UK pledges $39 billion to cover economic cost of coronavirus
12 March 2020
Britain unveiled a 30 billion pound ($39 billion) economic stimulus plan on Wednesday to tackle the risk of recession caused by the coronavirus, hours after the Bank of England slashed lending rates and announced new SME funding
Britain's new Chancellor of the Exchequer Rishi Sunak, Prime Minister Boris Johnson’s finance minister, announced the plan as part of a debt-fuelled investment surge for the coming years that budget forecasters said was the biggest stimulus since 1992 after a decade of austerity.
Sunak said the world’s fifth-biggest economy was facing a “significant impact” from the virus, whose rapid spread has stoked fears of a global recession and shaken financial markets, even if the hit was likely to be temporary.
“Up to a fifth of the working age population could need to be off work at any one time. And business supply chains are being disrupted around the globe,” Sunak said in an annual budget speech to parliament on Wednesday.
“I will do whatever it takes to support the economy.”
The 39-year-old finance minster, who was a former Goldman Sachs analyst, said he would help companies facing a cash-flow crunch, including a year-long suspension of a property tax paid by smaller firms, and funding for sick pay.
He said companies and self-employed people would be able to defer tax payments and he relaxed sick pay qualification rules for workers and people on benefits.
Britain’s health system and other public services would receive an extra 5 billion pounds to help counter the spread of coronavirus. But with medical officials warning of an expected jump in coronavirus cases in the coming weeks, Sunak wil have to find new resources to fight the disease.
At least six people have died in Britain and 383 coronavirus cases have been confirmed, including a junior health minister from Johnson’s Conservative Party.
The coronavirus has taken the sheen out of Johnson’s tax-and-spending plan hat was to showcase direct investment towards poorer regions, where voters helped him to a big election victory in December.
Public investment of more than 600 billion pounds over the next five years, to levels not seen since 1955, represents a turning point for Britain after a decade of austerity to narrow its budget deficit.