Budget 2020: £30bn lifeline to mitigate coronavirus risk and stimulate UK economy

Businesses were handed a coronavirus lifeline as the Chancellor unveiled a £30 billion package to stimulate the economy in the face of the outbreak.

The Budget focused on responding to the ongoing threat of Covid-19. Picture: Ben Birchall

Rishi Sunak outlined support measures including £7bn to help businesses, the self-employed and vulnerable people, in a hastily written Budget focused on responding to the ongoing threat of Covid-19.

The package included a pledge that the UK Government will fully meet the cost of providing statutory sick pay for up to 14 days for workers at companies with up to 250 employees – providing more than £2bn for up to two million businesses.

It promised a “business interruption loan scheme” for banks to offer up to £1.2 million to support small and medium-sized businesses.

The Chancellor also extended statutory sick pay to “all those who are advised to self-isolate” even if they have not displayed symptoms.

He said further measures in the Budget provided an additional “fiscal loosening” of £18bn to support the economy this year, taking the total fiscal stimulus to £30bn.

Sunak said there is likely to be a “temporary disruption” to the economy as up to a fifth of the working age population could be off at any one time due to methods to contain the Covid-19 outbreak.

The Budget was announced the day after Health Minister Nadine Dorries tested positive for the virus.

Sunak also promised the NHS “whatever it needs” in terms of funding to tackle the virus, as the number of UK cases more than doubled in just four days.

He said: “Whatever extra resources our NHS needs to cope with coronavirus it will get...Whether it’s millions of pounds or billions of pounds, whatever it needs, whatever it costs, we stand behind our NHS.”

Hours before the Budget, the Bank of England set the scene with an emergency interest rate cut from 0.75 per cent to 0.25 per cent and a series of other measures designed to help businesses and households deal with the outbreak.

The Bank of England said the move would help UK plcs through an economic shock “that could prove sharp and large, but should be temporary”.

Sunak said: “I know how worried people are. Worried about their health, the health of their loved ones, their jobs, their income, their businesses, their financial security.

“People want to know what’s happening, and what can be done to fix it. What everyone needs to know is that we are doing everything we can to keep this country, and our people, healthy and financially secure.”

Jonathan Geldart, director general of the Institute of Directors, said: “This was a box-office Budget. Given the circumstances, the Chancellor had to be bold, and he came through for business today.

“With the coronavirus outbreak threatening a cashflow crunch, measures to cut costs and support loans to businesses are on the money.

“Wider reliefs around business rates and job taxes will also buoy firms as they look to weather Covid-19’s implications.”

However, Tim Roache, general secretary of the GMB union, said: “There’s nowhere near enough in the Budget to help working people who have to self-isolate – the government can dress it up however they want.

“Statutory sick pay is £18 per day, no one can live on that, and that’s what the government seem to expect the 20 per cent of the population who may have to self-isolate to do. If it’s possible, let’s see ministers do it.

“Coronavirus has highlighted the abysmal state of sick pay in this country. This Budget was an opportunity for the government to right a wrong, but typically they’ve completely ignored it.”