Budget: Sunak to pledge billions to soften Covid-19 impact

·5-min read
<span>Photograph: Vickie Flores/EPA</span>
Photograph: Vickie Flores/EPA

The chancellor is to pledge billions of extra pounds to ease the strain on an overstretched NHS and reassure an increasingly nervous Britain that the government can cope with any further escalation of the Covid-19 outbreak.

With the UK facing the biggest financial threat in more than a decade amid fears the epidemic could cause a recession, Rishi Sunak was expected to announce a raft of measures in Wednesday’s budget to safeguard jobs, extend the scope of sick pay, and prevent businesses going under by deferring tax payments.

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There was growing speculation in the City that the Bank of England would respond to crashing share prices on global financial markets with an unscheduled cut in interest rates, designed to dovetail with Treasury action.

Sunak, who has been in the post for less than a month, has been forced to revise his budget plans after it became increasingly clear the government’s priority needs to be managing the Covid-19 crisis.

While the chancellor insisted on Tuesday that his speech would lay the foundations of a “decade of growth for everybody”, the budget was expected to announce only limited action to deliver on the government’s election pledge to spread prosperity to all parts of Britain.

The government prepared to set out its financial rescue package following another turbulent day in which:

  • The number of confirmed cases in the UK rose to 373 and a sixth death was announced.

  • Downing Street admitted the NHS 111 online service had been giving the wrong advice to travellers returning from Italy: that there was no need to self-isolate if they had no symptoms. They are now being told to self-isolate and stay indoors.

  • British Airways, EasyJet and Ryanair cancelled all flights to and from Italy as the Italian government’s decision to place the entire country on lockdown came into effect.

  • Angry British tourists accused airlines of leaving them “stranded” and scrambling for alternative flights and road transport.

  • International financial markets stabilised amid hopes governments would act to protect their economies.

  • The EU agreed to fund researchers seeking a vaccine for the coronavirus, allow member states greater flexibility on subsidies to companies, and invest €25bn in parts of the European economy worst hit.

  • At least two US Republican politicians who had recently met Donald Trump announced they were going into self-quarantine after potentially being exposed to the virus at a conference.

As the total number of global infections reached 116,000 and the death toll passed 4,000, the British government’s broader strategy came into sharp contrast with draconian measures being rolled out by other European authorities.

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Austria announced a ban on Italians entering the country unless they were carrying a medical certificate, and Spain, which reported 35 deaths and 1,622 confirmed cases on Tuesday, shut schools in several regions, including the capital, Madrid.

In Germany, which has 1,295 coronavirus patients and where two people have died, Berlin authorities announced the closure of all theatres, concert halls and opera houses until at least the end of the Easter holidays. The capital also became the seventh of Germany’s 16 states to ban gatherings of 1,000 people or more.

The UK government’s strategy of holding off on closing schools or cancelling major outdoor events, such as football matches, was defended by the deputy chief medical officer for England, Dr Jenny Harries.

She said the argument for cancelling major events was not necessarily supported by science, adding: “The virus will not survive very long outside.”

Matt Hancock defended the government’s handling of the crisis in the House of Commons, amid criticism that people were being told they could not tested unless they had had contact with a known case. The health secretary said all of the government’s advice was “driven by clinicians” and was under constant review.

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Among those making subtle calls for a change of tactics was Dr Peter Drobac, an expert in infectious diseases at Oxford University, who said he believed it was time to seriously consider some of the social distancing adopted by other countries, including closing schools.

“The evidence on social distancing is limited but pretty clear – it works better when done pre-emptively,” said Drobac, adding that with hindsight it appeared Italy had waited too long before implementing such measures.

The government was accused of playing roulette with the public by the editor of the Lancet medical journal. Dr Richard Horton called for the “urgent implementation of social distancing and closure policies”.

There was also firm support for the experts advising the government, including those on the Scientific Advisory Group for Emergencies (Sage), which held a meeting chaired by the government’s chief scientific adviser, Patrick Vallance.

Dr Simon Clarke, an associate professor in cellular microbiology at Reading University, said ministers should not be rushed into moving into the “delay” phase. “More serious containment action, such as that seen in China and Italy, should not be used unless absolutely necessary. We must avoid ‘something must be done, this is something so let’s do it’ scenarios,” he said.

However, others stressed that draconian measures did help to limit the impact of infectious disease outbreaks.

Dr Elisabetta Groppelli, a lecturer in global health at St George’s, University of London, said: “Social distancing measures have had a major effect in Wuhan, and in previous outbreaks, such as the recent Ebola outbreak in west Africa and Spanish Flu in 1918. The lockdown in Italy could therefore have success in containing and slowing the number of new cases, which could also reduce the strain on healthcare facilities in the country.”