Sunak’s Bold Budget
Source: The Independent (https://www.independent.co.uk/voices/rishi-sunak-boris-johnson-coronavirus-crisis-chancellor-jobs-a9415946.html).
Wednesday saw the announcement of the crucial budget for the forthcoming year; delivered by Chancellor, Rishi Sunak within the Conservative dominated House of Commons. Everyone’s eyes were firmly fixed on this budget considering these critical circumstances the country is currently facing. This uncertain and frightening environment has been produced as a result of the novel coronavirus of which arrival meant the budget had to be swiftly altered to deal with the challenging economic consequences it brought.
What exactly did Sunak offer up in his budgetary debut? The £30bn package is attempting to support the UK’s nervous economy through these risky times. This package comprised key initiatives to combat coronavirus including a suspension of business rates for firms in retail, leisure and hospitality sectors with a rateable value below £51,000. A £5bn emergency response fund has also been made available for the NHS and other public services experiencing severe pressure. Additionally, the budget has also pledged statutory sick pay to those advised to self-isolate, even if they have not showed symptoms. In relation to fiscal measures, the threshold for national insurance contributions is set to rise from £8,632 to £9,500 consequently bringing a further 500,000 individuals from the tax ladder and the so-called ‘tampon tax’ has been scrapped. The Government has also finally responded to the events of Grenfell by providing a £1m building safety fund in order to help with the removal of unsafe cladding.
This budget represents the governments most ‘generous’ package since 1992 and Sunak accompanied these assurances by declaring that the UK “will get through this together” but how have the public and other politicians received this new budget? Leader of the Opposition, Jeremy Corbyn embraced some of the initiatives as necessary measures however labelled the budget as an “admission of failure” and claims it will not make up for the damage effectuated from years of Conservative austerity with the fund for the NHS being “too little, too late”. Even ‘money saving expert’ Martin Lewis criticised the budget by claiming that Mr Sunak has summoned a ‘magic money tree’.
One of the pressing questions therefore is where is all of this money going to come from especially considering there are no notable tax increases? Borrowing, a lot of borrowing. In order to deliver this huge economic stimulus, the Government are going to have to enter a hefty overdraft which will no doubt be a burden to pay off in future years to come. Although this extensive borrowing may be criticised by many to be excessive perhaps and Labour may be quick to label the Conservatives as a party of hypocrites, Sunak and the Treasury would confidently respond to such disparagements saying that difficult times call for difficult measures.
by Oliver Watt