Rishi Sunak Budget declares war on pandemic
Was this a historic budget? The UK government, yesterday, announced ambitious economic plans. Billions and billions will be spent across the country to fight Covid-19 and fund the future.
Few expected such a free-spending Budget. Personal finance expert Martin Lewis described the announcement as a series of gerbils coming out of a magician’s hat.
Here are some of the key measures:
Controlling the coronavirus. At least £12 billion will be spent to combat the spread of Covid-19, providing a short term vaccination for the economy. Of this, £5bn will go to the NHS, with more available if necessary.
Taxing big companies. Corporation tax rates, which previous Tory governments had said would keep falling, will stay at 19%. Additionally, the government will be enforcing an extra 2% tax on the UK revenues of major digital players like Facebook and Google – despite US opposition.
Environmental concerns. Sunak proclaimed, “This government intends to be the first in history to leave our natural environment in a better state than we found it.” Carbon capture clusters and electric-car charging schemes will both receive generous funding.
Infrastructure bonanza. The chancellor announced that over £600 billion will be spent on roads, railways, communications, schools, and power networks all over the UK. This includes millions of potholes being filled in, and 40 new hospitals being built.
Investing in ideas: The chancellor said that he would be scrapping the “reading tax”, making it easier for ebook and newspaper publishers to operate. He also declared that investment in research and development would increase to a huge £22 billion a year.
So, was this really historic?
Loosening the purse strings
Yes. This represented the end of a decade of austerity and the most ambitious spending plans in a generation.
Not quite. By returning to the sort of spending advocated by the Labour Party, Sunak could be seen as acknowledging that the Tories had lost the economic argument.
- Which Budget announcement are you most excited about and why?
- Imagine you are the government. In groups of four, decide how you would split £100 million on the country. How much would you spend on education? Or on the military, for example?
Some People Say...
“Don’t tell me what you value, show me your Budget, and I’ll tell you what you value.”Joe Biden, current leader in the race to take on Donald Trump for the US presidency
What do you think?
Q & A
- What do we know?
- The Office for Budget Responsibility said that yesterday’s announcement represented the biggest government giveaway since 1992. Rishi Sunak had been in the job for less than a month. Traditionally, the chancellor is allowed to drink alcohol during the Budget Speech. The word “budget” comes from an old French word ‘bougette’, meaning a little bag to carry money.
- What do we not know?
- We do not know how much impact the coronavirus will have on the economy in the long-term. We do not know whether the amount of borrowing needed to fund many of the new spending plans will be financially wise. Also, we don’t know why – in such a short space of time – the Tories appear to have changed their entire economic policy.
- A small rodent, formerly known as a desert rat.
- Corporation tax
- A tax on the profits made by companies. The UK’s rate is lower than many similar Western nations.
- Carbon capture
- Technology that removes carbon from the atmosphere and stores it, helping the fight against global warming.
- A set of attitudes and policies advocated by former Conservative PM David Cameron and his chancellor, George Osborne, to cut back on public spending following the 2008 financial crash.