Rishi Sunak will use his first Budget tomorrow to turn on the Treasury’s spending taps and pledge to invest ‘hundreds of billions of pounds’ on improving the UK’s critical infrastructure.
The new Chancellor will announce plans to invest ‘record amounts’ in the nation’s roads, railways, broadband, housing and research.
The government wants the spending spree to ‘lay the foundations for a decade of growth’ as Boris Johnson moves to try to deliver on his promise to ‘level up’ the whole of the UK.
However, the infrastructure promises could ultimately be overshadowed with the Budget expected to be dominated by coronavirus-related announcements as the government steps up its response to the deadly disease.
Mr Sunak is believed to be preparing to pump billions of pounds into the NHS and to make financial help available to businesses which could be hit hard by the outbreak.
There are also growing rumours that the financial address could include an emergency cut to interest rates to ease the impact of a worldwide economic slowdown.
But Mr Sunak will be keen to show the government is still getting on with implementing its domestic agenda and the infrastructure war chest is likely to be the centrepiece of his Budget.
The Treasury said that the proposed cash injection will represent the ‘most ambitious investment in infrastructure and innovation ever’.
The measures will mean that by the end of the current Parliament, Mr Sunak will have tripled the average net investment seen over the last four decades, according to the Treasury.
That would put public investment at the highest levels in real terms since the 1950s.
The total value of the infrastructure spending could reportedly be as high as £600 billion.
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
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)
Speaking on the eve of his first Budget, Mr Sunak said: ‘This is a Budget for people right across the country – no region will be left behind.
‘We have listened and will now deliver on our promise to level up the UK, ensuring everyone has the same chances and opportunities in life, wherever they live.
‘By investing historic amounts in British innovation and world-class infrastructure, we will rebalance opportunities and lay the foundations for a decade of growth for everybody.’
The Treasury will also review its Green Book – the document used to assess the value of government projects and policies – with updated rules and guidance then shaping how the money will be spent.
As well as the infrastructure spending, there will also 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 – a key Tory manifesto pledge – which could benefit millions of workers and help keep UK plc ticking over if there is a major coronavirus outbreak.
Extra cash to boost flood defences and more help for the homeless are also likely to be announced by Mr Sunak.
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 Britain for what could be a very bumpy ride in the months ahead.
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.
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.
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
Britain braces for a ‘coronavirus Budget’
Chancellor Rishi Sunak is preparing to pump billions of pounds into the NHS and business in a ‘coronavirus Budget’ tomorrow.
The financial package is set to be dominated by the global impact of the killer disease, and fears that it is now taking hold in the UK.
Rumours are swirling that there could also be an emergency cut to interest rates to ease the hit from a worldwide economic slowdown.
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 in the months ahead.
His 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.
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 wanted to provide a ‘bridge through a temporary period of difficulty so that they can emerge on the other side’.
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.
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.
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 at the weekend: ‘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.
There is expected to be confirmation of a multi-billion pound investment in broadband improvements in the Budget this week
Budget confirms £5billion funding for rollout of faster broadband
A £5billion investment to roll out faster broadband across the UK by 2025 is expected to be confirmed by the Chancellor in tomorrow’s Budget.
The Conservatives pledged at the general election to bring full fibre and gigabit-capable broadband to every home and business in Britain within five years.
Rishi Sunak is set to use his first Budget to confirm the cash injection which he hopes will benefit more than five million homes and businesses.
Gigabit broadband, which is 40 times faster than standard superfast broadband, will be rolled out to the hardest to reach 20 per cent of the country, the Treasury has already announced.
The Chancellor is also expected to announce a £1 billion deal with the mobile phone industry to boost 4G coverage across the country – with the biggest improvements likely to be in Scotland, Northern Ireland and Wales.
The deal will provide extra coverage to 280,000 premises and 16,000km of roads, the Treasury anticipates.
Mr Sunak said: “We are committed to levelling up across every region and nation in the UK and that is why we are making the largest ever public investment into broadband.
“This investment delivers on our promises to the British people, boosting growth and prosperity across the country.”
Sick pay entitlements to be boosted amid coronavirus crisis
Rishi Sunak has hinted his Budget tomorrow will provide help for workers who do not qualify for statutory sick pay and who may be concerned at the financial impact coronavirus could have on them.
The government is set to advise anyone who has flu-like symptoms to self-isolate for a period of seven days.
But that could be a major problem for the self-employed or workers who do not earn enough money to qualify for paid help when they are unwell.
The Chancellor made clear on Sunday that he was well aware of the potential financial difficulties which some people could face if they are instructed to stay at home.
He hinted help will be made available with potential changes being made to the existing Universal Credit benefits system.
Speaking to the BBC’s Andrew Marr Show, Mr Sunak said: ‘Well, you’re absolutely right, there will be some people who are not covered by statutory sick pay.
‘We’re looking at all of the various interactions with our benefit system, whether it’s Universal Credit, whether it’s employment support allowance, and making sure that people are, crucially, not penalised for doing the right thing.’
Mr Sunak said ministers were working to ensure that the benefit system is ‘as quick and as accessible as possible, given the circumstances we face’.
Parents of sick babies will get £160 a week extra so they can focus on crisis
Parents of sick newborn babies will be able to claim a new neonatal pay and leave entitlement under measures set to be announced by the Chancellor at tomorrow’s Budget.
Rishi Sunak will outline plans to allow new mothers and fathers to claim statutory paid leave for every week their child is in neonatal care, up to a maximum of 12 weeks, when he delivers his first Budget on Wednesday.
Treasury Minister Kemi Badenoch said the cost of the leave – to be paid at a rate of around £160 per week – would almost entirely be incurred by the government, rather than business.
She said: ‘This week’s Budget is about many things. It will deliver on the promises we made to the British people in last year’s election campaign. And it will lay the foundations for the next decade of UK economic growth. What it will also do is deliver support to hard-working families.
‘And for families who are unlucky enough to spend the first period of their child’s life in neonatal care it will bring particularly good news. Because the Chancellor will announce that for the first time ever parents in these difficult circumstances will be able to claim a new neonatal pay and leave entitlement.
‘We will bring in an historic new entitlement ensuring parents having to take time off work because they have a sick baby will get paid parental leave.’
Cuts to National Insurance could benefit millions of workers
A National Insurance cut is likely to be the centrepiece of Rishi Sunak’s first Budget.
The Conservatives pledged in their 2019 general election manifesto to slash the amount people have to pay.
Mr Sunak is expected to increase the threshold at which payments start from £8,632 to £9,500 with the change coming into effect next month.
Ultimately the Tories want to increase the threshold to £12,500 over the next five years.
Tomorrow’s widely expected move would save workers approximately £100 a year.
The Tory manifesto stated: ‘We not only want to freeze taxes, but to cut them too. We will raise the National Insurance threshold to £9,500 next year – representing a tax cut for 31 million workers. Our ultimate ambition is to ensure that the first £12,500 you earn is completely free of tax – which would put almost £500 per year in people’s pockets.’
Mr Sunak was asked on Sunday if he intended to go ahead with the cut as proposed.
He replied: ‘You know we talked in the manifesto in the campaign about National Insurance.
‘That is something that we said we would do and as I said my broad theme is to deliver on the promises that we made.’