The head of the Treasury watchdog has said Britain faces a “wartime situation” and must urgently raise public spending to support households and businesses through the coronavirus outbreak, even if public borrowing dramatically balloons.
Robert Chote, the head of the Office for Budget Responsibility, said the economy was “probably shrinking as we speak” – with damaging consequences for the public purse – but that now was the time to spend without regard for the national debt.
Speaking to MPs on the Treasury committee, he said: “This is not a time to be squeamish about one-off additions to the public debt. It’s more like a wartime situation that this is money well spent.”
The head of the tax and spending watchdog said in an ideal world Britain would be confronting the coronavirus outbreak with the national debt lower than its current level, but that it would be for the government to decide how to balance the books after the crisis had passed.
The chancellor, Rishi Sunak, is expected to announce measures to support the economy, including an expansion in financial support for firms and families. Sunak delivered one of the most expansionary budgets since the early 1990s last week, including a package of emergency support to tackle Covid-19 worth £12bn.
Britain’s national debt has doubled since the economic collapse after the 2008 financial crisis, from about 40% of GDP to around 80%, or an estimated £1.8tn. Sunak’s spending measures at the budget pushed up the government’s budget deficit – the annual shortfall between spending and income from taxes – to about £60bn a year by 2023, funding Boris Johnson’s mass expansion in spending through persistently higher levels of public borrowing.
Symptoms are defined by the NHS as either:
- a high temperature - you feel hot to touch on your chest or back
- a new continuous cough - this means you've started coughing repeatedly
NHS advice is that anyone with symptoms should stay at home for at least 7 days.
If you live with other people, they should stay at home for at least 14 days, to avoid spreading the infection outside the home.
After 14 days, anyone you live with who does not have symptoms can return to their normal routine. But, if anyone in your home gets symptoms, they should stay at home for 7 days from the day their symptoms start. Even if it means they're at home for longer than 14 days.
If you live with someone who is 70 or over, has a long-term condition, is pregnant or has a weakened immune system, try to find somewhere else for them to stay for 14 days.
If you have to stay at home together, try to keep away from each other as much as possible.
After 7 days, if you no longer have a high temperature you can return to your normal routine.
If you still have a high temperature, stay at home until your temperature returns to normal.
If you still have a cough after 7 days, but your temperature is normal, you do not need to continue staying at home. A cough can last for several weeks after the infection has gone.
Staying at home means you should:
- not go to work, school or public areas
- not use public transport or taxis
- not have visitors, such as friends and family, in your home
- not go out to buy food or collect medicine – order them by phone or online, or ask someone else to drop them off at your home
You can use your garden, if you have one. You can also leave the house to exercise – but stay at least 2 metres away from other people.
If you have symptoms of coronavirus, use the NHS 111 coronavirus service to find out what to do.
Source: NHS England on 23 March 2020
Even before the coronavirus struck, the national debt – the sum of every annual budget deficit – was set to fall only slightly as a proportion of the economy, from 80.6% in 2018-19 to 75.2% in 2024-25.
Chote told the Treasury committee the situation had moved on dramatically in the days since the budget. “One regards the £12bn as being a downpayment. The idea of what needs to be done and how expensive it needs to be is going to change on a daily basis.
“The more serious this is, the more blunderbuss the approach. When the fire is large enough you just spray the water and worry about it later. I think that’s likely to be the direction.”
Charlie Bean, a former deputy governor of the Bank of England who sits on the government’s budget responsibility committee and was also appearing before the Treasury committee, said: “It’s better to end up spending a little too much here than not doing enough.”
“If you damage the economy, you damage the public finances further down the road. All the evidence we have, from whether it’s the financial crisis or things like this, is that big early action is better than half-hearted action delayed.”
