The Moorlander’s Budget 2020 Round-Up

Central Park Plymouth © Copyright Lewis Clarke

Delivering his first Budget, just three weeks into the job, would have been a nerve-wrecking and difficult task at the best of times. However, in the middle of a global crisis, Chancellor Rishi Sunak’s job was even harder.

The Conservative Party at the election last year promised masses of investment, up and down the country: in roads, broadband and infrastructure – ‘levelling-up’, as it has been described. Here is everything you need to know:

PUBLIC SERVICES
Compared to 2018-19, NHS England will receive a cash increase of £34 billion a year by 2024. In addition, the Budget commits over £6 billion of new funding over this Parliament, including to create 50 million more GP surgery appointments per year, ensure there are 50,000 more nurses, and fund wider commitments on hospital car parking and support for people with learning disabilities and autism.

Rishi Sunak

Spending Round 2019 committed to a £7.1 billion cash increase in funding for schools by 2022-23. The Budget builds on this by providing £29 million per year by 2023-24 to support primary school PE teaching and help schools make the best use of their sports facilities, as well as £90 million per year to introduce an Arts Premium from September 2021 to help schools provide high-quality arts programmes and extracurricular activities for pupils.

TRANSPORT AND INFRASTRUCTURE
The Government has committed to the ‘largest ever investment’ in English strategic roads, with over £27 billion between 2020 and 2025. Sunak said the £27.4 billion from 2020-25 would ‘pay for work on over 20 connections to ports and airports, over 100 junctions and 4,000 miles of road’. The Chancellor also announced an additional £500m a year to fill potholes. He said that this would be enough funding to fill 50 million potholes over the course of the parliament.

There is also a promise for greater investment in infrastructure to improve opportunities for cycling and walking. This includes £51 million for Plymouth, of which £35 million will go towards a new Central Park cycling and walking bridge. £4.2 billion has also been promised as part of a Local Public Transport Fund. The money will be devolved to the eight combined authority areas, allowing their elected leaders to invest in dramatically improving local train and bus services. Starting in 2022-23, the Government will provide a settlement for the West of England from this fund and build on its existing devolved Transforming Cities Fund allocation.

DIGITAL CONNECTIVITY
In Central Devon, more than 11% of people are still unable to receive decent broadband speeds. The figure is slightly higher (11.5%) in Torridge and West Devon, and around 3% in both South West Devon and Newton Abbot – which is still higher than the national average of 1.9%.

To tackle this, the Government has committed to investing £5 billion, focused on helping those in the final 20% of hardest to reach premises to ensure that ‘gigabit-capable broadband’ is able to reach every UK home by the end of 2025. In addition, Sunak today said the government would invest £510 million into a partnership with the UK’s mobile operators in a bid to eliminate so-called signal not-spots in rural areas. The £1 billion, mast-sharing deal, which was first outlined in October last year, will bring extra coverage to 280,000 premises and 16,000km of road. The industry will collectively fund up to £532 million, of the project.

The tie-up follows months of wrangling between the UK’s four mobile operators – O2, Vodafone, BT and Three – who disagreed over the terms.
The talks came close to collapsing after EE owner BT, which has the largest network of the British operators, proposed charging higher rates on some of its sites.

BUSINESSES
Chancellor Sunak said that, for the coming year, he would take the ‘exceptional step’ of abolishing business rates for small businesses with a
rateable value below £51,000.

The tax cut is estimated to be worth around £1 billion and would benefit thousands of small and independent retailers around the UK.The measure applies to firms including shops, cinemas, restaurants and hotels. Retailers eligible for small business rates relief may also be eligible for a £3,000 cash grant – which equates to a £2 billion injection for 700,000 small businesses.

COST OF LIVING
The Government formally announced a new target for the National Living Wage (NLW) to reach two-thirds of median earnings and be extended to workers aged 21 and over by 2024, provided economic conditions allow. Based on the latest Office of Budget Responsibility forecast, this means the NLW is expected to be over £10.50 in 2024. (Median income is the amount that divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount.)

The Budget also confirmed a tax cut for 31 million working people with the increase in the National Insurance contributions (NICs) thresholds for employees and the self-employed, saving the typical employee around £104 and a typical self-employed person around £78 in 2020-21. The duties on alcoholic drinks – beer, wine and cider – are all being frozen. So that means no extra tax on a pint or glass. There has been a freeze on fuel duty for a decade, and this will continue for at least another year. About 60% of the price you pay for fuel is tax – a mixture of fuel duty and VAT.

CLIMATE CHANGE
The Budget announces a Carbon Capture and Storage (CCS) Infrastructure Fund of £800million to establish CCS in at least two UK sites, one by the mid-2020s, a second by 2030. To encourage more environmentally-friendly ways of heating homes and other buildings, the government will also introduce a Green Gas Levy to help fund the use of greener fuels, increase the Climate Change Levy that businesses pay on gas, and reopen and extend the Climate Change Agreement scheme by two years.

The government will also invest in the natural environment, stating that they will plant enough trees to cover an area the size of Birmingham, restoring peatlands, and provide more funding to protect the UK’s unique plants and animals. The government will also go further to tackle the scourge of plastic waste by introducing a Plastic Packaging Tax, as well as providing further funding to encourage producers to make their packaging more recyclable.

There have been criticisms of the plans, however. Fatima Ibrahim, co-executive director of Green New Deal UK, which led the protest, said: “Ahead of COP26 we were hoping today would see a credible and comprehensive plan set out for how the British economy could reach net-zero as soon as possible. Instead, it’s been pushed back – an indication of how seriously this government is taking the climate crisis.”

Central Devon MP Mel Stride welcomed the Budget delivered by Chancellor of the Exchequer Rishi Sunak (11/03/20), describing it as particularly good news for Devon. Citing the funding being made available to upgrade the A303, the suspension of rates for many businesses, another freeze in fuel duty and raising the amount someone has to earn before paying National
Insurance Contributions, Mr Stride said there were positives for the region’s economy as a whole and for individual family finances. The Government also pledged an additional £5 billion for the NHS to deal with coronavirus.

He explained: “The major upgrades for the A303 will be a massive boost to our regional economy and taking 500,000 of the lowest paid workers out of paying National Insurance will disproportionately benefit Devon as we have some of the lowest wages in the country. In such a rural county, where many rely on their car for transport, another freeze in fuel duty will also help families with the cost of living.”

Ben Bradshaw, the Labour MP for Exeter said, in reaction to the Budget, that he will judge the Government on ‘actions not words’: “It will be vital for our region’s MPs to hold the Government’s feet to the fire on this. All too often, the language on ‘levelling up’ is couched around the North of England – particularly those areas where the Conservative Party gained seats in December’s election. But, the South West has had a raw deal for far too long and we will judge the Government on actions not words.

‘The loss of Flybe and the continued failure to plan for a fully resilient additional railway line avoiding the route along the sea at Dawlish do not fill me with confidence that this Government will deliver.”

Ben Fox

Author: Ben Fox

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