What’s flashy Rishi got in his red box?
Sunak drops hints in promotional video about his plan for Britain’s economic recovery from coronavirus pandemic
RISHI Sunak has been mocked for issuing a flashy promo video ahead of his Budget promising support for people during the coronavirus crisis is “not going to stop”.
The Chancellor said his statement tomorrow will be characterised by “honesty and fairness”.
But opponents warned he could be building the Covid recovery on the backs of the poor if he doesn’t turn on the public spending taps and maintain benefit support.
Labour MP Jonathan Ashworth joked, “The ego has landed” after a five-minute video of Sunak was released online by the Treasury.
It features an interview with the Chancellor intercut with footage of the year’s events and a dramatic soundtrack.
Sunak had only three weeks to prepare for his first-ever Budget last year and it came on the cusp of a pandemic that plunged the UK economy into its worst downturn in more than 300 years.
The Treasury spent about £280billion providing emergency support for the economy and the national debt is now £2trillion, 100 per cent of gross domestic product,
Financial watchdog the Office of Budget Responsibilty (OBR) believes that in 2021 we will see the fastest economic growth for almost 50 years, with the deficit in 2020-21 coming in well below November’s estimate of £394billion.
But the OBR predicts there will be a persistent problem with public finances as the economy won’t recover to its pre-pandemic path.
And with less tax income, there will be inevitable cuts in public spending unless the Government takes action.
In the video, Sunak said he wanted young people not to be a “generation scarred by coronavirus” but the “kickstart generation” – a reference to his programme to help them into work.
He indicated support schemes would be extended as Britain begins to exit lockdown.
Sunak praised the “spirit of resilience” shown by the public and promised: “At the heart of this Budget will be honesty and fairness. Honesty about our situation, both in the short term – where we’re still grappling with coronavirus and want to keep providing support – but also honesty about our long term, with exciting opportunities to drive new growth across the country.”
So, what can we expect?
EXTEND £20 UNIVERSAL CREDIT UPLIFT (BUT NOT MAKE IT PERMANENT)
Sunak confirmed he will bow to pressure from opposition and poverty campaigners to maintain the £20-a-week rise in Universal Credit he introduced in the first lockdown for another six months with a phase-out after that. Opponents want to make the increase permanent to stop families plunging back below the poverty line.
TAX RATES
Scotland sets its own income tax rates now but the UK
Treasury still sets the weather on what Scots expect to pay.
Sunak could freeze tax bands for the next three years in England, pushing 1.6million into a higher bracket without breaking Tory manifesto promises not to raise taxes – sneaky but effective.
But the Chancellor will “level” with people that the deficit, or public debt – which now stands at £2trillion, 100 per cent of gross domestic product – will have to be paid back. If taxes don’t go up then public services, already
EAT OUT
THE controversial “Eat Out to Help Out” discount scheme for restaurants, which was launched last year, could see a comeback in some shape or form. Pubs, restaurants and shops will share £5billion of grants to get them back on
their feet.
Although the levelling up policy was only meant to apply to England, according to the Treasury an extra £800million will be added to the £4billion to be spent in the devolved nations.
The Tory Government will also use powers from the Internal Markets Act to push Whitehall spending into previously devolved areas where EU funding was formerly administered by the Scottish Government.
Bypassing Holyrood is a “naked power grab” in the SNP’s book and a constitutional flashpoint but the extra money will be welcome.
JOBS LEVELLING UP AGENDA ACROSS THE UK
Spend big in 2021-22 to protect jobs while coronavirus restrictions remain in place, and then to kickstart the economic recovery as they are relaxed.
Sunak will increase the temporary cash bonus to firms taking on an apprentice to £3000 – but it’s not enough, says former PM Gordon Brown.
Sunak is also preparing to announce locations of freeports, or special economic zones with low taxes, and Scots locations could be among places named.
ENVIRONMENT
hacked to the bone, will have to be cut.
With Glasgow hosting the UN COP26 climate summit in November, the Budget will have a green focus. There will be more than £25million to help the North Sea oil industry and the new national investment bank will help steer the UK towards its net zero carbon emissions target by 2050.