NERVES OF STEEL... RISHI’S £ 30BN WAR ON VIRUS

As pan­demic is de­clared, Chan­cel­lor de­liv­ers bold bat­tle plan for Bri­tain

Daily Express - - FRONT PAGE - By Macer Hall Po­lit­i­cal Edi­tor

RISHI Su­nak un­veiled an emer­gency £ 30bil­lion blitz to de­fend Bri­tain against the coro­n­avirus yes­ter­day, vow­ing: “We will get through this to­gether.”

On the day the out­break was de­clared a global pan­demic, the Chan­cel­lor held his nerve and used his first Bud­get to hike spend­ing on the NHS and boost growth to min­imise the eco­nomic dis­rup­tion from the health cri­sis.

He poured bil­lions into guar­an­tee­ing sick pay and ben­e­fit pay­ments to pro­tect work­ers while slash­ing busi­ness rates and taxes to keep firms go­ing.

But the pack­age of mea­sures is set to send Gov­ern­ment bor­row­ing soar­ing.

While warn­ing the coun­try to brace for a “sig­nif­i­cant” hit, he in­sisted the im­pact would be tem­po­rary and the econ­omy will bounce back in the medium term.

Mr Su­nak said: “For a pe­riod, it’s go­ing to be tough, but I’m con­fi­dent that our eco­nomic per­for­mance will re­cover.

“The Bri­tish peo­ple may be wor­ried, but they are not daunted.

“We will pro­tect our coun­try and our peo­ple.

We will rise to this chal­lenge.”

Mr Su­nak an­nounced a £ 12bil­lion pack­age of im­me­di­ate mea­sures to pre­pare pub­lic ser­vices and busi­nesses at the peak of the out­break.

It in­cluded an ex­tra £ 5bil­lion for the NHS and other pub­lic ser­vices in an emer­gency re­sponse fund. There is also £ 7bil­lion for help­ing firms and sup­port­ing em­ploy­ees in the face of an out­break that could leave a fifth of the UK work­force too ill to work.

With 460 coro­n­avirus cases and eight deaths in the UK con­firmed, Boris John­son is ex­pected to to­day switch the Gov­ern­ment’s re­sponse from at­tempt­ing to con­tain the out­break to a fo­cus on de­lay­ing the spread.

The Prime Min­is­ter will take the de­ci­sion to move to the sec­ond phase of his ac­tion plan, which could lead to ma­jor pub­lic gath­er­ings be­ing shut down and millions of peo­ple be­ing ad­vised to work from home.

As the Gov­ern­ment pre­pares to ramp up prepa­ra­tions, Mr Su­nak an­nounced fur­ther mea­sures cost­ing £ 18bil­lion this year, in­clud­ing road and rail projects, to boost the econ­omy.

Around 30 mil­lion peo­ple are set to get a tax cut, with a raise in the Na­tional In­sur­ance thresh­old. The in­stant tax cut will put an av­er­age of £ 100 a year in work­ers’ pock­ets from next month.

Of­fi­cials in­sisted the pack­age will help buoy the econ­omy through the health cri­sis, even though the mea­sures were planned be­fore the full ex­tent of the emer­gency was clear.

It came on top of a shock 0.5 per cent cut in in­ter­est rates an­nounced by the Bank of Eng­land early yes­ter­day, tak­ing the base rate back to the his­toric low of 0.25 per cent.

Un­der Mr Su­nak’s emer­gency mea­sures, the Trea­sury will foot the bill for sick pay for up to two mil­lion small and medium- sized busi­nesses to cover the cost of 14- day iso­la­tion pe­ri­ods for staff with coro­n­avirus symp­toms.

Half of the coun­try’s firms will also be spared busi­ness rates for the next year while many small traders will be en­ti­tled to £ 3,000 grants to help them cope with the sus­pected drop in de­mand as con­sumers are forced to stay at home.

To pro­tect the un­der- pres­sure hospi­tal­ity trade, al­co­hol duty was frozen and pubs were given a £ 5,000 busi­ness rate dis­count. The Bud­get also poured £ 1bil­lion into bol­ster­ing the ben­e­fits sys­tem and set­ting up a hard­ship fund to be ad­min­is­tered by lo­cal au­thor­i­ties.

This will pro­tect the most vul­ner­a­ble from the fi­nan­cial im­pact of the out­break.

Job seek­ers will no longer have to go to job cen­tres to be en­ti­tled

to ben­e­fit pay­ments. Mr Su­nak in­sisted his Bud­get would lay the ground­work for long- term pros­per­ity, as well as deal­ing with the short- term health cri­sis.

He said: “This Bud­get de­liv­ers se­cu­rity to­day but it also lays the foun­da­tions for pros­per­ity to­mor­row.” Mr Su­nak also an­nounced a mas­sive splurge on in­fra­struc­ture worth around £ 640bil­lion over the course of the cur­rent par­lia­men­tary term, the big­gest rise in Gov­ern­ment in­vest­ment since 1955.

He in­sisted his mea­sures will de­liver on the Tory gen­eral elec­tion man­i­festo, say­ing: “It is a Bud­get that de­liv­ers on our prom­ises to the Bri­tish peo­ple. It is a Bud­get of a Gov­ern­ment that gets things done.”

MPs lis­tened to Mr Su­nak’s hour- long Bud­get speech in vir­tual si­lence.

Ear­lier, it had been re­vealed that health min­is­ter Na­dine Dor­ries had be­come the first of their num­ber to be in­fected with coro­n­avirus. The Of­fice for Bud­get Re­spon­si­bil­ity, the Gov­ern­ment’s fi­nan­cial watch­dog, warned that Trea­sury bor­row­ing will be £ 125bil­lion higher by the mid­dle of the decade as a re­sult of the Bud­get spend­ing mea­sures.

Trea­sury spend­ing will soar by nearly £ 50bil­lion a year by the mid­dle of the decade as a re­sult of yes­ter­day’s Bud­get, it was said.

Labour leader Jeremy Cor­byn claimed the Bud­get failed to re­verse “the da­m­age that has been done to our coun­try” by aus­ter­ity.

THE BACK­DROP to this year’s Bud­get could hardly have been more daunt­ing. With lethal speed, the coro­n­avirus has wrecked the Gov­ern­ment’s plans for a smooth post- elec­tion state­ment that would pro­pel the econ­omy to­wards the “broad sun­lit up­lands,” to use Win­ston Churchill’s res­o­nant phrase. In­stead, as the pan­demic spreads across the world, the fo­cus had to be on ur­gent mea­sures that can pre­vent a slide into re­ces­sion.

That dan­ger is all too real. To­day’s emer­gency has a dis­turb­ing echo of the 2008 fi­nan­cial crash, re­flected in the de­ci­sion by the in­de­pen­dent Of­fice for Bud­getary Re­spon­si­bil­ity to slash its growth fore­casts for this year. A vast range of busi­nesses in Bri­tain, from the travel in­dus­try to the hospi­tal­ity trade, are now in deep trou­ble.

Share val­ues have been tum­bling on stock mar­kets this week, sup­ply chains are threat­ened, and the num­ber of shop­pers on the high street is plum­met­ing. In an­other in­di­ca­tor of the cri­sis, on the very morn­ing of yes­ter­day’s Bud­get, the Bank of Eng­land an­nounced a dra­matic re­duc­tion in in­ter­est rates to just 0.25 per cent, along­side a move to free up £ 200bil­lion in lend­ing ca­pac­ity.

The threat of an eco­nomic storm made the task of the Chan­cel­lor Rishi Su­nak hard enough. But his dif­fi­cul­ties were com­pounded by the fact that he has been in post for less than a month, fol­low­ing the res­ig­na­tion of his pre­de­ces­sor Sa­jid Javid dur­ing last month’s Cab­i­net reshuf­fle. Rarely in mod­ern po­lit­i­cal history has such a mas­sive bur­den fallen on such an in­ex­pe­ri­enced Trea­sury chief. At the age of just 39, he is the sec­ond youngest Chan­cel­lor of the past cen­tury af­ter Ge­orge Os­borne. In­deed, he has been in Par­lia­ment for just five years and only reached the front rank of Gov­ern­ment last July when was made Chief Sec­re­tary to the Trea­sury.

Yet the per­for­mance that he gave yes­ter­day was a com­mand­ing one which ban­ished any con­cerns about his ma­tu­rity or grasp of policy. As­sured, flu­ent and pur­pose­ful, his was a re­mark­able de­but as Chan­cel­lor. As he out­lined the Gov­ern­ment’s plans to tackle the coro­n­avirus cri­sis and boost pros­per­ity, he showed no signs of nerves, just firm lead­er­ship. At times, while he con­fi­dently reeled off his an­nounce­ments, he looked like a fig­ure who had been in charge of the Trea­sury for a decade rather than a novice. Gone was the slightly ro­botic politi­cian of last De­cem­ber’s Gen­eral Elec­tion cam­paign. In came a min­is­ter who could mix elo­quence with hu­mour.

What was as com­pelling as his de­liv­ery was the scale of his am­bi­tion. He not only promised that the Gov­ern­ment would rise to the chal­lenge of the coro­n­avirus by “act­ing in the na­tional in­ter­est”, but he also set out a clear vi­sion of a flour­ish­ing econ­omy, where the ex­panded state would play a cen­tral role through en­hanced pub­lic ser­vices and a rev­o­lu­tionised civic in­fra­struc­ture. Aus­ter­ity is now over, as he pledged the big­gest sus­tained in­vest­ment by the state in 50 years.

In a sense, it was lucky for the Gov­ern­ment that Sa­jid Javid re­signed in Fe­bru­ary, for Rishi Su­nak is a far more im­pres­sive fig­ure, with a much greater au­thor­ity. In the words of the re­spected Tory MP Tom Tu­gend­hat, Su­nak “is his own man and a nat­u­ral leader.” As a wealthy for­mer City banker and hedge fund man­ager, ed­u­cated at pri­vate school and Ox­ford, the new Chan­cel­lor might ap­pear a very tra­di­tional Tory. But, he is also a very mod­ern politi­cian, em­body­ing the chang­ing na­ture of Bri­tain in his mod­est back­ground as the son of mi­grants.

‘ As­sured, flu­ent and pur­pose­ful, a re­mark­able de­but as Chan­cel­lor’

HIS FA­THER was a GP, his mother a phar­ma­cist, and he re­tains his Hindu faith, as high­lighted when he took the oath as a new MP on the Bha­gavad Gita, the sa­cred San­skrit text. He is also tee­to­tal, which meant that he re­frained from drink­ing at the dis­patch box yes­ter­day, un­like many of his pre­de­ces­sors. Ken­neth Clarke used to have a brandy, while Glad­stone had a sherry mixed with a beaten egg.

When in­tro­duc­ing his Bud­get in 1853, Glad­stone spoke for more than four hours. Su­nak ad­dressed the House for only an hour, but he packed a huge amount of ma­te­rial into that speech. The cen­tre­piece of his state­ment was his mas­sive plan to deal with the con­se­quences of the virus. “We will do right by you and your fam­ily,” he de­clared and the scale of the emer­gency pack­age lived up to the pledge. Al­to­gether, the fis­cal stim­u­lus he pro­posed amounted to a colos­sal £ 30bil­lion, a sum that com­pares to the £ 12bil­lion post- crash scheme im­ple­mented by the last Labour Gov­ern­ment in 2008. “What­ever re­sources the NHS re­quires, it will get,” he said, as he re­vealed a £ 5bil­lion emer­gency re­sponse fund.

To pro­tect firms in the wake of fall­ing de­mand, he is to in­tro­duce 100 per cent busi­ness rate relief for venues like the­atres, restau­rants and guest houses whose prop­er­ties have a rate­able value of less than £ 51,000. It is a bold move that will mean half of all busi­nesses will pay no rates at all this year while, at a cost of £ 2bil­lion, there is also to be a £ 3,000 spe­cial grant for 700,000 small firms. To help em­ploy­ees af­fected by the virus, the Gov­ern­ment will bring in more gen­er­ous rules on statu­tory sick pay and wel­fare ben­e­fits, as well as a £ 500mil­lion hard­ship fund for lo­cal au­thor­i­ties.

Mit­i­gat­ing the con­se­quences of the virus

was the Chan­cel­lor’s top pri­or­ity, but he also ex­pressed his de­ter­mi­na­tion to boost pros­per­ity over the longer- term. As promised in the Con­ser­va­tives’ man­i­festo, liv­ing stan­dards will be raised by an in­crease in the thresh­old for na­tional in­sur­ance from £ 8,632 to £ 9,500 from April, which will ef­fec­tively give 30 mil­lion work­ers a £ 100- a- year tax cut. Along with con­tin­u­ing freezes on al­co­hol du­ties and petrol taxes, there will also be a sig­nif­i­cant rise in the liv­ing wage to £ 10.50- an- hour, prompt­ing Su­nak to boast that the “Con­ser­va­tives are the real work­ers’ party.”

He also wants to paint them as the party of the re­vived pub­lic sec­tor, with more money for ed­u­ca­tion and the NHS. Ge­orge Os­borne used to mea­sure his suc­cess by how much he had cut the fis­cal deficit. Rishi Su­nak now trum­pets that day- to- day Gov­ern­ment spend­ing will be £ 100bil­lion higher by the end of this Par­lia­ment. Among all this largesse, an ex­tra £ 6bil­lion- a- year is to be poured into the health ser­vice by the end of this Par­lia­ment, en­abling the re­cruit­ment of 50,000 more nurses and the con­struc­tion of 40 new hos­pi­tals. There is also to be more sup­port for so­cial hous­ing and tack­ling home­less­ness, partly funded by a stamp duty sur­charge for for­eign buy­ers.

LIKE THE Prime Min­is­ter, the Chan­cel­lor yes­ter­day re­vealed him­self to be an en­thu­si­ast of in­fra­struc­ture spend­ing. In­deed, af­ter years of re­straint, the taps on in­vest­ment by the Gov­ern­ment are to be opened wide, with ex­tra cap­i­tal ex­pen­di­ture go­ing up by an an­nual £ 120bil­lion- a- year to a to­tal of £ 600bil­lion over the next five years. As well as huge rail projects like HS2, there will be an­other £ 5.2bil­lion for flood de­fences, £ 5bil­lion for broad­band, £ 27bil­lion for im­prove­ments to the road net­work and £ 2.5bil­lion of pot­hole re­pairs, a vi­tal task since de­fec­tive sur­faces are es­ti­mated to ac­count for 9,500 ac­ci­dents a year. Sci­ence re­search, ex­port loans and busi­ness start- ups are also to be bol­stered by new cap­i­tal in­vest­ment.

Amidst this gen­eros­ity, there was one glar­ing omis­sion: the Chan­cel­lor made no men­tion of so­cial care, de­spite the Prime Min­is­ter’s pre- elec­tion pledge of ac­tion to fix the bro­ken sys­tem. Given the ex­tent of ne­glect, it can only be hoped that this prob­lem will be ad­dressed in the au­tumn state­ment. There must also be con­cerns as to how the Gov­ern­ment will pay for all his fis­cal ex­pan­sion over the long term. The Tories used to be the party of sound fi­nance, but de­spite Su­nak’s dec­la­ra­tion that “we will al­ways act re­spon­si­bly”, the con­cept of prudence was given lit­tle pri­or­ity. He did put for­ward some mi­nor changes to in­crease tax rev­enues, like a re­duc­tion in En­trepreneur­s’ relief and the phased with­drawal of diesel sub­si­dies for cer­tain com­mer­cial ve­hi­cles. But most of the new ex­pen­di­ture will have to be met by mas­sive in­creases in bor­row­ing by the state. That might be af­ford­able now at a time of low in­ter­est rates, but in the long term, bal­loon­ing pub­lic debts can spell dis­as­ter, as the 2008 crash proved.

Yet the re­al­ity is that we are liv­ing in ex­cep­tional times due to the global pan­demic. Un­prece­dented steps are re­quired if our econ­omy is not to buckle. De­fy­ing his in­ex­pe­ri­ence, the Chan­cel­lor proved yes­ter­day that he is a sure hand at the helm.

‘ As well as huge rail projects there will be bil­lions for flood de­fences and road­works’

Pic­tures: UKPARLIAME­NT/ JES­SICA TAY­LOR; PIXEL8000

Pats on the back... Praise for Rishi as Boris ap­pears to chan­nel Churchill

Pic­ture: PA

BAT­TLE PLAN: Chan­cel­lor Rishi Su­nak holds up his red Bud­get Box in Down­ing Street yes­ter­day be­fore head­ing to the Com­mons

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