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Chancellor Rishi Sunak has announced “the biggest Budget giveaway” in nearly 30 years, thanks to ballooning borrowing.
It included tax cuts and £100bn extra cash for public services over the next four years as Sunak set to make the Tories “the party of public services” and “the real workers’ party” with an unprecedented loosening of the purse strings.
Alongside a £30bn package to get
Britain through the coronavirus crisis – including help for workers, businesses and the health service, and £600bn of long-term infrastructure spending – the chancellor announced a raft of tax cuts and extra spending.
The fiscal loosening will see public sector borrowing balloon to a six-year high of £66.7bn in 2021-22 before falling to £57.9bn by the 2024 general election.
It amounts to the “largest Budget giveaway since 1992” with real day-to-day spending per person “back to pre-austerity levels”, according to the Office for Budget Responsibility – although
Labour leader
Jeremy Corbyn disputed its significance, saying it was simply the biggest spending boost since 2010 when austerity began.
Away from moves to help business with coronavirus, Sunak announced spending on:An extra £6bn for the NHS over the next four yearsLifting the threshold for paying national insurance tax to £9,500;Freezes in fuel and all alcohol duties;Scrapping the “reading tax” – VAT on digital versions of books, newspapers, magazines and journals;Boosting investment in research and development to £22bn;Pumping £27bn into road improvements;A £1bn building safety fund to ensure Grenfell-style combustible cladding is removed from high rises;A doubling in spending on flood defences to £5.2bn over six years;Extra funding for the government’s “affordable homes programme” to the tune of £3bn, to be available from the start of the 2021/22 financial year.Among the tax rises were a £6bn tightening of entrepreneurs’ tax relief, a plastic packaging tax on packaging made of less than 30% recycled plastic, while previously planned cuts to corporation tax were scrapped and it was frozen at 19%.Despite speculation that he would ditch the framework on spending set by predecessor Sajid Javid, Sunak said that his Budget is delivered “not just within the fiscal rules of the manifesto but with room to spare”.
But he signalled the rules, which ensure a chancellor balances the books on day-to-day spending without borrowing, would be up for review later this year.Sunak told the Commons: “This Budget delivers security today but it also lays the foundations for prosperity tomorrow.
“This is just the start.
“Over the next few months we will tackle the big issues head on – from our national infrastructure strategy to social care and further devolution.
“This is the Budget of a government that gets things done.”
Responding, Labour leader Jeremy Corbyn said the measures “go nowhere near reversing the damage” done by Tory austerity policies.
Corbyn said: “Today’s Budget was billed as a turning point, a chance to deliver, in particular on the promises made to working-class communities during the general election. But it doesn’t come close.
“The government’s boast of the biggest investment since the 1950s is frankly a sleight of hand. It’s in fact only the biggest since they began their slash and burn assault on our services, economic infrastructure and living standards in 2010.
“Having ruthlessly forced down the living standards and life chances of millions of our people for a decade, the talk of levelling up is a cruel joke.
“The reality is that this is a Budget which has an admission of failure – an admission that austerity has been a failed experiment. It didn’t solve our economic problems, but made them worse, that held back our own recovery and failed even in its own terms.”Related...
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