Chancellor Rishi Sunak is to announce further plans to get the UK economy back on track this week, as job cuts linked to coronavirus increase.
He is expected to deliver an economic update on 8 July, a “mini-Budget” in which he will set out “the next stage in our plan to secure the recovery”, following Boris Johnson announcing last week he intends to fast-track infrastructure investment to help the economy recover from lockdown.
However, this week’s mini-Budget isn’t an official 'fiscal event', like a spring or autumn statement where sweeping changes to tax and spending measures could be made.
That won’t come until the annual Autumn Budget later in 2020.
Here's everything you need to know:
What is the Autumn Budget?
The Autumn Budget is one of two financial statements usually delivered by the Chancellor of the Exchequer.
It is used to set out the Government’s spending plans, and includes things like tax reforms and changes that can affect everything from the cost of beer to Universal Credit payments.
When will the Autumn Budget 2020 be?
As noted, the mini-Budget isn't an official fiscal event; that won’t come until the annual Autumn Budget later in 2020.
The exact date of that announcement has not yet been confirmed by the Chancellor, though it is expected to fall around October time.
What was announced during the last Budget?
The last ‘proper’ fiscal event was the Spring Budget delivered by Sunak in March amid rising fears of the coronavirus crisis that had not yet fully reached UK shores.
A lot was introduced to prepare the country for the encroaching virus, including a £5bn emergency response fund to support the NHS and other public services, statutory sick pay for all those advised to self-isolate, and an extra £6bn in extra NHS funding over five years to pay for staff recruitment and hospital upgrades.
In terms of taxes, the threshold for National Insurance Contributions was raised from £8,632 to £9,500, while the 5% VAT on women's sanitary products – known as the “tampon tax” – was scrapped.
It was also announced that VAT was to be abolished on digital publications including newspapers, e-books and academic journals from December, and from April 2022, a plastic packaging tax will come into force.
More than £600bn is also set to be spent on roads, rail, broadband and housing by the middle of 2025, Sunak announced.
Why is it no longer called the Autumn Statement?
The Autumn Statement was ended in 2016 by then Chancellor of the Exchequer Philip Hammond at the recommendation of the Institute for Fiscal Studies.
When is this week’s mini-Budget expected?
Mr Sunak will deliver the mini-Budgeton Wednesday 8 July from Downing Street.
The specific time has not yet been announced.
What will be announced?
Though sweeping changes to tax and spending measures are not expected to be made, the Government this week announced Mr Sunak would be unveiling a £3 billion investment to help create thousands of green jobs modernising public buildings and housing to make them more energy efficient.
It’s also expected that hundreds of thousands of households will get grants of up to £5,000 to make their homes more environmentally friendly, with vouchers of up to £10,000 available to some of the poorest families.
A £30bn “high street voucher” scheme is also being touted, with vouchers worth £500 per adult and £250 per child handed out to be spent in hard-hit sectors of the economy, such as face-to-face retail, hospitality and leisure.
It’s expected to be announced that most house buyers will be exempt from paying stamp duty for six months, as the Government attempts to restart the housing market.
Traineeships could also become more common in the wake of massive coronavirus-triggered redundancies, with the mini-Budget expected to contain news on a £100 million government investment; businesses offering new traineeships in England could receive a £1,000 bonus per trainee.
Universal Credit should also be boosted by £10bn to support low-income families, according to a report by The Resolution Foundation think-tank.
James Smith, research director of Resolution Foundation, said: “The measures the Chancellor announces in his mini-Budget tomorrow need to be big enough to reflect the size of the crisis we face, targeted at the sectors that need the most support, and flexible enough to cope with the uncertainties that lie ahead.
“With interest rates already at record lows, the Chancellor will need to take the lead in delivering an ambitious policy response to secure Britain’s economic recovery,” he added.