Chancellor Rishu Sunak driven a coach and horses through 10 years of Tory austerity – going on a borrowing splurge as he pours £12billion into tackling the coronavirus outrbreak.
Today's Budget – the first in 17 months – announced a shake-up in benefits and sick pay rules and a stimulus for businesses like pubs and music venues to deal with a slowdown from COVID-19.
Fuel duty was frozen for the 10th year in a row with no rises to taxes on beer, wine, spirits or cider.
And National Insurance contributions will be cut, saving middle and higher earners £85 a year.
The Chancellor said £12bn would go on measures to tackle Coronavirus, plus another £18bn of "fiscal loosening" to help the economy more generally – a £30bn total.
There was also money for the environment, including a new plastics tax. He promised extra funds for broadband, road building and further education.
But in return borrowing per year will almost DOUBLE per year by 2024 – driving a coach and horses through a decade of failed Tory pledges to rebalance the economy after the Labour years.
And a sting in the tail includes a tax on gas suppliers that could see household bills rise by £5 a year. Meanwhile there was nothing for social care, no action on child benefit and no help for cash-strapped councils.
Meanwhile shake-ups to red diesel and entrepreneurs' relief could prove controversial down the line.
And with GDP growth down to just 1.1%, Jeremy Corbyn warned the UK enters the COVID-19 crisis with its public services "on their knees" and with a "fundamentally weak" economy.
Here are all the key announcements from the Budget at a glance.
- £30bn in total (including lending) – split into £12bn of specific coronavirus measures and £18bn of other collected 'fiscal loosening' elsewhere in the Budget
- Statutory sick pay available from day one, not the fourth day of illness
- It will be available to all those who self-isolate, not just those actually ill
- Government will refund sick pay costs incurred by small firms with fewer than 250 workers
- But still not available to self-employed or workers on under £118 a week
- For those workers, ESA sick benefit will be available from Day 1 not Day 8
- Minimum Income Floor in Universal Credit for self-employed to be temporarily axed
- People won't have to physically visit a Jobcentre to get benefits
- Businesses get up to £1.2bn in Coronavirus Business Loan Interruption Scheme
- £2.2bn grant scheme for small firms and dedicated helpline to defer tax payments
- £5bn COVID-19 "response fund" to support NHS and other public services
Corporation Tax cut will be cancelled, keeping rate at 19% and netting Treasury up to £7.5bn a year
Inheritance tax threshold from April 2020 is due to hit £500,000 including property, making the tax-free sum for married couples a cool £1million
No national insurance contributions on the first £9,500 of your earnings – up from £8,632 at the moment – working out as a saving of around £85 a year
Tampon tax abolished (the 5% VAT charged on women's sanitary products) from January 2021
Wages and pensions
Minimum wage for over-25s will rise by 51p to £8.72 an hour from April. It will also rise to £8.20 (age 21 to 24), £6.45 (18 to 20), £4.55 (under 18) and £4.15 (apprentice)
National Living Wage will reach two-thirds of median earnings by 2024 – forecasting a wage for over-25s of £10.50 an hour
Victory for doctors and nurses as pension tax rules changes – those with income under £200,000 can now work overtime without affecting their pension in a 'cliff-edge' situation
- But no help for WASPI women who had to wait far longer for their pension
Hand rolling tobacco duty to rise at RPI + 6% at 6pm on Budget Day
Vehicles and petrol
- Fuel duty frozen for the 10th year in a row
- Massive £1.6bn-a-year cut to polluting red diesel tax relief – with only a few industries like agriculture and fishing exempted
Growth figures and Treasury rules
- Massive increase in borrowing per year – up from a projected £33.3bn in 2023/24 to £60.2bn
- Treasury's 'fiscal rules' limiting borrowing could be ripped up, with review until July
- GDP growth sinks to just 1.1% this year, down from predicted 1.4% – and that's BEFORE coronavirus
- Debt to stay high at 75.2% of GDP in 2024/25 – BEFORE coronavirus is factored in
NHS and social care
- £6bn of 'new' NHS funding announced in Budget
- Including £100m in 2020/21 to make progress on Boris Johnson's 40 'new' hospitals
- Health Department capital budget to rise by £683m in 2020/21
- But there is NO new funding for social care in the Budget (apart from as part of the coronavirus support fund) despite a cash crisis
- Immigration Health Surcharge soars to £624 a year for non-UK nationals to use the NHS
- New £1bn fund to remove unsafe cladding after Grenfell
- £643m for accommodation and support services for rough sleepers – creating up to 6,000 places to live, funded by…
- Non-UK residents hit with 2% Stamp Duty surcharge from April 2021
- £12.2bn in total 2020/21 grant funding for affordable homes programme, some of which was already announced
- £1.4bn will be invested in the science institute at Weybridge, where scientists are working to analyse coronavirus samples “as we speak”
At least £800m will be invested in a new “blue skies” funding for science here in the UK
£400m of new funding will be invested into “high quality” research including around the country, not just in London and the south east.
Armed Forces, police and justice
- Special domestic abuse courts where criminal offences are heard alongside family law cases will be set up under a £5million trial
Treasury offices will be beefed up in the nations of the UK
Economic campus in the north with 750 staff from the Treasury and Business, Local Governent and Trade departments
In the long term, ambition to move 22,000 civil servants outside central London
£242m of funding for new city and growth deals, taking investment in them in total to £2.7bn
- Air Passenger Duty frozen on short-haul flights at £13
- But APD rises at £2 for long-haul economy, £4 for long-haul premium classes, and £13 for long haul private jets
- A £2.5billion drive to repair 50 million potholes over the next five years
- £27bn investment in English roads between 2020 and 2025 in total
- Stonehenge tunnel two miles long to be built on the A303
- £500 million over the next five years for fast-charging network for electric vehicles
- A66 Trans-Pennine route dualled
- M60 Simister Island in Manchester to be improved
- Build the Lower Thames Crossing east of London
- £20m to develop the Midlands Rail Hub
- Confirm £1bn of allocations for transport from the Transforming Cities Fund
- 15 local road upgrades across the country
- £3bn Entrepreneurs Relief cut by up to £1.8bn a year by reducing the 'lifetime limit' on the benefit for small firms from £10m to £1m . Chancellor claims 80% of firms unaffected, but it's a huge cut.
- Business rates retail discount rises from 50% to 100% in 2020/21 for small firms (properties with a rateable value under £51,000)
- Pubs' business rates discount rises from £1k to £5k for those with rateable value under £100k
- A £5billion by 2025 programme of super-fast broadband
- Consultation into the long-term future of business rates
- Treasury is expected to start talks with the industry on protecting cash machines for the poorest
- Funding for flood defences is expected to be doubled to £5.2 billion over the next six years
A new Green Gas Levy that could reportedly add £5 a year to energy bills
£120m will be available immediately to repair all flood defences damaged this winter
Another £200m will be provided directly to local communities to build their local resilience.
Manufacturers will be charged £200 a tonne on non recycled plastic from April 2022
Freeze the levy on electricity from April 2022 but raise the levy on gas to help tackle the climate crisis
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