The Chancellor, Rishi Sunak, delivered the first Budget in more than 18 months earlier this week.
Today we examine some of the key aspects of the UK’s first Budget as a non-EC/EU state for nearly 50 years, as well as look at some of the quirkier laws and traditions that surround it.
- Office for Budget Responsibility
The Budget, as well as revealing the Chancellor’s plans for the forthcoming tax year, also included an economic forecast by the Office for Budget Responsibility (OBR). The OBR was officially formed in May 2010 and given its statutory footing in the Budget responsibility and National Audit Act 2011. The main duties of the OBR are to provide forecasts of the economy and public finances, to evaluate the Government’s performance against its fiscal targets, to scrutinise the Government’s policy costings and to assess the long-term sustainability of the public finances. The OBR this week predicted growth of 1.1% for 2020 (down from 1.4% which was forecast in Spring 2019), with growth figures of 1.8% for 2021 (up from previous forecast of 1.6%), 1.5% for 2022 (down from 1.6%), 1.3% for 2023 (down from 1.6%) and 1.4% for 2024.
- Welfare
Sunak announced that there would be £1bn of additional welfare funding which includes a local authority hardship fund of £500m. He also announced that anybody self-isolating as a result of the covid-19 outbreak will be entitled to statutory sick-pay and that contributory employment and support allowance will be available to claim from day one of sickness, rather than day eight. The minimum income floor for universal credit will also be removed, as will the requirement to attend a job centre.
- Business Support
Up to two million small businesses with fewer than 250 employees will be able to claim £2bn of sick-pay rebates. The Chancellor also announced that a government-backed loan scheme would make £1bn available to businesses whilst business rates will be abolished altogether for retailers. There is also a £2bn cash injection for the 700,000 or so businesses that are eligible for small business rates relief in the form of a £3,000 cash grant for each.
- Drinking at the Despatch Box
Although it is normally banned for Ministers, traditionally the Chancellor may drink alcohol at the despatch box whilst delivering the Budget. This is not so much a ‘law’ as it is a ‘custom’ and nobody seems quite sure how it came about but it dates back to at least the mid-19th century when Benjamin Disraeli would drink brandy and water and William Gladstone would drink sherry and beaten egg. More recently, Geoffrey Howe would enjoy a gin and tonic whilst Ken Clarke favoured whisky.
- The Red Box
The traditional red box used by the Chancellor first appeared in 1860, when it was introduced by William Gladstone. In fact, the same box was used for 105 years before being replaced by James Callaghan in 1965 and again by Gordon Brown in 1997. However, George Osborne reintroduced the original box for his first Budget in 2010. As well as drinking sherry and beaten egg at the despatch box and introducing the famous red suitcase, Gladstone also holds the record for delivering the longest continuous budget speech, which was 4 hours and 45 minutes on 18th April 1853.
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