Despite having delivered countless announcements throughout 2020, due to the changing environment caused by the Coronavirus pandemic, today’s Budget marked only the second time that Rishi Sunak has brought the famous red box to Parliament. Set against the context of over £280bn of Government support and the largest deficit in peacetime history, the threat of tax increases loomed large.
After all the hype and trailed initiatives the wraps finally came off the UK Budget which the Chancellor used to re-confirm a ‘whatever it takes’ approach to support the economy through the coronavirus pandemic. This Budget aimed to steer between three core themes – protecting jobs and livelihoods, strengthening the public finances and building an investment-led recovery. There was no masking that the pandemic has wreaked havoc on the economy and while growth is forecast to return strongly this year and next, the OBR forecast now expect the economy to be 3% smaller in five years’ time than it would have been without the pandemic disruptions.
With the focus firmly shifting to how the economy emerges from the pandemic, a suite of measures were announced that seek to address the Chancellor’s desires to reduce government borrowing and to address long standing challenges that have dogged the UK’s competitiveness. It was encouraging to see that the ‘productivity puzzle’ hasn’t been forgotten and initiatives around capital investment and training announced to tackle the post Covid-19 scenario.
Key highlights include: