Chancellor of the Exchequer Rishi Sunak unveils a £30bn stimulus package to help businesses through the coronavirus crisis and offers £600bn of infrastructure spending. Tony McDonough reports
Small businesses in the retail and leisure sectors across the Liverpool city region have been thrown a lifeline from the Government as they battle the effects of the spread of the coronavirus.
Chancellor of the Exchequer Rishi Sunak has unveiled a £30bn stimulus package to help businesses and individuals across the UK through the health crisis. Unveiling a significant loosening of Government’s fiscal restraints, the Chancellor told the House of Commons that the spread of the virus would cause “temporary disruption” to the UK economy.
He said: “We will get through this together. The British people are worried but they are not daunted. There is likely to be a temporary disruption to our economy. For a period, our production capacity will shrink.”
Mr Sunak announced that statutory sick pay will be paid to all those who choose to self-isolate, even if they don’t have symptoms and added that firms with fewer than 250 staff will be refunded for sick pay payments for two weeks.
Small firms will also be able to access “business interruption” loans of up to £1.2m and business rates will be abolished for the current financial year for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000.
This will help leisure businesses who will be hit by both a loss of staff to illness and what is expected to be a significant downturn in consumer spending. There were also measures to help self-employed people get quicker access to benefits.
The chancellor also announced £1bn of lending via a Government-backed loan scheme, with government backing 80% of losses on bank lending. Also, any company eligible for small business rates relief will be allowed a £3,000 cash grant – a £2bn injection for 700,000 small businesses.
There was also good news for Liverpool City Region Metro Mayor Steve Rotheram’s plans to create a “London-style” public transport network as Mr Sunak offered an extra £4.2bn boost for transport funding for the devolved city regions.
Over the course of the five-year parliament, the Government will spend more than £600bn on capital investment in infrastructure – the largest spending commitment of its kind in decades. It will cover road, rail and digital infrastructure and will also see £2.5bn made available to fix potholes.
The Chancellor said: “This is a Budget of a Government that gets things done. The economy is robust and the public finances are sound.” And on the coronavirus crisis, he added: “Life will return to normal. It will be tough but I am confident we will recover… this is a Budget for the future.”
However, analysts, are already asking how the extra spending will be paid for, pointing out that it will almost certainly lead to a big increase in Government borrowing. The Adam Smith Institute said the Government was “spending like drunken sailors”.
Responding to the Budget in the House of Commons, Labour leader Jeremy Corbyn was scathing about the Budget and the Government’s economic record over the past decade. He said: “Today’s measures go nowhere near to undoing the damage that has been done to our economy.
“The extra money for the health service is too little, too late. Our economy is fundamentally weak. Conservative Governments have starved our country of investment for 10 years.”