James Forsyth

How far will the government go to compensate those hit by coronavirus?

How far will the government go to compensate those hit by coronavirus?
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One of those at the heart of the government’s response to coronavirus predicts that the Budget might not even be the biggest story on Wednesday. Their view is that its spread over the coming weeks will be such that ‘nobody alive will have experienced anything like it’. Though, as I say in The Sun this morning, the fact that the virus spares children and only has a 1 per cent death rate means that the emotional toll of it will be contained.

These circumstances mean that the Budget has been scaled back. Inside the Treasury it has been dubbed the ‘manifesto Budget’. It will contain changes to ensure that more infrastructure projects are built outside London and the South East, there’ll be a ‘Union connectivity’ project launched to better link up England, Scotland, Wales and Northern Ireland—expect Boris’s bridge to get a mention, it will green light a slew of road projects, provide money for fast broadband and increase funding for research. It’ll curb the entrepreneurs’ tax relief that has turned from being an encouragement to take a risk on a new business to a general form of tax relief for wealthy investors.

The Budget will also seek to emphasise that despite the undoubted, short-term disruption that the Coronavirus will cause, the medium-term future for the economy is pretty-rosy. Unlike with the 2008 financial crash, the economy will rebound strongly once the virus has passed through the system.

There is, though, a big debate going on in government about how much the government should do to help individuals and business through the Corona downturn. The rise in the number of people in the UK who are their own boss means that there are more than 4 million workers in the UK who aren’t entitled to sick pay.

The government will, almost certainly, offer these people more time to pay their taxes. But what else it should do is a subject of growing debate in Whitehall. One of those involved in these discussions points out, ‘We can’t pay for the whole gig economy for the next 6 months’.

A Minister argues that people can get an advance from universal credit within 2 days in urgent cases. They fear that if the government starts paying the wages of the self-employed, then it will be hard to see where it should stop. They point out that a self-employed plumber who earns £1,000 a week now, will almost certainly lose money as the virus spreads. Should the state make that up?

Written byJames Forsyth

James Forsyth is Political Editor of the Spectator. He is also a columnist in The Sun.

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