Budget will ease coronavirus damage to economy, says Chancellor Rishi Sunak

The Budget will stop coronavirus wreaking permanent damage to the economy and give the NHS ‘whatever it needs’, the Chancellor vowed today.

Rishi Sunak warned that UK plc is set for a ‘shock’ as the killer disease spreads around the globe.

He made clear his first financial package this week will focus on easing the impact, and also pledged to give the NHS ‘whatever it needs’ to deal with a feared mass impact in this country.   

Mr Sunak, who has been in office for less than a month, said he was ‘not daunted’ by the challenge of protecting the UK’s finances from the effects of Covid-19.

Instead, he told the Sunday Telegraph, the country is ‘well prepared’ and would ’emerge on the other side stronger’.

Outlining his plan to help businesses cope with the virus, the MP for Richmond in Yorkshire said: ‘You have to look at the nature of what the economic impact might be, so that we can design an appropriate response.

‘The main issue is lots of people might be ill, and therefore not be able to be at work. And that impacts the productive capacity of your economy if you’ve got a manufacturing plant and they can’t make their widgets.’

He added: ‘We need to look at what are the interventions that we need to help bridge a difficult period. That’s where we might look at some targeted options to help ease the strain on cash flows for a certain period to help them get through to the other side.

‘Obviously, alongside the supply shock there will likely be an impact on demand if people are at home.’

Mr Sunak told Sky News’ Sophy Ridge on Sunday programme the NHS would get all the support it needs.  

‘I’m working hard with the team to make sure that we have the interventions required to help anyone through a difficult period first and foremost, supporting public services but also helping vulnerable people and also businesses to get through anything that might be coming our way,’ he said.

‘We stand ready to give the NHS whatever it needs.’ 

Mr Sunak said he was ‘looking at’ objections to transaction taxes such as stamp duty, an apparent hint that the levy could be changed in future budgets.

And he said that he wanted ‘lower rates of tax’ during his time in office.

Elsewhere, the Treasury said Mr Sunak is set to double funding for flood defences to £5.2 billion in Wednesday’s Budget.

The investment will help to build 2,000 new flood and coastal defence schemes and better protect 336,000 properties in England over the next six years.

He said communities in Britain have been ‘hit hard’ by severe flooding this winter, saying it is ‘right that we invest to protect towns, families, and homes across the UK’.

The funding – which doubles the £2.6 billion spent on flood defences between 2015 and 2021 – is expected to be targeted in every region, and will be available from next April.

Among other measures expected to be announced are:

• A £643million package of investment to help rough sleepers off the streets and support them get their lives back on track. 
• Up to £100million more per year will go towards the fight against ‘dirty money’, with a new levy on firms regulated for anti-money laundering. 
• Millions more for state-of-the-art football pitches in hard-hit communities.

The Chancellor said: ‘This Budget will be about delivering on our promises to the British people, and levelling up all parts of the UK is a big part of that.

‘Communities up and down Britain have been hit hard by the floods this winter – so it is right that we invest to protect towns, families, and homes across the UK.’

The UK has been battered by a string of storms over recent months, leading to severe flooding across the UK – particularly in Wales, south Yorkshire and the Midlands.

The Chancellor is also set to announce a £120million winter defence repair fund to fix assets damaged in the recent storms as quickly as possible when he delivers his first Budget.

Last month, the Government pledged a package of support to help flood-hit households – including financial hardship payments, council tax and business rates relief, and business recovery grants.