Budget 2020: What to expect from Chancellor Rishi Sunak's first big moment amid coronavirus crisis
On Wednesday lunchtime Rishi Sunak will deliver his fist Budget as Chancellor - less than a month into the job and facing a backdrop of the ongoing coronavirus crisis. Here's what to look out for.
Whatever grand plans were being cooked up inside the joint Number 10 and 11 economic unit ahead of the post-election Budget they will have been shoved firmly to the back burner amid the ongoing COVID-19 outbreak.
The virus is having a much wider impact on society than just in public health, with a stock market slump, an economic blow to small and medium-sized business, the self-employed and sick pay, and a knock-on effect to the culture and tourism industries.
Mr Sunak pledged on Sunday to give the NHS “whatever it needs” to deal with the public health crisis, as an emergency bill is set to be tabled in Parliament.
Part of the legislation will ensure up to three million volunteers will be able to commit to supporting the health and social care system while having their day jobs protected for up to four weeks.
There will also be extra cash to fund test centres at hospitals and to purchase testing kits, with money set aside for GP surgeries, who are expected to face increased pressure.
On the economy side of it, a “hardship fund” will be set up for employers with up to 100 staff to recover some of the costs to their businesses.
Meanwhile small and medium-sized enterprises could be given short-term tax holidays, and the Treasury has discussed underwriting bank loans for firms and offering loans at cheap interest rates, similar to measures implemented in the wake of the 2008 financial crisis.
As usually happens, a number of other policies have already been pre-briefed by the Treasury, inclduing a package of nearly £100million to be spent “to make our streets safer, improve community sentences and support victims of rape and sexual assault”, including £70million to toughen up community sentences and strengthen the probation service, as well as £15million of funding for victims of rape and sexual abuse to improve their experience of the justice system.
And there will be a further £15million to tackle domestic abuse, with £10million for tackling high-risk, high-harm perpetrators through early interventions, and £5million to fund a trial of new domestic abuse courts.
The Chancellor will announce a cut in the 'jobs tax' by raising the Employment Allowance by £1,000, meaning all firms will not have to pay Employer National Insurance Contributions on the first £4,000 of their annual bill.
The Conservative manifesto promised there would be no increases in income tax, national insurance or VAT, so Mr Sunak is unlikely to break that pledge, although he has hinted he may break his predecessor Sajid Javid’s fiscal rules to increase borrowing to fund further public spending and kickstart Boris Johnson’s plans for 20,000 extra police officers and 50,000 more nurses.
BROADBAND & 4G
There will be £5billion spent on the rollout of next generation gigabit-capable broadband, which is 40 times faster than standard superfast broadband, in the most difficult 20% of the country. The Government says over 5 million homes and businesses are set to benefit.
The Chancellor is also set to announce a £1billion deal with the mobile phone industry to boost 4G coverage, which will significantly improve mobile signal, with the biggest improvements in Scotland, Northern Ireland and Wales.
The Chancellor is expected to double funding for flood defences to £5.2billion, to better protect 336,000 properties in England and help build 2,000 new defence schemes.
The Government will also announce a £120million Winter Defence Repair Fund to repair damaged flood defences in the wake of the devastation caused by unprecedented levels of rainfall last month.
The future of cash is expected to be secured at the Budget, with ministers moving to try and protect the two million people who rely on notes and coins for everyday spending. Expect new laws to ensure that those who rely on cash can access it as and when they need it.
The tampon tax is expected to be abolished at the Budget, with a zero rate of VAT applying to women’s sanitary products from the start of next year now that the UK is no longer legally bound by EU laws which mandate a 5% minimum levy.
Disabled people are set to benefit from £30million investment in new fully accessible public toilets, with the Chancellor also expected to confirm that fully accessible toilets will be compulsory in new public buildings by the end of the year.
Disabled passengers and older people will benefit from accessibility improvements at railway stations across the country, with Mr Sunak set to announce a £50million package to pay for lifts and ramps to create an obstacle-free, accessible route from entrance to platform.
There will be a new tax break for veterans looking to find a job back in civilian life, with a cut to the National Insurance contributions employers pay when they hire those who have recently left the armed services.
The Chancellor is expected to announce a further £10million of additional funds to support veterans with mental health needs via the Armed Forces Covenant Fund Trust.
Up to £3million will be committed to support the construction of a memorial to the Spitfire aircraft and all those who built or flew it in the Second World War, in commemoration of the 80th anniversary of the Battle of Britain in 2020.
A £643million investment to help deliver the Government’s promise to end rough sleeping by the end of this Parliament has been promised, with ministers saying it will help up to 6,000 people with the accommodation and services needed to turn their lives around.
The package includes £144million for general support services, including access to training, and £237million for new accommodation, along with £262million for substance misuse recovery services expected to help over 10,000 people a year.
A bumper exports package to support British business is set to be announced, including £5billion of loans through UK Export Finance to “encourage investment and help level-up the country through more jobs, higher wages and lower prices”.
Mr Sunak also plans to invest in the environment, with a £640million “nature for climate” fund to plant 75,000 acres of trees a year by the end of the Parliament, as well as restoring peatland.
The Government has previously promised to invest £100billion over the next five years - but it may put off any new announcements on top of the recently-approved HS2 until the coronavirus crisis eases off.
An end to the freeze on fuel duty has been mooted, despite strong opposition from a group of Tory MPs, but may be deferred once again by Sunak, however there is also a plan to scrap the £2.4billion diesel subsidy for users of farming and construction vehicles.