Just four weeks into his job as Chancellor, Rishi Sunak delivered not only his first Budget but also the UK’s first Budget for 47 years as a non-EU member and the first in this decade.
In a speech dominated initially by Covid-19 the Chancellor confirmed that the Government would do “whatever it takes” to overcome this temporary, but significant, setback to the UK’s financial stability and to protect its continued recovery from the Grand Recession.
Measures announced included a £7bn package of support for businesses and individuals including temporary reforms to Statutory Sick Pay, Universal Credit and business rates, a government backed £100m Coronavirus Business interruption Fund, and a £5bn emergency fund. All topped off with an additional £18bn of what the Chancellor referred to as additional fiscal loosening.
All good so far and a robust response to a global crisis, but to be honest I then lost track of the numbers as the Chancellor opened the floodgates to a package of significant spending initiatives, in addition to the £600bn of infrastructure projects announced at the time of the election. These included commitments to an additional £6bn NHS Funding Settlement, £2.5bn to be spent on removing potholes and £1.3bn on technology and funding of research and development.
It will be interesting to see how the Office for Budget Responsibility models this particularly as the figures put forward by the Chancellor excluded the impact of Coronavirus and simply confirmed that we had the capacity to loosen the fiscal purse strings.
In terms of taxation Entrepreneurs Relief survived, but only just, with the lifetime limit being reduced to £1m for all disposals from 11 March 2020, but there were no significant changes to Inheritance Tax despite the recommendations of the Office for Tax Simplification and the All Party Parliamentary Group. These will surely come later in the year.
Finally, the Government listened to recommendations from those working in the NHS and Healthcare sector and increased the limit at which pension contributions are tapered to £200,000. 98% of doctors working in the NHS will no longer be affected and it will no longer prove to be a disincentive for them to undertake extra shifts or hours.
More details to follow as we get them.
