Chancellor Rishi Sunak in his bold budget speech suspended business rates for shops and cafes, Beer, wine and cider duties were frozen as pubs get help, UK interest rates cut in an emergency move, and promises his measures to help the economy tackle the coronavirus outbreak which is expected to bring a “significant” short-term impact.
An Emergency curt in interest rates was ordered today to help families and companies through the economic shock caused by a coronavirus.
Ahead of budget, the Bank of England chopped half a point off the base rate, reducing to just 0.25 per cent worth £75 a month to a typical first-time buyer with a £300, 000 mortgage. Bank Governor Mark Carney spoke of `’an economic shock that could prove sharp and large, but should be temporary.”
The Chancellor Rishi Sunak said: ” My first budget will set out an action plan to manage the economic impact of coronavirus and it is a plan that will ensure businesses, the public and those working on the front line against Covid-19 get the support they need.”
Rishi Sunik’s budget was well received by the Tories but not markets as FTSE 100 closed down 1.4 per cent. The first sign of co-ordinated response between Fiscal and monetary policy came before financial markets opened with a 0.5 per cent point cut in interest rates to 0.,25 per cent from the BoE – the joint lower rate in the bank’s 325-year history.
The Chancellor augmented the BoE’s Stimulus with a £12bn package designed to support the economy during the outbreak, which was yesterday declared a pandemic by the World Health Organisation.
In the US the S&P fell 4.9 per cent just short of the bear market.
This is the biggest loosening of fiscal policy since Norman Lamont’s 1992 Budget, the chancellor’s plans earned him a rebuke from the Independent Office for Budget Responsibility.
Fuel duty remains frozen for another year.
£5bn for gigabit-capable broadband into the hardest to reach places of the UK.
UK growth forecasts updated 1.4 per cent for 2020 and 1.6 per cent for 2021.
Government to abolish business rates for small shops this year.
NHS to get “whatever it needs, whatever it costs” be it “millions or billions”.
NHS England is scaling up its capacity for testing people for the infection Public Health England which has already carried out more than 25, 000 coronavirus tests across the UK is set to expand the number of people it can test a day to 10 000 currently only 1500 are being carried out.
Benefit claimants who have been advised to stay at home will not have to physically attend job centres.
The government will meet costs for businesses with fewer than 250 employees of providing statutory sick pay to those off work “ due to coronavirus”.
A temporary coronavirus business interruption loan scheme for banks to offer loans of up to £1.2m to support small and medium-sized businesses.
A $500m hardship fund to be given to local authorities in England to help vulnerable people in their areas.
Business rates for shops, cinemas, restaurants, and music venues in England with a rateable value below £51, 000 suspended for a year.
Statutory sick pay for all those who are advised to self-isolate even if they have not displayed symptoms.
This was an emergency budget with a £30bn rescue package to save businesses from going bust and people losing jobs.
A planned increase in spirits duty will be cancelled and duties for cider and wine drinkers will be frozen as well, but a packet of 20 cigarettes will cost 27p more.
The so-called tampon tax will be abolished and VAT on books, newspapers and academic journals will be scrapped from December 1st.
New plastic packaging tax on non-recyclable materials from April next year.
National Insurance threshold to rise from £8, 632 to £9, 500.
The Chancellor announced more than £600bn for road, rail, housing and broadband projects over five years. He promised an additional £640, for the Scottish government and £360m for the Welsh government, £210m for the Northern Ireland Executive and £240m for new city and growth deals.
He was also providing £200m for local communities to build flood resilience and would double investment in flood defences.
Hundreds and thousands of top earners are set to benefit from an unexpected £2bn tax giveaway, thanks to a move by the chancellor to relieve pressure on the National Health Service.
The chancellor hoisted to £200, 000 from £110, 000 the sum people can earn before they are hit by a reduction in how much they can save tax-free into the pension. The big adjustment to the pension “taper” expected to cost £2.2bn over the next five years, was prompted by a crisis in the NHS, where thousands of senior doctors were turning down extra shifts to avoid unexpected tax bills for unintentionally breaching their reduced pension savings limit.
“The vast majority of doctors are now removed from the effect of the taper and will no longer be in a situation where they are paying to go to work. This solution is long overdue” said Vishal Sharma who chairs the pensions committee at the British Medical Association.