Below is a quick summary of today’s Budget presented by George Osborne written by our Public Affairs team. If you’d like to find out more about the team or enquire into how we can help you click here.
Earlier today, George Osborne delivered his third “pro-enterprise, pro-infrastructure, pro-devolution” Budget in 12 months, against a backdrop of lower growth figures, higher borrowing than previously expected and a fragile global economy.
With only three months to go before the UK votes on its continued membership of the EU, the Chancellor needed to avoid making this a Budget solely about Brexit while also making the case for a vote to remain. The surprise sugar levy was designed to lead tomorrow’s coverage and distract from the headline figures.
The Chancellor also used the opportunity to play a long political game, and attempted to add the label of ‘social crusader’ to his economic credibility. He aimed to place the needs of the future generation at the heart of his budget with plans for a new sugar levy and a strategy to turn all state schools into academies to demonstrate the government is pressing ahead with reforms despite the disruption of June’s EU referendum.
Having failed to eliminate the deficit during his first term in power and significantly reduce government borrowing, Osborne was careful to maintain an austere demeanour and to show that he still has a grip on the economy. As he rattled through the deficit figures, he made sure to remind us of the “dangerous cocktail of risks” and the need to “act now so we don’t pay later”.
To the dismay of many backbenchers on his side of the House, the Chancellor also used his speech as a platform to pitch the pros of staying in the EU on the back of the OBR’s prediction that a vote to leave could usher in an extended period of uncertainty.
Overall, this budget represents a big boost to small businesses through measures that will see the small business rate relief more than doubled to at least partially help offset the cost of the living wage and apprenticeship levy introduced last year. Despite the gloomy economic numbers, the Chancellor was able to stick to his commitment to have a surplus of £10.4 billion in 2019-20 and throw in the mix several juicy announcements that will help detract attention from the poor fiscal figures.
FHF Public Affairs Team
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January 21, 2021