RISHI Sunak will support struggling Brits with the “full measure of our fiscal firepower” at tomorrow’s Budget – but warn the time is approaching to “begin fixing the public finances.”
The Chancellor will vow to use every tool in his box “to protect the jobs and livelihoods of the British people” – including months more furlough and extra Universal Credit.
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But with the nation’s coffers reeling from the Covid crisis, Mr Sunak is staring at £400 billion blackhole on the eve of his second Budget.
Tomorrow lunchtime the chief bean counter will set out “a three-point plan to protect jobs” – but also give the nation a reality check over the dire economic situation left in the wake of the pandemic.
The Treasury said on Tuesday that the Budget will be focussed on “support, honesty and building future economy.”
Despite the mammoth deficit, the top Tory will promise to do “whatever it takes” to support the British people and business through this “moment of crisis” – including extending furlough and the Universal Credit £20 uplift for months more.
Along with business support for struggling pubs and high streets, the Budget will likely see another £30 billion added to Britain’s virus fighting tab.
But Mr Sunak, who has only been in the job for a year, will also use his second Budget to begin to put the country on the long road back to balanced books.
He will tell MPs: “once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that.”
It is expected that will see a hike in corporation tax on businesses and capital gains taxes on millionaire second property owners and investors.
Last week The Sun revealed that Mr Sunak had been warned Britain’s blackhole needs reducing by around £30-40billion now to stabilise borrowing and prevent debt from rising as a percentage of national income.
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The Institute for Fiscal Studies has said: “Even if the Government was comfortable with stabilising debt at 100 per cent of national income — its highest level since 1960 — it would still need a fiscal tightening worth 2.1 per cent of national income, or £43billion.”
However it is hoped the success of the vaccine rollout will mean a swifter recovery, wit that figure reduced to some 29 billion.
A full economic forecast will be published alongside the spending and taxing blueprint outlined by the Chancellor tomorrow lunchtime.