March 20, 2020 / 5:45 PM / 11 days ago

Sunak goes all out to avert economic collapse

LONDON (Reuters) - Chancellor of the Exchequer Rishi Sunak launched a gigantic stimulus package to stabilise Britain’s virus-hit economy on Friday, including the government paying the wages of workers up and down the country.

Chancellor of the Exchequer Rishi Sunak speaks during a news conference on the ongoing situation with the coronavirus disease (COVID-19) in London, Britain March 17, 2020. Matt Dunham/Pool via REUTERS

Here is what he and Prime Minister Boris Johnson said at a news conference together:

SUNAK ON UNPRECEDENTED MEASURES

“The economic intervention that I am announcing today is unprecedented in the history of the British state.”

PAYING WAGES

“Today I can announce that for the first time in our history the government is going to step in and pay people’s wages.”

PM JOHNSON ON CLOSING PUBS, RESTAURANTS

“We’re also telling nightclubs, theatres, cinemas, gyms and leisure centres to close on the same timescale. These are places where people come together... The sad thing is today, for now, at least physically, we need to keep people apart.”

JOHNSON ON “REAL THREAT” TO COUNTRY

It’s perfectly obvious when you look at the gradient of the disease that we have a real threat now, to our country, to the ability of our NHS to manage it, and unless we get this right we are going to see thousands of lives lost needlessly.

JOHNSON ON REMOVING INALIENABLE RIGHTS

“I do accept that what we’re doing is extraordinary - we’re taking away the ancient, inalienable right of free born people of the United Kingdom to go to the pub, and I can understand how people feel about that.”

SUNAK ON TAX HOLIDAY FOR BUSINESSES

“I’m also announcing today further cash flow support through the tax system. To help businesses pay people and keep them in work I’m deferring the next quarter of VAT payments, that means no business will pay any VAT from now until the end of June and you’ll have until the end of the financial year to repay those bills.”

HARDSHIP AHEAD

“The truth is we are already seeing job losses and there may be more to come. I cannot promise you that no-one will face hardship in the weeks ahead.”

PAYING FOR THE PACKAGE

“Our intention is to finance the package through the government’s normal debt management operations. The Treasury and the DMO, the Debt Management Office, are shortly to publish a comprehensive update to the gilt financing remit and that will be done in April.

“The DMO, Treasury and Bank of England are coordinating closely to support the functioning of the gilt markets and we’re very confident that we can finance it in that way.

30 BILLION POUNDS OF DIRECT SUPPORT TO BUSINESSES

“That is a direct injection of over 30 billion pounds of cash to businesses, equivalent to 1.5% of GDP.”

STRENGTHENING SAFETY NET

“To strengthen the safety net, I’m increasing today the universal credit standard allowance for the next 12 months by 1,000 pounds a year. For the next 12 months, I’m increasing the working tax credit basic element by the same amount as well. Together the measures will benefit over 4 million of our most vulnerable households.

“I’m strengthening the safety net for self-employed people too, by suspending the minimum income floor for everyone affected by the economic impact of coronavirus.

“That means self-employed people can now access in full universal credit at a rate equivalent to statutory sick pay for employees.”

Reporting by UK bureau, compiled by Andy Bruce, editing by Estelle Shirbon

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