Rishi Sunak’s first Budget as chancellor will have health at its heart – but it is unclear if funding for coronavirus will stretch any further than the NHS.
Just weeks after his appointment as chancellor, the former chief secretary to the Treasury has been elevated to the top job and must deliver a budget dominated by the worldwide health crisis. As council emergency planning departments and public health teams battles the virus at the weekend, Mr Sunak pledged to give the health service ‘whatever it needs’.
The looming pandemic has already started to hit the economy, and the Treasury has warned of a ‘challenging economic context’ to come. Predictions from the Office of Budget Responsibility are expected to downgrade the growth forecast since the last Budget in autumn 2018.
However, the forecasts were made before the spread of coronavirus. The reality is like to be far worse, potentially pushing us into a global recession.
The chancellor is widely expected to ignore the fiscal rules set out by his predecessors in order to invest. But plans for an infrastructure bonanza are likely to be on hold until the spending review as the Government tackles the crisis at hand before launching a spending spree.
Plans to ‘level up’ the UK economy are expected to include at least one devolution deal – possibly more – and capital programmes including a £5bn broadband investment programme. A £25m ‘data fund’ across central and local government, to analyse and improve economic data, is also expected.
A further £5bn is expected for flood defences, with extra cash also directed at repairing damage caused by the latest round of flooding.
In an effort to ease the pressure on businesses, Mr Sunak is expected to scrap the planned cut of corporation tax from 19% to 17%.
The long awaited business rates review is not expected until the summer, while the fair funding review – which is currently being modelled by the Ministry for Housing, Communities and Local Government – is expected in the Spring, leaving local government in limbo over its future funding.
This is expected to be the first of a ‘trilogy of Budget events’ this year, with the Spending Review and an Autumn Budget still to come, so the Chancellor will have ample opportunity for further announcements throughout the year when the financial impact of the global health crisis is clearer.
Other measures expected include:
- Extra cash to tackle rough sleeping
- More money to tackle domestic abuse
- Possible end to the freeze on fuel duty
- £500m for potholes