Rishi Sunak’s recovery budget is based on stealthy tax rises
Rishi Sunak has had an exciting first year in the role of chancellor of the exchequer. He spent most of 2020 figuring out ways to keep the UK economy afloat while various levels of lockdown came and went. On Wednesday, we got some insight into how he plans to shore up both the recovery and the public finances. So what were the biggest moves?
The government has spent a lot of money in the past year to offset the impact of Covid-19 lockdowns. That’s set to continue until at least the end of September. Sunak announced the extension of the furlough and self-employment relief schemes, VAT cuts, stamp-duty holidays (see below), business-rates relief, universal credit top-ups and various other measures, all of which added another £65bn to spending for the 2021-2022 tax year. That leaves us with overall borrowing for 2021-2022 at an estimated £234bn, according to the Office for Budget Responsibility (OBR), the independent fiscal watchdog – a far cry from the £164bn forecast in November.
The good news is that the economy is expected to rebound strongly this year and next,
