UK coronavirus live: Shapps rules out return to austerity as leaked report says Treasury considering cuts and tax rises

Funds to support charities during the coronavirus crisis are “bedevilled by delay and a lack of transparency”, according to the chief executive of the National Council for Voluntary Organisations (NCVO).

Karl Wilding said of the £750m package announced by the chancellor, Rishi Sunak, “it remains unclear how roughly half of the £160m allocated for distribution via central government departments is to be spent”.

Wilding said charities in some areas have been asked by departments to bid for funding, while others have heard nothing. “This does nothing for confidence in how decisions are being made,” he said. “The process needs to be simple and open.”

He added it is still unclear when organisations will be able to apply for the £370m to be distributed via the National Lottery Community Fund (NLCF).

“Reassurances that funding will be made available soon are starting to wear thin,” he said. “I have told the government and the NLCF that this pace isn’t good enough.”

He is calling on the government to offer clarity on how funds will be distributed, and what criteria will be used in decision making.

Real care home coronavirus death toll double official figure, study says

More than 22,000 care home residents in England and Wales may have died as a direct or indirect result of Covid-19, academics have calculated – more than double the number stated as passing away from the disease in official figures, our colleague Robert Booth reports.

Today is the official start of step one of the move towards recovery set out by Boris Johnson in his coronavirus recovery plan. Theoretically the plan covers the UK, but the step one measures announced by the PM – particularly the suggestion that people who cannot work from home should go to work even if their job is non-essential – only apply to England.

In London the advice may be having some impact. According to Transport for London, the number of passengers using the London Underground today from the start of service to 6am was up by 8.7% compared with the same period last week.

Traffic on the M56 this morning.

Traffic on the M56 this morning. Photograph: Phil Noble/Reuters


The Cabinet Office has announced that five ministerial-led task forces will be established to determine how to reopen pubs, beauty salons, places of worship and leisure centres, as well as re-boot the aviation sector. In a statement, the Cabinet Office said it was the “government’s ambition to open as many of these other businesses and public places as possible over the coming months, when the scientific advice provided allows us to”.

The five task forces will look at the following sectors:

  • Pubs and restaurants, led by the Department for Business, Energy and industrial Strategy (BEIS).
  • Non-essential retail, including salons (BEIS);
  • Recreation and leisure, including tourism, culture and heritage, libraries, entertainment and sport (Department for Digital, Culture, Media and Sport).
  • Places of worship, including faith, community and public buildings (Ministry for Housing, Communities and Local Government).
  • International aviation (Department for Transport).

These five ministerial groups will help to decide how the government moves towards steps two and three, in phase two, guided by the five tests, and the five alert levels. Sam Macrory at the Institute for Government has a good explanation.

Sam Macrory

Coronavirus lockdown latest from the @instituteforgov

Here’s the government’s 3 phases, 5 tests, 3 steps and 5 alert levels all rolled in to one easy-to-read table by @melissaittoo

May 12, 2020


Sunak refuses to deny report saying Treasury now thinks swift V-shaped recovery unlikely

According to the Telegraph leak (paywall) the Treasury now believes the UK is more likely to get a U-shaped recovery than a V-shaped one. The paper reports:

The document, drawn up by the chancellor’s policy advisers, says “a more realistic scenario” than the idea of a V-shaped recovery is a “prolonged recovery and some permanent damage to the economy” – in other words, a U-shaped recovery.

In the Treasury’s own worst-case prediction, the economy would go through an “L-shaped” recovery, meaning economic output would remain below current forecasts for the next five years, leading to a large structural deficit and a budget deficit running to one third of GDP.

In an interview with the BBC this morning, Rishi Sunak, the chancellor, refused to deny that this reflected Treasury thinking. This is from the BBC’s Faisal Islam.

Faisal Islam

On Telegraph leak that says internally “v-shaped” bounce back seem as optimistic: Sunak: “ I think it’s premature to speculate. But what we do know is in order to make sure that recovery is as swift as strong as we will like it to be we need to take action now to protect jobs…”

May 13, 2020


Harriet Sherwood

The archbishop of Canterbury has been making undercover visits to minister to patients at St Thomas’ hospital in central London, it has been reported.

Justin Welby has regularly volunteered as a chaplain at the hospital, which is close to Lambeth Palace, his London home, according to the Daily Telegraph (paywall). He has worn PPE over his black clerical shirt and dog collar, the paper said.

A source close to Welby told the paper

Justin has been a volunteer chaplain at St Thomas’s hospital since lockdown, working alongside other chaplains praying for the sick and dying. Tommy’s is his local hospital so he walks there.

He gets a lot of solace from doing it. Just being able to physically see people and pray with them during lockdown – it’s what the clergy has been doing the length and breadth of the country.

There is some personal risk but he doesn’t really think about that. He just thinks this is what Christians should be doing, helping others.

Jamie Grierson

Hate crime toward south Asian and far-east Asian communities has increased 21% during the coronavirus crisis, as have reported incidents of “revenge porn”, ministers have told MPs.

Lady Williams, minister for countering extremism, told a home affairs select committee (Hasc) session on online harms during the Covid-19 pandemic that there had not been an increase in extremism generally but there had been increases in specific types of hate crime.

She said: “Extremism – certainly we’ve not seen an uptick in it generally but during the lockdown period, I’ve been speaking to our hate crime lead, and there’s been a 21% uptick in hate incident against the IC4 and IC5 community.”

IC codes are used by the police in radio communications and crime recording systems to describe the apparent ethnicity of a suspect or victim – IC4 relates to South Asian and IC5 relates to the Far East.

Hate crime attacks against Chinese people in the UK have been well-documented during the lockdown period, including individuals being spat and assaulted.

Police estimates suggest hate crime towards Chinese people is up three-fold.

In addition, Caroline Dinenage, digital and culture minister, told the committee that there had been a rise in revenge porn – that is, the sharing of private, sexual materials, either photos or videos, of another person without their consent both online and offline.

Dinenage said: “For adult users – we’ve seen a concerning increasing trend in things like revenge porn and sexploitation, calls to helplines along the lines of things like that.”


Here are three economics commentators on the Telegraph story about the Treasury leak. (See 9.30am.)

These are from Jonathan Portes, a former government economist who is now an economics professor at King’s College London.

Jonathan Portes

Actually quite sensible:

– “Chancellor has indicated a preference for higher but broadly stable levels of debt”

– tax rises to fund *ongoing* spending but when recovery established.

Very different both economically and socially to Osborne (balancing budget with cuts)

May 13, 2020

Jonathan Portes

(Most of this is just obvious HMT options analysis/contingency planning. Only real *news* is explicit policy that we should – as I and others have argued – not worry about “paying back” the extra debt but just live with a a higher debt ratio indefinitely)

May 13, 2020

This is from Rupert Harrison, who was chief of staff for George Osborne when Osborne was chancellor.

Rupert Harrison

It would be a surprise if Treasury officials weren’t writing documents like this

But I doubt Rishi Sunak is paying any attention to the need to announce consolidation plans any time soon

We’re still in the crisis phase and central banks are standing behind finance ministries

May 13, 2020

And Paul Mason, the former Newsnight economics editor who is now a prominent Labour campaigner, has posted a Twitter thread on the leak. It starts here.

Paul Mason

Thread on the Treasury austerity leak: 1/ The HMT base case is no longer a v-shaped recovery but a U, with longer recovery and permanent scarring, costing a £337bn deficit this year. Unless we abandon the orthodoxy, that will mandate severe austerity – and flatline growth…

May 13, 2020

And here are two of his proposals.

Paul Mason

4/ Borrow what it takes. Set a new notional debt/GDP target stabilised around 120%. That would not leave the UK an outlier compared to other G7 economies and provide plenty of ammo…

May 13, 2020

Paul Mason

9/ If all this sparks a sovereign debt crisis for the UK, we will not be alone in the world: the model is the Fed now and Draghi in 2012 – we’ll do whatever it takes to stave off a debt-deflation spiral. The most decisive country will win the battle against financial speculators

May 13, 2020


On the first day businesses in England are encouraged to resume operations, there was a noticeable rise in numbers of commuters across the capital during rush hour.

Waterloo station remained quiet, although a station shift manager told the PA Media news agency there had been an increase in passengers.

The manager said footfall throughout the crisis had been around 5% the normal level, which had risen to around 7% on Monday and Tuesday and around 10% on Wednesday so far.

Waterloo station in London remained quiet just at 9am this morning.

Waterloo station in London remained quiet just at 9am this morning. Photograph: Daniel Leal-Olivas/AFP via Getty Images

Traffic was quick to build up during rush hour on the North Circular Road in London. When announcing the easing of lockdown restrictions on Sunday evening, Boris Johnson asked commuters to avoid public transport if they could.

Traffic on the North Circular Road in London during rush hour on 13 May.

Traffic on the North Circular Road in London during rush hour on 13 May. Photograph: Neil Hall/EPA

But this video has surfaced on social media, showing people get off a busy bus in Stratford, east London, at around 6.30am this morning.

ᒍᗩY_ᗷITᔕ_ Risky Roadz X BOTBOT x Grime Gran

@TfL @SadiqKhan @BorisJohnson you lot claim to care about the public I just watched and 86 bus at Stratford bus station pull in and not one person Is social distancing because there’s to many people on buses either put out more buses @ peak times or just go back to lockdown

May 13, 2020

Yesterday the government admitted commuters may not be able to practise physical distancing effectively on public transport.

The Department for Transport said anyone who needs to take public transport should wear face masks, keep their distance from fellow travellers and try to avoid rush hour.


People who book foreign holiday might lose all their money, says Shapps

Here is another line from the Grant Shapps morning interview round. Expanding on something Matt Hancock said yesterday, Shapps, the transport secretary, said people who book a foreign holiday might lose all their money. This is from HuffPost’s Paul Waugh.

Paul Waugh

Asked by @bbcnickrobinson if ppl who book a summer holiday risk losing all their money, @grantshapps says “Yes”.

May 13, 2020

As Rowena Mason reports, Shapps also said in a separate interview that he would not personally get on a crowded bus or tube.

Shapps rules out return to austerity as leaked report says Treasury considering cuts and tax rises

Andrew Sparrow

Good morning. I’m Andrew Sparrow, joining the blog for the day.

This morning the Daily Telegraph has splashed on the leak of an internal Treasury reports suggesting that tax rises or a public sector wage freeze are being considered as options that might be needed to help the government cover the cost of the coronavirus crisis.

UK coronavirus live: Shapps rules out return to austerity as leaked report says Treasury considering cuts and tax rises 1Neil Henderson

TELEGRAPH: Treasury says virus to cost £300bn as it warns of tax Rises and pay freeze #TomorrowsPapersToday

May 12, 2020

The story (paywall) is by Gordon Rayner and Anna Mikhailova. This is how it starts.

A confidential Treasury assessment of the coronavirus crisis estimates that it will cost the exchequer almost £300bn this year and could require measures including an increase in income tax, the end of the triple lock on state pension increases and a two-year public sector pay freeze.

The Telegraph can reveal that a Treasury document drawn up for Rishi Sunak, the chancellor, sets out a proposed “policy package” of tax increases and spending reductions which may have to be announced within weeks in order to “enhance credibility and boost investor confidence” in the British economy.

The document, dated May 5 and marked “Official – market sensitive”, reveals that the “base case scenario” now forecasts that Britain will have a £337bn budget deficit this year, compared to the forecast £55bn in March’s budget.

According to the report, the document says the Conservatives might have to break the “tax lock” promise they made at the election.

[The Treasury document] states: “To fill a gap this size [in the public finances] through tax revenue risers would be very challenging without breaking the tax lock. To raise fiscally significant amounts, we would either have to increase rates/thresholds in one of the broad-based taxes (IT, NICS, VAT, CT) or reform one of the biggest tax reliefs (eg pensions tax).”

And the document also floats the prospect of spending or welfare cuts, the Telegraph reports.

The document suggests a two-year freeze on public sector pay could generate savings of £6.5 billion by 2023-24 while “stopping the rising cost” of the pension triple lock would produce savings of £8 billion a year.

The Treasury declined to discuss the report last night, but a source said it the document “does not reflect government policy”.

This morning, in an interview on LBC, Grant Shapps, the transport secretary, was evasive about the possibility of tax increases.

Theo Usherwood

Mr Shapps dodges Q from @NickFerrariLBC about possibility of tax rises and spending cuts.

“We are only part way through this crisis…. We’ll deal with everything else once we know the full cost of it but we can’t know that until we know how long the tail of this virus is.”

May 13, 2020

But on Sky News, echoing language used by Boris Johnson, Shapps was more emphatic about the government rejecting a return to austerity. He said:

In terms of payment, we’ll have to have future budgets, we’ll get to that, but right now we are still in the midst of this thing and we’re clear that we’re not going to go back to world of austerity in order to do that.


Public sector pay freeze after crisis would be ‘morally bankrupt’, says Police Federation

The chairman of the Police Federation of England and Wales has said a public sector pay freeze to help the country’s financial recovery post-coronavirus would be “morally bankrupt” and a “deep and damaging betrayal”.

In a series of tweets this morning, John Apter said the public sector workforce had “stepped up to save lives… often putting themselves at risk and making personal sacrifices”.

The Telegraph reported this morning (paywall) that a confidential Treasury document drawn up for the chancellor, Rishi Sunak, sets out a series of proposed measures including an increase in income tax, the end of the triple lock on state pension increases and a two-year public sector pay freeze.

The report said the policies may need to be announced within weeks, with the document saying it is now forecast Britain’s budget deficit will rise to £337bn, compared to the £55bn forecast in March’s budget.

Apter said doctors, nurses, paramedics, prison officers, teachers, firefighters and many more had been the glue which held the country together during the crisis, and “if there is any consideration in financially punishing our public sector workers then I urge a rethink”.

He finished by saying:

John Apter

The Chancellor, @RishiSunak and thousands of others have clapped for our key workers every Thursday. To even consider freezing the pay of our essential public sector workers to help the financial recovery would be morally bankrupt and would be a deep and damaging betrayal.

May 13, 2020


The number of vehicles sold by Aston Martin almost halved in the first three months of the year, as the British luxury carmaker was hit by the beginning of the coronavirus crisis.

The company said it had sold 578 vehicles in the first quarter, down from 1,057 in the same period last year.

It caused loss after tax to soar to £118.9m, up from £17.3m the year before, on revenue of £78.6m, down 60%.

“Covid-19 and the resulting global economic shutdown has had a material impact on our performance this quarter,” said Dr Andy Palmer, president and group chief executive.

All its manufacturing sites in the UK were closed from 25 March, and 93% of its network of dealers shut their doors at some point during the first quarter. Unsurprisingly, demand from dealers had been hit during the crisis.

Sales in China dropped by 86%, with the Europe, Middle East and Africa region dropping 30%. Sales tumbled by 57% in the Americas. The UK was more resilient, falling a mere 3%.

However, the company revealed what could be the first shoots of recovery. All 18 of its dealerships in China have reopened, and more than 15% of the global network are “fully open”.

On Monday it started producing bodies for its first luxury SUV at the St Athan factory, which opened last week.

Despite positive signs, most of Aston Martin’s staff are still furloughed, and its factories are only working to fulfil the orders they already have.

The company had already been struggling before the crisis hit, and its share price is down 93% compared to when it listed in October 2018.


Too many people on public transport could mean return to staying at home – Shapps

The transport secretary, Grant Shapps, has warned that the country will have to “go back to staying at home” if too many people try to use the public transport system.

He told BBC Radio 4’s Today programme:

If we see the R number go up again – particularly above one – we will have to take steps.

We all know what that means – it means going back to staying at home.

We have got a big team of marshallers going out through Network Rail, Transport for London, we have got the British Transport Police out there, and we are even bringing in volunteers to remind people that we don’t want to see platforms crowded.


As stark figures on Covid-19 deaths among BAME nurses emerge, we need to celebrate their generations-long contribution.

Despite accounting for just 20% of the workforce, 94% of doctors and 71% of nurses who have died from Covid-19 were black, Asian and minority ethnic. It has prompted NHS England to recommend risk assessments for BAME frontline staff to reduce their exposure to the virus.

Other pandemics have also proven deadly for medical staff. Health workers caught flu during both the 1918 and 1957 and 1968 flu pandemics.

And while an ethnic breakdown of the data is not available, some of the casualties of the 1957 and 1968 epidemics will have been black, Asian or from ethnic minorities.

It is even possible some BAME nurses working in the UK died in the 1918 epidemic. We just don’t know. But nurses from BAME backgrounds have been working in the NHS for generations.

Although many were part of the Windrush generation, coming from the Caribbean to the UK from 1948 to 1971 to work in the newly established NHS, they were not the first arrivals.

By 1954, more than 3,000 Caribbean women were training in British hospitals. By 1959, official statistics showed 6,365 nursing students in Britain who had come here from overseas. By 1966-67 the total number of nurses and midwives from overseas who trained here had risen to 16,745.

Research (Aunt Esther) by social historian Stephen Bourne has revealed that black nurses worked in the healthcare system long before the NHS was even thought of. Most would have been from within the British empire, including the Caribbean, India and countries in Africa.

An “extraordinary, exceptional and astonishing” GP has died aged 84 after contracting coronavirus.

Dr Karamat Ullah Mirza worked at Old Road Medical Practice at Clacton-on-Sea in Essex.

He died in hospital on Sunday.

His widow, Estelle, told the Clacton Gazette:

He was no ordinary man, he was an extraordinary, exceptional and astonishing man, who was absolutely fearless and daring and had enormous knowledge.

He worked endlessly for the NHS and non-stop for this country, and he was known and loved by everyone in Clacton and he loved all his staff and patients and this town.

She said he had been seeing patients until two weeks ago.

Dr Ed Garratt, chief executive of the NHS Ipswich & East Suffolk, NHS West Suffolk and NHS North East Essex clinical commissioning groups, said:

We are deeply saddened to learn of the death of Dr Mirza, a respected and much-loved GP who had served the patients in his local community for more than four decades.

Our thoughts and prayers are with his family and practice colleagues, and all our efforts will be focused on supporting them at this difficult time.

A small number of people who had contact with Dr Mirza are self-isolating at home as appropriate.

The Old Road Surgery in Clacton and its branch practice in St Osyth will be closed until Wednesday of this week at the earliest.

Both have undergone deep cleansing as a precaution.

Rebecca Smithers

Food waste generated by UK restaurants dishing up takeaways during the lockdown has risen as a result of consumers’ “unpredictable ordering patterns” during the pandemic, research has revealed.

Unusual fluctuations in demand have led to an increase in food waste generated in takeaway outlets rising from an average of £111 per restaurant per week in normal times to £148 – equivalent to a £16.7m rise for the sector as a whole since lockdown, according to the research.

Nearly half the restaurants surveyed – 45% – said they throw most food waste into the bin. Despite the erratic ordering patterns, consumers appear to be wasting less than they usually would in their own homes, the report found.

Britain’s fondness for takeaway food has created a £5bn-a-year business that has ballooned in the past decade. In recent weeks, the options have expanded as many restaurants have turned to takeout and delivery as an alternative to closure.

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