Budget Live

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

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