Budget

If there was any doubt still remaining that Rishi Sunak’s first Budget will be dominated by the coronavirus, the Chancellor’s Sunday media round ought to have put that to bed. With three days to go until the government’s first big fiscal event since winning an 80-seat majority, Sunak has been touring the broadcast studios of Sky and the BBC to trail the contents of his red box. Speaking to Andrew Marr, Sunak was clear that the priority of the Budget would be making sure that both members of the public and businesses receive the support they need to respond to the virus in the coming weeks and months: I can

When Sajid Javid resigned in a row with No. 10, there was much speculation about what would be in the coming Budget. No one, though, predicted that it would end up being overshadowed by coronavirus. The short-term economic effects of this outbreak are almost unknowable. It is still hard to work out how serious it is going to be. One of those drawing up the government response plan tells me they would be happy if, in a year’s time, people thought they had wildly overreacted. Boris Johnson once said that the mayor in Jaws — who keeps the beaches open despite reports of a shark — was his hero for

The coronavirus is putting politics on hold. The Budget, as I say in this week’s magazine, will be a much less dramatic event because of it. Given the level of economic uncertainty the virus is creating, it would be sensible to wait for the autumn Budget — when the situation should be clearer — before making big, fiscal policy decisions. The Budget, as a consequence of this, will largely be about ‘delivering’ on the Tories’ manifesto commitments. In Downing Street they know that trust is a huge issue for both the government and Boris Johnson personally, so they want to show that they are keeping their promises. Given that the

UK and Scottish government modelling shows that the economic and fiscal costs of a Covid-19 epidemic could be on a par with the costs of the 2008 banking crisis. According to a senior government source: ‘that is what our modelling shows’. If millions were unable to work and significant numbers of businesses unable to trade – as usual during an epidemic – there would be a huge automatic rise in Universal Credit and other welfare payments to those quarantined. Further costs would be incurred from whatever schemes are put in place to shelter otherwise viable businesses from collapse, coupled with any emergency top ups to health and social care spending.

Could motorists be hit with the first fuel duty rise in ten years in this month’s Budget? According to the Sun, the PM’s chief advisor Dominic Cummings wants to use petrol and diesel as a revenue-raiser to fund big infrastructure projects outside the capital. But ending the fuel duty freeze after a decade might not be a good idea, particularly when many new Tory voters in the North are likely to be the worst affected. Fuel duty is an easy way to raise revenue in theory, as the demand for fuel is always high. It is also a tax that is difficult for motorists to avoid (though this doesn’t stop some from trying). Yet

Tory activists are in uproar this morning over varying reports of tax raising measures Boris Johnson and Sajid Javid are considering for next month’s Budget. Plans currently being mooted include cuts to pension tax relief and the introduction of a recurring property tax that could replace stamp duty. Critics have been quick to say that neither proposal fits with what the Tory party traditionally claims to want to do – rather than new taxes and limits Johnson ought to be pushing for tax cuts. However, the view in both No. 10 and No. 11 is that this is the year for tough – and potentially unpopular – decisions. Given the