He’s been widely lauded for shepherding the UK economy through turbulent waters in recent times, but Rishi Sunak could face his toughest test today when he sets out the Government’s vision for a post-Coronavirus world.
The furlough scheme, grants, subsidies and loans continue to be churned out in an effort from the Government to put their “arms around the economy” and, although it has not always been seamless, the Chancellor appears to be one of the shining lights in the Cabinet.
Superlatives come thick and fast when 25% of the UK workforce are on the payroll of the state, however, Sunak is likely to face an entirely different beast when he is staring down the barrel of a £300bn deficit. In that sense, today could be judgement day for the Conservative Party and Rishi Sunak’s carefully curated reputation.
In what is being dubbed a “Mini-Budget”, the Chancellor is unlikely to make sweeping changes to fiscal policy measures but rather set out a host of initiatives and proposals in an effort to assist the UK economy in bouncing back from the Coronavirus downturn.
Below, we have outlined what may be included in today’s statement.
Stamp Duty
In a huge boost for prospective homeowners, the Chancellor is set to announce a 6-month moratorium on the tax on homes up to £500,000. When initially briefed to the media earlier in the week, it was suggested that the measure would come into force later in the year, however, following concerns that it may stall the housing market for further months, it is expected to be introduced from today.
Although unlikely to impact the London housing market, the move will play well in the new “blue wall” area across the North of England and among Tory backbenchers who will welcome a return to Thatcherite economics in the Treasury.
A Green Revolution
If the prospect of a Green Industrial Revolution fills you with a sense of déjà vu, then you may remember the brainchild of Rebecca Long-Bailey which formed the majority of the Labour Party’s 2019 Election Manifesto.
Now, it is expected that the Chancellor will unveil a £3bn green package to create jobs, update buildings and assist the UK in meeting it’s 2050 net zero target. As part of the package, a Green Homes Scheme could see households receive £5,000 to spend on insulation and low-energy lighting, whilst a retrofit scheme could see £1bn spend on upgrading public buildings including schools, prisons, and hospitals.
High Street Vouchers
A widely covered report by the Resolution Foundation urged the Chancellor earlier this week to introduce a cash injection to help save the UK’s suffering high streets.
As part of a £30bn package, the think tank called on the Treasury to issue £500 vouchers to every UK adult in a bid to get consumers back spending with the sectors most afflicted by the coronavirus,
It has been reported that the Chancellor is considering the measure and we will wait and see whether he decides to take the plunge, or hang on until the Autumn to introduce more sweeping measures to save the high street, such as temporary VAT cuts.
Training and Careers Support
From “Take Back Control” to “Get Brexit Done”, the VoteLeave faction of Downing Street has been known to stick to the rule of three. Of late, the slogan “Jobs, Jobs, Jobs” has taken hold and it is expected that today’s announcement will focus on just that.
Despite the unprecedented financial measures, the Government has introduced over the last few months, many people have faced redundancy and unemployment. One of the ways in which Mr Sunak may seek to tackle this crisis is through investing £111 million in apprenticeships and traineeships.
Firms are set to receive £1,000 for each new work experience place they offer to alleviate concern that a generation of students may struggle to find careers post-education.
Whatever the package of measures the Chancellor unveils today, it is unlikely to define his tenure in the Treasury. Like George Osborne, the test for Sunak will be how he handles the aftermath and the intricate balance between cutting public services and raising taxes.
