi Sunak must present a UK Budget which delivers on the Conservative election manifesto while tackling the unfolding coronavirus economic crisis.

Not since Kate Forbes had to deliver the SNP budget following Derek Mackay’s sudden resignation has a Chancellor had so little time to prepare.

But against an ever-changing health picture, Mr Sunak must put short-term measures to support the economy ahead of longer-term post-brexit plans. Put simply, the “levelling up” agenda and any wider reshaping of the economy must be postponed for now.

The Office for Budget Responsibility was expected to downgrade UK growth prospects even before the coronavirus hit, as weaker global growth and Brexit uncertainty dampen activity.

Now the Organisation for Economic Cooperation and Development has warned that global growth could halve in 2020.

The fears for business – especially small business – are real. Employee illness, travel bans, pressure on supply chains, cancelled events and cashflow problems could send hundreds of Scottish businesses into a loss-making position. In other words, supply and demand will be affected.

Mr Sunak has already said he is looking at “options to provide temporary support to small businesses”. This could include lowering business taxes, tax holidays and loans. These must be imaginative and targeted.

Alongside this he must give the NHS all the support it needs to tackle the virus, which in Italy has resulted in radical measures to contain the outbreak, including putting up to 16 million people under quarantine rules. Heath professionals in Italy have already warned Europe to “get ready”.

The price tag on this Budget could be significant, adding billions to public borrowing. But right now the UK cannot afford for otherwise healthy businesses to go to the wall because of the effects of the coronavirus.

Shadow chancellor John Mcdonnell said Mr Sunak’s debut on Wednesday would be “the most important Budget since the Second World War”. He just might be right.