We are getting it done!
Chancellor Rishi Sunak opens his Budget speech with a statement about coronavirus. “I want to get straight to the issue most on everyone’s mind – coronavirus COVID-19. “I know how worried people are. Worried about their health, the health of their loved ones, their jobs, their income, their businesses, their financial security. “And I know they get even more worried when they turn on their TVs and hear talk of markets collapsing and recessions coming. People want to know what’s happening, and what can be done to fix it,” he tells MPs.
Mr Sunak said the Budget would provide for “security today” but he said it was also a plan for “prosperity tomorrow”. “It is a Budget that delivers on our promises to the British people. It is a Budget of a government that gets things done.” Chancellor Rishi Suinak has said he expects coronavirus to have a “significant impact” on the UK economy. “But it will be temporary,” he told Parliament. “People will return to work. Supply chains will return to normal.” Chancellor Rishi Sunak says there is “likely to be a temporary disruption to our economy.”
“On the supply side, up to a fifth of the working-age population could need to be off work at any one time. “And business supply chains are being disrupted around the globe. This combination of people being unable to work… and businesses being unable to access goods… will mean that for a period our productive capacity will shrink. “There will also be an impact on the demand side of the economy, through a reduction in consumer spending,” Mr Sunak says.
Following news that the Bank of England has reduced interest rates in an emergency response to the coronavirus, Mr Sunak said he had been in constant contact with the governor, Mark Carney. He said the Bank and the government would take a two-pronged approach. “Our responses have been carefully designed to be complementary and to have maximum impact, consistent with our independent responsibilities.” “The government’s response will use fiscal action to support public services, households and business.”
The government will give the NHS “whatever extra resources” it needs during the coronavirus outbreak, Chancellor Rishi Sunak says. “Whatever extra resources our NHS needs to cope with Covid-19 – it will get. “So, whether it’s research for a vaccine, recruiting thousands of returning staff, or supporting our brilliant doctors and nurses… whether it’s millions of pounds or billions of pounds… whatever it needs, whatever it costs, we stand behind our NHS.”
Following an announcement that the government will pay statutory sick pay from day one, rather than day four, Mr Sunak says “of course, not everyone is eligible for statutory sick pay”. “There are millions of people working hard, who are self-employed or in the gig economy. They will need our help too. So to support them, during this period, we’ll make it quicker and easier to get benefits.” Mr Sunak announces that a coronavirus loan scheme is to be introduced to cover the cost of salaries and bills will offer loans of up to £1.2m to support small and medium sized businesses. “The government will offer a generous guarantee on those loans, covering up to 80% of losses, with no fees, so that banks can lend with confidence,” he said. “This will unlock up to £1bn of attractive working capital loans to support small businesses, with more as needed.”
Mr Sunak has promised a £3,000 cash grant per business for any firm that is currently eligible for the small business rates relief. “This is a £2bn cash injection direct to 700,000 of our smallest businesses,” he tells the Commons. The chancellor says: “Our manifesto promised that for shops, cinemas, restaurants and music venues… with a rateable value of less than £51,000… we would increase their business rates retail discount to 50%. “Today I can go further, and take the exceptional step, for this coming year, of abolishing their business rates altogether.”
Chancellor Rishi Sunak says: “Museums, art galleries, and theatres; caravan parks and gyms; small hotels and B&Bs; sports clubs, night clubs; club houses, guest houses. They would not benefit from today’s measure – but they could be some of the hardest-hit. “So, for this year, I have decided to extend the 100% retail discount to them as well. “That means any eligible retail, leisure or hospitality business with a rateable value below £51,000 will, over the next financial year, pay no business rates whatsoever. “That is a tax cut worth over £1bn, saving each business up to £25,000.”
He says that the UK economy was facing a slowdown even before the coronavirus outbreak hit the country. But he said that the Office for Budget Responsibility had said the government’s “large planned increase in public investment should boost potential output”. “More investment and higher growth mean more jobs and higher wages. We already have more people working in our economy than ever before,” he said.
So how much is the government’s response to coronavirus worth? Chancellor Rishi Sunak summarises his Budget plans: “Taken together, the extraordinary measures I have set out today represent £7bn to support the self-employed, businesses and vulnerable people. “To support the NHS and other public services, I am also setting aside a £5bn emergency response fund – and will go further if necessary. “Those measures are on top of plans that I will set out later in this Budget, which provide an additional fiscal loosening of £18bn to support the economy this year. “That means I am announcing today, in total, a £30bn fiscal stimulus to support British people, British jobs and British businesses through this moment.”
Mr Sunak says the response to coronavirus has not yet been captured in the fiscal forecasts. “But the House will also note that the target year for our current budget fiscal rule is not until 2022-23,” he tells MPs. “So even within our current framework, I have the flexibility to act as required over the next two years.”
The National Insurance threshold will be raised £8,632 to £9,500 next month, Mr Sunak says. “That’s a tax cut for 31 million people, saving a typical employee £104,” he announces.
Mr Sunak says the Office for Budget Responsibility expects growth to be 0.5% higher over the next two years as a result of the packages he has announced. “The GDP forecast without fully accounting for the impact of coronavirus would have led to growth of 1.1% in 2020 and 1.8% in 2021, then 1.5%, 1.3%, and 1.4% in the following years,” he says.
Taxes on alcoholic drinks will not be going up in this Budget. Chancellor Rishi Sunak says: “Scotch whisky is a crucial industry – and our largest food and drink export.” The UK will “continue to lobby the US government” to remove a “harmful tariff” he says. “In the meantime, I’m announcing today £1m of support for promoting Scottish food and drink overseas and £10m of new R&D funding to help distilleries go green.” “And to further support the industry, I can also announce that this year the planned increase in spirits duty will be cancelled.” “I can announce that, exceptionally, for this year, the business rates discount for pubs will not be £1,000 – it will be £5,000. And I’m also pleased to announce that the planned rise in beer duty will also be cancelled.” “And because of decisions I’ve taken elsewhere in the Budget, I am also freezing duties for cider and wine drinkers as well. “For only the second time in almost 20 years, that’s every single one of our alcohol duties frozen.”
Mr Sunak announces that fuel duty will be frozen for another year. “I have heard representations that after nine years of being frozen, at a cost of £110bn to the taxpayer, we can no longer afford to freeze fuel duty,” he says. “I’m certainly mindful of the fiscal cost and the environmental impacts,” he continues. “But I’m taking considerable steps in this Budget to incentivise cleaner forms of transport. And many working people still rely on their cars. So I’m pleased to announce today that, for another year, fuel duty will remain frozen.”
Chancellor Rishi Sunak gets to the green part of his speech, including raising the levy on gas and a new tax on plastics packaging: “First, we will increase taxes on pollution,” he says. “Electricity is now a cleaner energy form than gas – but our climate change levy – paid by companies – taxes electricity at a higher rate. “So, as another step towards equalising the rates and encouraging energy efficiency, from April 2022 I’m freezing the levy on electricity and raising it on gas. “I will support the most energy-intensive industries to transition to net zero, by extending the climate change agreements scheme for a further two years.
“To tackle the scourge of plastic waste, we will deliver our manifesto promise to introduce a new plastics packaging tax. “From April 2022, we will charge manufacturers and importers £200 per tonne on packaging made of less than 30% recycled plastic. “That will increase the use of recycled plastic in packaging by 40% – equal to carbon savings of nearly 200,000 tonnes.”
The chancellor says he will scrap a scheme that allows companies in some sectors to pay duty of just over 11p per litre for diesel, compared to almost 58p per litre for everyone else. “But the sectors using red diesel are some of the biggest contributors to our air quality problem – emitting nearly 10% of the most noxious gases polluting the air of cities like London,” he tells MPs. “This is a tax relief on nearly 14 million tonnes of carbon dioxide every year”, which, he says, is the same as the entire population of London and Greater Manchester taking a return flight to New York. “It’s been a £2.4bn tax break for pollution that’s also hindered the development of cleaner alternatives. So I will abolish the tax relief for most sectors.” Mr Sunak has promised to spend £500m to support the rollout of new rapid charging hubs for electric cars, which he says will ensure that drivers are never more than 30 miles away from being able to charge their vehicle. He says the government will also invest £300m in tackling nitrogen dioxide emissions in towns and cities across England. “As well as taxing pollution – we will invest and cut taxes on clean transport,” the chancellor says. “We’re introducing a comprehensive package of tax and spend reforms to make it cheaper to buy zero or low emission cars, vans, motorbikes and taxis.”
Following widespread recent UK flooding, the chancellor unveils funding to boost flood defences. “I can announce today that I’m making £120m available immediately to repair defences damaged in the winter floods. “To support those areas that have been repeatedly flooded, I’m providing £200m of funding directly to local communities to build flood resilience. “And to protect people and over 300,000 properties, I’m doubling our investment in flood defences over the next six years to £5.2bn.”
Mr Sunak has confirmed reports that the government will boost spending on infrastructure. “We’re going to build broadband, railway, roads, he says, as he promises £5bn to get gigabit-capable broadband into the hardest to reach places and £510m of new investment into the shared rural mobile phone network He says that means 4G coverage will reach 95% of the country in the next five years.
He confirms plans to spend £2.5bn filling in pot holes, which he says is enough to repair 50 million potholes. There are some more green funding announcements in the chancellor’s Budget speech, including tree-planting and investment in carbon capture and storage. “We’re also supporting natural habitats like woodlands and peat bogs. I can confirm today that to protect, restore and expand these wonderful habitats – and capture carbon – we will provide £640m for a new nature for climate fund. “Over the next five years, we will plant around 30,000 hectares of trees – that’s a forest larger than Birmingham – and restore 35,000 hectares of peatland. “This government intends to be the first in history to leave our natural environment in a better state than we found it.
Mr Sunak lists the provision of affordable and safe housing as a priority. “Today I can make good our promise to extend the Affordable Homes Programme with a new, multi-year settlement of £12bn,” the chancellor says. He describes that as the largest cash investment in affordable housing in a decade, when the Conservatives came into government. “To support local authorities to invest in their communities, I’m cutting interest rates on lending for social housing by one percentage point, he says. Mr Sunak says that will make more than £1bn of discounted loans available for local infrastructure. “I’m confirming nearly £1.1bn of allocations from the Housing Infrastructure Fund to build nearly 70,000 new homes in high demand areas across the country.”
The chancellor promises to spend an extra £6bn on the NHS, which he says will pay for 50,000 more nurses, 50 million more GP surgery appointments and work to start on 40 new hospitals. He says the government has already pledged a “record” funding increase for the health service with £34bn promised over the next five years already promised. He says that is “the biggest cash increase in public services since the Second World War”.
The chancellor says: “The OBR have said that today’s Budget will be the largest sustained fiscal boost for 30 years. “Next year, day-to-day departmental spending will grow at the fastest rate in 15 years. “Over the spending review period, its set to grow at the fastest rate since 2004. An average growth rate in real terms of 2.8% – twice as fast as the economy. “That means that by the end of the Parliament, day-to-day spending on public services will be £100bn higher in cash terms than it is today.”
Mr Sunak finishes after speaking for an hour and three minutes.