Statement: Economic update

17 March 2020

The Chancellor, Rishi Sunak, delivered the 2020 Budget to the House of Commons on 11 March 2020.

The Budget included extra measures to help those affected by Covid-19.

Mr Sunak said statutory sick pay would be available to everybody who had to self-isolate as a result of coronavirus from day one. The Government will also launch a loan scheme for business affected by coronavirus.

Rishi Sunak, Chancellor of the Exchequer, gave a statement to the House.

Rishi Sunak: Government is "willing to do whatever it takes"

Mr Sunak said there will support for jobs, incomes and business and that the Government is willing to do "whatever it takes" to get people through the current crisis.

He declared the crisis an "economic emergency", but assured the House that the Government will "give you [the public] all the tools you need to get through this".

He referred to the Budget presented last week where he set out the "first stage of our economic response" to Covid-19. The Government initially planned to spend £30 billion on a "package of support" for people and businesses.

But the Government is responding to the evolving situation.

He says "we're now approaching the fast-growth part of the upwards curve" which means the Government are going into their "next phase of the economic response".

Government proposals

The Government will:

  • make an "unprecedented" package of government-backed and guaranteed loans for support for businesses
  • make available £330 billion of guarantees, meaning any business needing access to cash to pay rent, salaries and suppliers will be able to access a government-backed loan or credit on "attractive terms"
  • make more money available if needed
  • create a lending facility to provide low-cost, easily accessible commercial paper
  • extend the business interruption loan scheme for small to medium sized businesses
  • potentially create a support package for airlines and airports
  • A cash grant of up to £25,000 for those businesses with a rateable value of less than £51,000
  • Business rates holiday has been extended to 12 months
  • introduce a 3 month mortgage holiday
  • Cash grants of £10,000 to 700,000 of the smallest businesses

John McDonnell: livelihoods "are being threatened"

John McDonnell, Shadow Chancellor of the Exchequer said "we [the Labour Party] want to work with him to ensure we do everything we can to protect our economy and our people."

However, he went on to say that people's livelihoods "are being threatened".

He says "todays package of measures didn't really appreciate the urgency and the gravity of the situation" and that we "must protect" the incomes of those who are self-isolating, sick or "laid-off from their employment".

The Shadow Minister went on to ask about statutory stick pay, and whether the Government are extending it to people who are on "low pay, part time work, zero hour contracts and who at the moment do not qualify."

He asked Rishi Sunak to abolish the lower earnings limit in relation to statutory sick pay and to lift the level of sick pay, which should be "raised to the level of real living wage", as other countries "are providing 100% protection of wages."

Mr McDonnell says "there is nothing in the statement to protect renters" and asked the Chancellor of the Exchequer to bring in measures to protect renters, prevent evictions and enable rent holidays."

He scrutinised the Government's use of Universal Credit, as those on Universal Credit will be given an "advance as a loan" which will be "pushing people into debt."

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Image: UK Parliament/Jessica Taylor

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