Budget 2020: Rishi Sunak turns on the spending taps as he unveils £600bn ‘plan for prosperity’
Rishi Sunak has promised to pump billions of extra pounds of public spending into the UK economy over the next five years as part of a "plan for prosperity" to combat stalling growth.
Unveiling his first Budget, the Chancellor vowed to "invest more than £600bn pounds in our future prosperity", with a major boost for both infrastructure and day-to-day spending on public services promised.
The moves came alongside a £30bn package of measures aimed at combating the spread of the coronavirus, and as the Government's spending watchdog revised its growth forecasts downwards.
Mr Sunak also shelved planned rises in beer, cider and wine taxes, while fuel duty will stay frozen for another year following an outrcy from Conservative backbenchers.
Unveiling a Budget he billed as "brave and bold", Mr Sunak said: "Over the next five years, we will invest more than £600bn pounds in our future prosperity. Public net investment will, in real terms, be the highest it has been since 1955."
The move came as the Office for Budget Responsibility predicted that economic growth will now be just 1.1% this year, down from 1.4% predicted at the Spring Statement.
In figures that do not yet take account of the impact of the global virus outbreak, the OBR also revised down its 2021 growth projection from 1.8% to 1.6%; its 2022 the prediction from 1.5% from 1.6%; and its 2023 figure from 1.6% to 1.3%.
But Mr Sunak said his big-spending Budget would help soften the impact of slowing economic growth.
He told MPs: "The OBR have said that, as a direct result of the plans I’m announcing, growth over the next two years will be 0.5 percentage points higher than it otherwise would have been."
Among a slew of big-spending measures announced by the Chancellor are a £4bn annual increase in research and development spending, a move that Mr Sunak said would take R&D spend to "the highest in nearly forty years".
He also pledged "the biggest ever investment in strategic roads and motorway", with more than £27bn of new road spending earmarked.
The Chancellor also unveiled a radical review of the Treasury's 'green book' spending rules, which critics say have long favoured investment in London and the South East of England.
Mr Sunak told MPs: "We as a party know that talent is evenly spread in this country, but opportunity is not. We have to put that right. We need to build the infrastructure that will lay the foundations for a new century of prosperity.
"We need to grab the opportunity to upgrade, to improve, to enhance, to level up. That starts today with the next part of our plan – as we get Britain building."
An extra £640m has also been promised to the for the Scottish Government, £360m for the Welsh Government, and £210m for the Northern Ireland Executive.
The Budget was notably light on tax-raising moves from the Chancellor, with the Government vowing to freeze fuel duty for the tenth consecutive year despite briefings in recent weeks that the pause would be lifted.
Alcohol duties will also be frozen, while VAT on digital publications will be scrapped and the so-called tampon tax - which sees VAT applied to women's sanitary products - has also been junked.
Urging MPs to back the Government's plan, Mr Sunak said the Budget would deliver "security today" as well as laying "the foundations for prosperity tomorrow".
And he vowed: "This is the Budget of a Government that gets things done.
"Creating jobs. Cutting taxes. Keeping the cost of living low. Investing in our NHS. Investing in our public services. Investing in ideas. Backing business. Protecting our environment.
"Building roads. Building railways. Building colleges. Building houses. Building our Union. A Budget that delivers on our promises. A People’s Budget from a People’s Government."