Chancellor Rishi Sunak outlined a massive spending spree and a £30bn package to shelter the UK economy through the coronavirus crisis in his 2020 Budget today, as the budget watchdog said he would borrow £100bn over five years to do so.
The Treasury boss, who had just four weeks to prepare for today’s Budget, even cracked a couple of jokes as he committed to ramping up public spending on infrastructure.
Sunak has a dig at McDonnell in 2020 Budget
Saying he would abolish “the reading tax”, Sunak said there would be no VAT to pay on digital publications from the end of 2020.
Digital newspapers and factual books would be exempt, he said, as would “works of fantasy”, Sunak quipped, such as shadow chancellor John McDonnell’s economic plan.
Sunak, who replaced Sajid Javid as chancellor in the February reshuffle, also managed to crack a joke when praising his Tory government for the UK’s record high employment rate.
“The story of this government has been the story of a national jobs miracle,” Sunak said.
He added: “Given the last few weeks we’ve had I am all in favour of job miracles.”
Read on for all the key 2020 Budget announcements from today, and links to read our coverage in full.
2020 Budget announcements:
- £5bn to support NHS resources’ response to the coronavirus crisis
- £500m hardship fund to help small businesses
- Earlier sick pay for people who self-isolate even without symptoms
- Sick pay refunds for firms with fewer than 250 staff
- Business rates abolished for firms with a rateable value below £51,000
- Small businesses can claim “business interruption” loans of up to £1.2m
- Government to review Air Passenger Duty tax
- National Insurance tax threshold to rise from £8,632 to £9,500
- Tampon tax to be scrapped
- Pensions tax relief threshold raised to £200,000
- Fuel duty frozen for 10th consecutive year
- Beer duty and spirits duty increase scrapped
- Pubs discount rate raised from £1,000 to £5,000
- Stamp duty hiked for overseas buyers
- Entrepreneurs’ relief reduced from £10m to £1m
- Corporation tax to stay at 19 per cent, revised up from a cut to 17 per cent
- Digital services tax of two per cent introduced on tech giants
- IR35 tax on contractors to roll out in private sector from April
£600bn infrastructure investment covering:
- £5bn to roll out full-fibre broadband across UK
- £510m to eliminate so-called mobile not-spots in 2020 Budget
- £27bn development of UK roads
- £2.5bn to fix potholes
- £100bn national infrastructure strategy
- £4.2bn fund for metro mayors of city regions
- Government’s 2020 Budget contains its biggest spending spree since 1992, according to Office for Budget Responsibility
- The government will fuel this spending by borrowing almost £100bn more in this parliament
- That figure does not include £12bn ringfenced to help the economy through coronavirus
- Borrowing will hit £66.7bn in 2021-22
- UK GDP growth to hit 1.1 per cent in 2020, down from prediction of 1.4 per cent (this does not take coronavirus into account)