Daily Mail

DR FEEL­GOOD TO THE RES­CUE

New Tory star’s £30bn tonic to fight virus fall­out Cash for sick work­ers ++ Shops’ taxes slashed Big­gest Bud­get splurge in 30 years to boost Bri­tain

-

RISHI Su­nak gave the econ­omy a £ 30bil­lion vac­ci­na­tion against the coro­n­avirus yes­ter­day. In an as­sured Bud­get de­but as Chan­cel­lor, he pledged to do ‘what­ever By Ja­son Groves Po­lit­i­cal Edi­tor it takes’ to help busi­nesses, work­ers and the NHS. He also promised an ex­tra £175bil­lion to trans­form UK in­fra­struc­ture.

To fight what is now of­fi­cially a global pan­demic, hos­pi­tals are be­ing handed £5bil­lion while thou­sands of firms will be given a busi­ness rates hol­i­day to help avert the risk of bank­ruptcy.

Sick pay will be re­formed to en­sure that em­ploy­ees are not pe­nalised for go­ing into quar­an­tine.

The Chan­cel­lor de­clared: ‘We are do­ing ev­ery­thing we can to keep this coun­try, and our peo­ple, healthy and fi­nan­cially se­cure.’

His pack­age came as the Bank of Eng­land’s base rate was slashed to a his­toric low of just 0.25 per cent.

Boris John­son is ex­pected to con­firm to­day that the UK is switch­ing from

a strat­egy of try­ing to con­tain the out­break to one of try­ing to de­lay its worst ef­fects in order to give the NHS more time to cope. The Prime Min­is­ter – one of whose Cab­i­net min­is­ters went into self-iso­la­tion last night – is also likely to an­nounce a range of so­cial-dis­tanc­ing mea­sures.

Mr Su­nak ad­mit­ted yes­ter­day that the epi­demic was now likely to cause ‘tem­po­rary dis­rup­tion to the econ­omy’, with millions of work­ers hav­ing to take time off sick, firms strug­gling with sup­ply prob­lems and shops and restau­rants hit by a dra­matic fall in trade.

‘The com­bi­na­tion of those ef­fects will have a sig­nif­i­cant im­pact on the UK econ­omy,’ he said. ‘But it will be tem­po­rary. Peo­ple will re­turn to work.

‘Sup­ply chains will re­turn to nor­mal. Life will re­turn to nor­mal. For a pe­riod, it’s go­ing to be tough. But I’m con­fi­dent that our eco­nomic per­for­mance will re­cover.’

The emer­gency pack­age, which was fi­nalised in the early hours of yes­ter­day, over­shad­owed a se­ries of mas­sive spend­ing de­ci­sions that set the Gov­ern­ment’s eco­nomic course for the next four years.

Mr Su­nak pledged to in­crease to­tal spend­ing by 22 per cent by 2024, tak­ing the size of the state to more than £1tril­lion for the first time. Much of the spend­ing will be fu­elled by bor­row­ing, with the na­tional debt now on track to top £2tril­lion by the time of the next elec­tion.

It will fund a huge in­fra­struc­ture spend­ing pro­gramme, with more money for roads, rail, broad­band, sci­ence, hous­ing and even pot­holes. Trea­sury rules that have favoured Lon­don and the South East will be torn up to en­sure in­vest­ment is spread out across the coun­try.

The Of­fice for Bud­get Re­spon­si­bil­ity said it was the ‘largest sus­tained fis­cal loos­en­ing’ since Nor­man La­mont’s pre-elec­tion give­away of 1992.

The OBR said the ‘ strik­ing turn­around’ meant that the aus­ter­ity cuts of the last decade would be ‘en­tirely re­versed’ by the next elec­tion.

While some Con­ser­va­tive MPs voiced dis­quiet at the scale of the spend­ing, one se­nior Tory said the Bud­get en­cap­su­lated Mr John­son’s phi­los­o­phy of ‘boos­t­er­ism’.

‘Peo­ple have asked what boos­t­er­ism means,’ the source said. ‘This is what it means – in­vest­ing in the econ­omy, in all parts of the coun­try, in order to level up op­por­tu­nity and take this coun­try for­ward.’

One of the most sig­nif­i­cant Bud­gets for years con­firmed a rise in the thresh­old for pay­ing na­tional in­sur­ance that de­liv­ers an im­me­di­ate £100 tax cut for 31mil­lion work­ers.

There were also freezes on fuel and al­co­hol du­ties, £27bil­lion for road- build­ing and £5.2bil­lion for flood de­fences.

The OBR yes­ter­day warned that the coro­n­avirus could lead to a pro­longed slow­down, adding: ‘Re­ces­sion this year is quite pos­si­ble if the spread of coro­n­avirus causes wide­spread eco­nomic dis­rup­tion.’ Mr Su­nak said he was ready to make fur­ther in­ter­ven­tions to en­sure that good busi­nesses were not driven to the wall.

He said yes­ter­day’s £30bil­lion pack­age com­prised £12bil­lion of di­rect spend­ing and £18bil­lion of broader stim­u­lus to the econ­omy.

‘While the world may slow down, we will act here with a re­sponse that is brave and bold, tak­ing de­ci­sions now for our fu­ture pros­per­ity,’ the Chan­cel­lor added. ‘ We are in­vest­ing in world class in­fra­struc­ture, and to lead the world in the in­dus­tries and tech­nolo­gies of the fu­ture.’

Mr Su­nak said the ‘cen­tral de­ci­sion’ was to in­crease spend­ing over ex­ist­ing plans by £175bil­lion.

The over­all tax bur­den will not rise, mainly be­cause of a de­ci­sion to aban­don a cut in cor­po­ra­tion tax. The Trea­sury ad­mit­ted the spend­ing might not meet ear­lier fis­cal rules.

Some se­nior Tories voiced reser­va­tions. Theresa May said the Con­ser­va­tives must never fall into Labour’s trap of be­liev­ing that all prob­lems could be fixed by un­con­strained spend­ing.

The for­mer prime min­is­ter added: ‘While spend­ing a lot of money may be pop­u­lar and may seem the nat­u­ral thing to do, there is of course that ne­ces­sity of hav­ing a re­al­is­tic assess­ment of the longer-term im­pact.

‘[There is] a ne­ces­sity to en­sure that we have that re­straint and cau­tion that en­ables us to make sure the pub­lic fi­nances con­tinue to be strong into the fu­ture.’

AT the Com­mons despatch box yes­ter­day, a new star en­tered the Tory fir­ma­ment.

Be­ly­ing the fact that he was pro­pelled into the job of Chan­cel­lor just a month ago, Rishi Su­nak de­liv­ered his cri­sis Bud­get with all the panache, wit and pas­sion of a sea­soned per­former.

If the new boy had nerves, they cer­tainly didn’t show. It was a bravura per­for­mance to match the se­ri­ous­ness of the mo­ment.

For while there was plenty in it to show Mr Su­nak’s de­ter­mi­na­tion to ‘boos­t­erise’ Bri­tain, this will be re­mem­bered as the Coro­n­avirus Bud­get.

Any­one who feared the Gov­ern­ment was un­der­es­ti­mat­ing the virus threat was quickly dis­abused. With a dy­namic £30bil­lion pack­age of emer­gency mea­sures, Mr Su­nak showed he had no reser­va­tions about throw­ing money at the prob­lem.

Busi­ness rates scrapped for small firms and high street shops, cafes, mu­se­ums and cin­e­mas.

A plethora of cheap loans and ex­tended credit. A blank cheque for the NHS. Sick pay re­funds, ben­e­fits de­liv­ered more quickly, cash grants, Na­tional In­sur­ance cuts for all, a £500mil­lion hard­ship fund to help the vul­ner­a­ble.

And on top of all that, the Bank of Eng­land cut its in­ter­est rate to a mi­nus­cule 0.25 per cent, sig­nalling cheaper bor­row­ing costs for both busi­nesses and fam­i­lies.

Short of com­ing up with a vac­cine, it’s hard to see what more Mr Su­nak could have done. He was Dr Feel­good in ac­tion.

But this was a Bud­get of two very dis­tinct halves. Af­ter pre­sent­ing a short-term cure for the virus, he laid out his pre­scrip­tion for Bri­tain’s long-term pros­per­ity.

And what a spend­ing spree it is – the big­gest since 1992. More than £600bil­lion on in­fra­struc­ture over five years, fuel and al­co­hol duty frozen, £2.5bil­lion for pot­holes.

Money for fur­ther ed­u­ca­tion and for home­less­ness, rates re­duc­tions for pubs, fund­ing for hi- tech re­search and devel­op­ment, broad­band and for re­mov­ing Gren­fell-style cladding from tower blocks.

There was a nod to the ‘Red Wall’, with ex­tra fund­ing for North­ern cities, thou­sands of civil ser­vants mov­ing out of Lon­don and ex­tra bil­lions for re­gional trans­port.

The green lobby, too, was thrown a bone. Mr Su­nak an­nounced huge tree-plant­ing and peat bog restora­tion pro­grammes, a wel­come levy on un­re­cy­clable plas­tic and tax hikes on some pol­lut­ing fu­els.

Above all, this was a Bud­get which em­phat­i­cally sig­nalled the end of aus­ter­ity. How­ever, it comes at a price.

The Of­fice for Bud­get Re­spon­si­bil­ity, while gen­er­ally pos­i­tive, points out that most of this pub­lic spend­ing splurge will have to be funded by bor­row­ing.

It’s true that in­ter­est rates are at a his­toric low, so bor­row­ing has never been eas­ier or cheaper. Yet that doesn’t al­ter the fact that by 2025 our na­tional debt is ex­pected to top £2tril­lion for the first time.

This pa­per has al­ways be­lieved we must pay our own way in the world. Slash­ing the deficit and get­ting a grip on the over­all debt moun­tain has ar­guably been the great­est eco­nomic achieve­ment of the last decade. It must not be ca­su­ally thrown away. But Boris John­son promised an in­vest­ment and in­fra­struc­ture rev­o­lu­tion to un­leash Bri­tain’s po­ten­tial, ‘level up’ the re­gions and launch our coun­try into the post-Brexit world.

This Bud­get, pre­sented with brio by his young dis­ci­ple, is his vi­sion for a freer, more pros­per­ous One Na­tion fu­ture.

So yes, he will have to en­sure that spend­ing doesn’t spi­ral out of con­trol, es­pe­cially on HS2. Waste must be ruth­lessly rooted out and bor­row­ing kept within rea­son­able lev­els.

But just four months ago, the Bri­tish peo­ple gave Boris a pow­er­ful man­date for rad­i­cal change. This is the blue­print for that change. He is keep­ing his word.

 ??  ??

Newspapers in English

Newspapers from UK