Chancellor Rishi Sunak (pictured in Downing Street this week) is preparing to pump billions of pounds into the NHS and business in a ‘coronavirus Budget’ tomorrow
Chancellor Rishi Sunak will unveil a stripped-back Budget tomorrow with money for flood defences, faster broadband and tougher community sentences.
The coronavirus crisis is set to be the main focus of the Chancellor’s first financial package, with fears it could deal a hammer blow to the economy.
Alongside cash injections to help business and prop up the NHS, there are rumours of an emergency cut to interest rates.
However, Mr Sunak will be keen to show the government is still getting on with implementing its agenda – with money being earmarked to bolster law and order, upgrade flooding defences.
There will be a £5billion expansion of a scheme that offers loans to overseas buyers of UK exports, as part of a post-Brexit drive.
Mr Sunak must also decide whether to provoke what could be a brutal backlash from Tory MPs by announcing a rise in fuel duty.
But there are mounting expectations he will instead choose to push ahead with cuts to national insurance, which could benefit millions of workers and help keep UK plc ticking over if there is a major outbreak.
Just a month after he entered No10 in the wake of Sajid Javid’s dramatic resignation, Mr Sunak must walk a tightrope between honouring Tory election promises and bracing UK plc for what could be a very bumpy ride.
The minister has been forced to tear up previous plans, with extra resources likely to be needed for GPs and hospitals to deal with rising coronavirus infections.
Tory MPs have warned the Chancellor that hiking fuel duty in the Budget could hurt the NHS while it is under strain dealing with the coronavirus outbreak (file picture)
Flooding devastation was still very much in evidence in Goole, Yorkshire at the weekend
Meanwhile, companies – particularly smaller ones – will need help to stay afloat amid warnings from experts that up to a fifth of the workforce could be off sick at the peak of an outbreak.
Mr Sunak’s predecessor Philip Hammond warned this morning that the government must provide support to stop a ‘significant’ but temporary setback for the economy turning into permanent damage.
Stock markets have been plummeting on fears over coronavirus and an oil price war between Russia and Saudi Arabia.
At the weekend, Mr Sunak insisted he is ready to deliver ‘whatever action is required’ to deal with the Covid-19 outbreak, and has pledged to give the NHS the resources it needs to respond.
He also vowed to give smaller businesses ‘short-term’ support to weather the outbreak, saying he wants to provide a ‘bridge through a temporary period of difficulty so that they can emerge on the other side’.
However, he has refused to say whether he would adhere to the fiscal rules – parameters to limit tax and spend excesses – in the first Budget of the new Government.
The Conservative manifesto for the election stated the party would not borrow to fund day-to-day spending and would ensure debt is lower in five years’ time.
Speculation has been mounting that the Bank of England will cut interest rates by 0.25 per cent at its regular meeting later this month.
But traders are also pricing in a rising possibility that there could be another cut sooner – potentially as early as tomorrow to coincide with the Budget.
Mr Javid is thought to have been planning for a sharp rise in the national insurance threshold from £8,632 to £9,500 from next month.
That would mean a average family with two earners a tax cut of about £192 a year.
Italians pack supplies of groceries into overloaded shopping trolleys at a supermarket in Rome this morning as they prepare for a weeks-long quarantine after Italy’s lockdown was extended nationwide
Chancellor vows £100m to make streets safer in Budget
Rishi Sunak will use tomorrow’s Budget to ‘toughen up community sentences’ to make Britain’s streets safer.
The Chancellor will set aside £100million to bolster the probation service and support victims of rape and sexual assault.
Convicted criminals released from prison on licence half-way through their sentences will face tighter constraints, including stricter curfews.
And offenders known to commit crimes after drinking will be fitted with so-called ‘sobriety tags’, which monitor their location and sample skin perspiration to determine whether they have consumed alcohol.
Last night Mr Sunak promised ‘new funding to toughen up community sentences, crack down on domestic abuse and provide victims with the support they need’, as a cross-party group of MPs called for a major investment in youth services to help prevent knife crime and protect children from a life of crime and violence.
Mr Sunak is also expected to pledge £9million to tackle fly-tipping and double cash for flood defences to £5.3billion.
Last week the Treasury announced that Mr Sunak will commit to new laws to protect the future of cash as free-to-use ATMs disappear from the high street. Another £5billion will be set aside for faster broadband across the country by 2025.
Mr Sunak will also announce that disabled people will benefit from a £30million investment in fully accessible public toilets, while the ‘tampon tax’ – VAT on sanitary products – will be abolished in 2021.
Ministers pledge £5billion of loans to boost post-Brexit exports
The Chancellor is preparing to boost post-Brexit exports for UK businesses by making £5billion of loans available in his forthcoming Budget.
Rishi Sunak is set to hand over £5billion to UK Export Finance (Ukef), the Government’s export credit agency that provides loans to overseas buyers of British goods and services.
The Treasury said the money would help UK exporters to increase their global sales as Britain prepares for life outside the European Union, with the Chancellor helping to top up the purchasing power of those abroad by providing a competitive loan rate through Ukef.
The agency’s role is to ensure exports do not fail due to a lack of available finance or insurance for those looking to buy up Britain’s export offers.
It will be the largest increase ever handed to the Ukef, taking its lending power up from £3billion to £8billion.
As negotiations with the EU’s Michel Barnier (pictured) continue, the Chancellor is preparing to boost post-Brexit exports for UK businesses by making £5billion of loans available
Due to give his first Budget on Wednesday, Mr Sunak said: ‘This decade will provide even more opportunities for British businesses to export and trade with new partners across the world.
‘The Government will support business to seize these opportunities and thrive on the world stage.
‘This package – which is the highest level of export lending the Government has ever made available – will provide support to industries and regions across the country.’
From the £5billion pot being made available, £2billion will be offered for exports that encourage green growth while £1 billion will be set aside for defence industry purchases, Number 11 confirmed.
As part of the extra funding, foreign investors hoping to start a business in the UK are also expected to have their visa applications supported by the Department for International Trade.
Britain’s flood defences bolstered with £5billion after storm misery
Britain’s flood-battered regions are to receive a £5billion boost in this week’s Budget as Boris Johnson’s Government ramps up its spending on high-profile infrastructure projects.
Chancellor Rishi Sunak will use his first Budget on Wednesday – less than a month after taking over at the Treasury – to announce 336,000 properties in England will benefit from a doubling to £5.2 billion by 2024 of money for flood defences.
The announcement about the boost for flood-hit areas comes after a winter in which the UK has been battered by some of the worst storms in recent memory.
Communities struggling to recover from the damage will be able to claim from a £120 million Winter Defence Fund designed to repair flood defences as quickly as possible.
Mr Sunak told Sky News: ‘What we are announcing today is a doubling in cash terms of the amount of money that we spend on flood defences in this country.
‘It’s going to pay for over 2000 different flood schemes around the country, it’s going to protect over 300,000 homes.
‘We have all either in our constituencies as MPs or watching on TV seeing the devastation wreaked on communities by flooding, this will make an enormous difference to people’s lives and I think it’s absolutely the right thing to do and this is something that wherever you live, whether you are in the south-west or the north-east, this impacts you, this investment will make a difference.’
Tory MPs warn Chancellor against fuel duty hike in Budget
Tory MPs have warned the Chancellor that hiking fuel duty in the Budget could hurt the NHS while it is under strain dealing with the coronavirus outbreak.
Robert Halfon, the driving force behind a petition supported by 36 Tory backbenchers, said raising taxes at the pumps would have an impact on the health service.
He said it would be akin to ‘giving with one hand and taking away with the other’ if the Chancellor gave the NHS extra cash while raising fuel duty.
‘Our message to the Chancellor is that the economy is facing a major challenge in coronavirus,’ he said. ‘We should be helping ordinary folk and businesses, not hammering them with fuel duty charges.
‘Don’t forget, the NHS is going to need a lot of extra money to deal with this kind of virus.
‘What’s the point though if you then put up fuel duty? Then the NHS will have to pay more as well because of the cost of transportation, ambulances and all that sort of thing.
‘They would be giving with one hand and taking away with the other.’
Senior Tories such as former party leader Iain Duncan Smith, ex-Brexit secretary David Davis and ex-transport secretary Chris Grayling were among the signatories to the letter, which Mr Halfon handed to Treasury officials yesterday.
Mr Halfon and his colleagues want a fuel duty freeze to be announced in the Commons on Wednesday.
And campaigners have flagged to Downing Street that – along with another 13 Tory MPs who signed a similar letter, led by ex-Cabinet minister Esther McVey, on February 24 – they have the numbers to bring about Boris Johnson’s first Commons defeat since securing his 80-seat landslide victory at the December election if Mr Sunak does opt to hike fuel duty.
The MPs’ letter co-ordinated by Mr Halfon was backed up with a petition by FairFuelUK, which garnered more than 134,000 signatures.
The Chancellor will set aside £100million to bolster the probation service and support victims of rape and sexual assault.
There is expected to be confirmation of a multi-billion pound investment in broadband improvements in the Budget this week
Convicted criminals released from prison on licence half-way through their sentences will face tighter constraints, including stricter curfews.
And offenders known to commit crimes after drinking will be fitted with so-called ‘sobriety tags’, which monitor their location and sample skin perspiration to determine whether they have consumed alcohol.
Last night Mr Sunak promised ‘new funding to toughen up community sentences, crack down on domestic abuse and provide victims with the support they need’, as a cross-party group of MPs called for a major investment in youth services to help prevent knife crime and protect children from a life of crime and violence.
Mr Sunak is also expected to pledge £9million to tackle fly-tipping and double cash for flood defences to £5.3billion.
Last week the Treasury announced that Mr Sunak will commit to new laws to protect the future of cash as free-to-use ATMs disappear from the high street. Another £5billion will be set aside for faster broadband across the country by 2025.
Mr Sunak will also announce that disabled people will benefit from a £30million investment in fully accessible public toilets, while the ‘tampon tax’ – VAT on sanitary products – will be abolished in 2021.