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Chancellor Rishi Sunak has delivered his first Budget in the House of Commons, announcing the government’s tax and spending plans for the year ahead.
Here is a summary of the main points.
Coronavirus response
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- £5bn emergency response fund to support the NHS and other public services
- Statutory sick pay will be paid to all those who are advised to self-isolate, even if they have not presented with symptoms
- Self-employed workers who are not eligible for sick pay will be able to claim contributory Employment Support Allowance
- The ESA benefit will be available from day one, not after a week as now
- £500m hardship fund for councils to help vulnerable people
- Firms with fewer than 250 staff will be refunded for sick pay payments for two weeks
- Small firms will be able to access “business interruption” loans of up to £1.2m
- Business rates in England will be abolished for firms in the retail, leisure and hospitality sectors with a rateable value below £51,000
Personal taxation, wages and pensions
- National Insurance Contributions tax threshold to rise from £8,632 to £9,500 – saving 500,000 employees just over £100 a year
- 5% VAT on women’s sanitary products, known as the tampon tax, to be scrapped
- No other new announcements on income tax, national insurance or VAT
- Tax paid on the pensions of high earners, including doctors, to be recalculated
Alcohol, tobacco and fuel
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- Fuel duty to be frozen for the 10th consecutive year
- Duties on spirits, beer, cider and wine to be frozen
- Tobacco taxes will continue to rise by 2% above the rate of retail price inflation
- This will add 27 pence to a pack of 20 cigarettes and 14 pence to a packet of cigars
- Business rate discounts for pubs to rise from £1,000 to £5,000 this year
Business, digital and science
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- System of High Street business rates to be reviewed later this year
- Entrepreneurs’ Relief will be retained, but lifetime allowance will be reduced from £10m to £1m
- £5bn to be spent on getting gigabit-capable broadband into the hardest-to-reach places
- Science Institute in Weybridge, Surrey to get a £1.4bn funding boost
- An extra £900m for research into nuclear fusion, space and electric vehicles.
- VAT on digital publications, including newspapers, books and academic journals to be scrapped from December
Environment and energy
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- Plastic packaging tax to come into force from April 2022
- Manufacturers and importers whose products have less than 30% recyclable material will be charged £200 per tonne
- Subsidies for fuel used in off-road vehicles – known as red diesel – will be scrapped “for most sectors” in two years’ time
- Red diesel subsidies will remain for farmers and rail operators
- £120m in emergency relief for communities affected by this winter’s flooding and £200m for flood resilience
- Total investment in flood defences to be doubled to £5.2bn over next five years
- £640m “nature for climate fund” to protect natural habitats, including 30,000 hectares of new trees
Transport, infrastructure and housing
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- More than £600bn is set to be spent on roads, rail, broadband and housing by the middle of 2025
- There will be £27bn for motorways and other key roads, including new tunnel for the A303 near Stonehenge
- £2.5bn will be made available to fix potholes and resurface roads over five years
- Further education colleges will get £1.5bn in new investment in their buildings
- £650m package to tackle homelessness, providing an extra 6,000 places for rough sleepers
- Stamp duty surcharge for foreign buyers of UK properties to be levied at 2% from April 2021
- New £1bn fund to remove all unsafe combustible cladding from all public and private housing higher than 18 metres
The state of the economy and public finances
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- Economy predicted to grow by 1.1% this year, revised down from 1.4% a year ago
- The figure, which does not taking into account the impact of coronavirus, would be the slowest growth since 2009
- Growth forecast to rebound to 1.8% in 2021-22, 1.5% in 2022-23 and 1.3% in 2023-24
- Inflation forecast of 1.4% this year, increasing to 1.8% in 2021-2022
- Public sector net borrowing set to rise this year to 2.1% of GDP and to 2.4% and 2.8% in subsequent years
- The government is set to borrow an additional £96.6bn by 2023-2024.
- Debt as a percentage of GDP forecast to be lower at end of current Parliament than now
Nations and Regions
- An extra £640m for Scotland, £360m for Wales, and £210m for Northern Ireland.
- Treasury’s Green Book rules to be reviewed to put regional prosperity at heart of spending decisions
- Treasury to open new offices in Wales and Scotland
- New civil service hub in the North of England, employing 750 staff