A financial professional has already pulled apart the 2020 budget. But don’t worry. You don’t need to read a complex essay on just what Rishi Sunak‘s plans mean. Because this tax expert has done it all via Twitter.
Richard Murphy is a chartered account and commentator. In 2017, he came out in support of Jeremy Corbyn. His views on tax and finance are quite forward thinking. So with the chancellor delivering the budget on Wednesday 11 March, Murphy is one of the go-to people to debunk it. And pull it apart he did, showing that the reality of what the Tories are promising isn’t pretty.
Budget pledge one: small businesses
As the Guardian reported, Sunak announced a:
£1bn of lending via a government-backed loan scheme, with government backing 80% of losses on bank lending.
Sounds big, right? Not according to Murphy:
New loan scheme will offer £1 billion to small businesses – which to put it in context is £200 per small business in the UK if they all applied. That’s not going to work then #Budget2020
— Richard Murphy (@RichardJMurphy) March 11, 2020
Also, the chancellor will:
abolish business rates altogether for this year for retailers, in a tax cut worth more than £1bn.
There’s that huge £1bn figure, but again:
I think the plan to waive business rates is useful – but the number of businesses involved means that the £1 bn involved does not go far when the total business rate bill is over £30 billion a year. Everything announced so far seems to be on the mean end of small #Budget2020
— Richard Murphy (@RichardJMurphy) March 11, 2020
And:
£3,000 business grants might last a week for most businesses that get it #budget2020
— Richard Murphy (@RichardJMurphy) March 11, 2020
There are 5 million small businesses in the UK – and £7 billion of support. That really does not add up in a £2 trillion economy. This is far too little to provide business with the confidence it needs. #Budget2020
— Richard Murphy (@RichardJMurphy) March 11, 2020
Budget pledge two: tax and government finances
Apparently, Sunak and the Office for Budget Responsibility (OBR) say that government debt is going to fall as a percentage of the UK’s Gross Domestic Product (GDP) by 2024/25. But Murphy thinks this is very unlikely:
Apparently a worldwide recession and coronavirus will not impact the governemnt’s debt – which is going to fall as a proportion of GDP according to the OBR. There is no way on earth that this is going to be true #Budget2020 I am expecting massive deficits
— Richard Murphy (@RichardJMurphy) March 11, 2020
Also, Sunak has raised the National Insurance threshold (the level at which people start paying it). But as Murphy pointed out, that will only save £104 a year for most people.
Budget pledge three: the environment
The chancellor announced a series of measures to do with the climate crisis, air pollution, and ecological breakdown. But were any of them worth the (hopefully recycled) paper Sunak wrote them on?
As Murphy noted:
Only 40 minutes to get to the climate crisis – showing just how unimportant this is to the government. #budget2020
— Richard Murphy (@RichardJMurphy) March 11, 2020
Green measures are a shift of tax from electricity to gas and some measures on plastic. And that is literally it. Nothing else at all. What are [they] thinking about? This is staggeringly inept when #COP26 is coming. …
Oh, a little more green – but so little that just £1 billion is invested in green transport solutions – and most is plugs for Teslas that most people will never afford
And as Murphy neatly summed up regarding the chancellor’s pledge to build 4,000 miles of new roads:
I despair – £27 billion of tarmac – all to encourage even more use of carbon fuels – which is the last thing we need when public transport should be the focus now #budget2020 Surest sign that this government is living in the deep past. …
All the resources needed to create the Green New Deal have just gone into road building in the UK. This is really bad news for the future of our country and planet
Meanwhile…
Murphy was also scathing about the increase in the charge for people from overseas using the NHS. And also:
Staggeringly, the 1% cut in the interest cost for new social housing reverses a decision made by the Tory government last year – that’s not new money. That’s an admission of a past cock-up #Budget2020
— Richard Murphy (@RichardJMurphy) March 11, 2020
Overall, he was unimpressed to say the least with Sunak’s budget, stressing:
The more and more I am hearing from this Chancellor the more I realise he is living on a planet that isn’t the one the rest of us are going to suffer on as climate change really hits us
And Murphy summed it up best as he called the budget a “pantomime”. We’ll know more about just what the Tories’ announcement means in reality over the coming days. Because numbers will be crunched, policies costed, and probably cuts to public services exposed. But for now, Murphy’s assessment of the main points of Sunak’s budget paints a pretty dire picture.
Featured image via Guardian News – YouTube
