Public Finance: Coronavirus

(asked on 20th April 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate he has made of the cost to the public purse of the measures implemented to deal with the financial effect of the covid-19 outbreak; and what estimate he has made of the timescale for repaying the level of borrowing required for implementing those measures.


Answered by
Steve Barclay Portrait
Steve Barclay
Secretary of State for Environment, Food and Rural Affairs
This question was answered on 28th April 2020

The Government has announced unprecedented support for public services, business and workers to protect against the current economic emergency. These steps are necessary to ensure that the country, economy and public finances are stronger in the longer-term.

Precise costs are difficult to estimate at present due to a range of factors. For example, costs are heavily dependent on the impact of the crisis on the wider economy and the level of scheme take up.

The Office for Budget Responsibility (OBR) have published a coronavirus reference scenario which provides insight into the potential fiscal costs under a particular set of economic circumstances. In their scenario, the OBR estimate the direct cost of Government decisions to be £99.7 billion. The OBR note that the measures taken should help limit the long-term damage to the economy and public finances – and the costs of inaction would have been higher.

A full assessment of the economic and fiscal position will be made at the next Budget alongside an updated OBR forecast.

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