Stick with Guido for live updates of Rishi’s budget announcements. Stay tuned…
12.30 – Coronavirus
Rishi turns immediately to Coronavirus, saying “we will get through this together”
COVID-19 will cause a temporary disruption to the economy; on the supply side, up to 20% of the working population may be off work at any one time. Consumer spending will also fall. This will be temporary, however.
Whatever extra resources the NHS needs to cope with COVID-19 it will get, whether that be millions or billions
Statutory sick pay will be available for all those who are advised to self-isolate – even if they don’t have symptoms. 111 will also be able to provide sick notes rather than needing to go to GP
Temporarily removing the minimum income floor for universal credit, and requirement to visit a jobcentre also dropped – can now complete whole process over the phone
£500 million hardship fund given to local authorities for vulnerable people in their area
Total cost of coronavirus packages comes to £1 billion
For businesses with fewer than 250 employees, statutory sick pay for up to 14 days off will be reimbursed by the government. £2 billion cost
New temporary coronavirus disruption loan scheme, with government covering 80% of loans up to £1.2 million from banks to tide SME over
Retail, leisure and hospitality industry to see business rates abolished entirely this year – over half of UK businesses; review of wider business rates policy to be launched later this year
£3k cash grant to 700,000 of the country’s smallest business at cost of £2 billion to exchequer.
Sunak values COVID-19 fiscal stimulus measures at £30 billion
12.51 – Forecasts
Even before COVID-19 hit, we were facing slowing economy
£175 billion to be announced for spending over the next 5 years, as a result growth will be 0.5% higher over the next two years than it otherwise would have been
OBR estimates that today’s plans should boost potential output as well as growth; productivity will increase by 2.5%
1.4% inflation expected this year, followed by 1.8% next year and the rest of the period within target
“Important we update our fiscal framework” – low and stable inflation, low interests rate, independent Bank of England, but debates about these measures are rising. Rishi to take time to consider these debates over the coming months
Today’s budget will stick to manifesto’s fiscal rules. Budget delivered within the manifesto’s fiscal rules but with room to spare
£12 billion budget surplus expected by 2022
Debt set to fall from 79% to 75% over next five years, however Coronavirus policies haven’t been included with those forecasts
13.00 – Announcements
Sunak confirms Tory manifesto NI rise, from £8,632 to £9,500
Tampon tax abolished, no VAT on sanitary products
Living wage to rise £10.50 by 2024
£1 million to support Scottish food and drink overseas and £10 million to help distilleries go green. Planned spirits duty rise scrapped
Business rate discount for pubs rises from £1,000 to £5,000, cider and beer duty rise scrapped
Fuel duty remains frozen
Entrepreneurs relief not fully abolished, but reduced lifetime limit from £10 million to £1 million, 80% of small business owners unaffected and all money saved returns to businesses through new more effective reliefs
R&D spending increased to £22 billion, highest in nearly 40 years. Aim to raise to 2.4% of GDP.
£1.4 billion invested at research centre in Weybridge
£1.9 billion on space and electric vehicles
13.12 – Environment
Tax rises on pollution. Climate change levy on electricity frozen on electricity and rising on gas
New plastic packaging tax from 2022, £200 per tonne on packaging made with less than 30% recycled plastic
Red diesel is a tax relief on 14 million tonnes of carbon dioxide, so tax relief abolished for most sectors – won’t take effect for two years, and agriculture, rail, domestic heating and fishing will retain the relief
£1 billion invested into green transport solutions, including electric car charging station investment
£120 million to those areas affected by winter floods and doubling flood defence investment to £5.2 million
30,000 hectares of trees to be planted
Britain can lead the world on carbon capture and storage, so £800 million invested to establish two or more carbon capture clusters by 2030, creating up to 6,000 jobs in areas like Teesside and Humberside
13.18 – Building
£600 billion to be invested in infrastructure. Capital budgets in 2024 alone will be over £120 billion
Change the whole mindset of government, reviewing the treasury green book
Ultimate ambition to move 22,000 civil servants outside of London – Sunak stops short of detailing where the new Treasury campus will be located
West Yorkshire getting devolution deal, with £4.2 billion extra for existing metro mayors
Scotland get £640 million; Wales: £360 million; Northern Ireland: £210 million
£27 billion of roads investment, 4000 miles of road plus £2.5 billion pothole fund
13.25 – Education
£1.5 billion to improve the Further Education system
£30 million for primary school sports
£90 million a year for arts programmes in secondary schools
Sunak abolishes the ‘reading tax’; books, newspapers and magazines will have no VAT charge
13.28 – Housing
£12.2 billion for affordable homes
£650 million for rough sleeping
£1 billion building safety fund to remove combustible cladding from any social residential building above 18 metres high
13.31 – NHS
Sunak sticks to corporation tax level to fund the NHS
Increasing immigration health surcharge from £400 to £624, with discount for children
Extra funding for HMRC to clamp to £4.4 billion of tax avoidance
National insurance contribution break for employers of veterans
£34 billion over five years already announced, Sunak announces an extra £6 billion
Next spending review launched, to conclude in July
UPDATE: OBR forecasts £14.6 billion higher this year, nearly £30 billion higher the year after. Total borrowing will be £66.7 billion, similar levels to the middle of the last decade