Rishi Sunak on The Budget
TL;DR
Rishi Sunak has historically used Budgets to balance crisis support with laying foundations for long-term growth and fiscal responsibility.
Key Points
In his March 2021 Budget, he extended the Coronavirus Job Retention Scheme until September 2021 to protect jobs during the pandemic.
He announced a 'Super Deduction' in the 2021 Budget, allowing companies to deduct 130% of the cost of qualifying new plant and machinery from their taxable profits for two years.
The 2021 Budget outlined a commitment to increase corporation tax to 25% starting in 2023, though with protections for smaller businesses, while freezing personal tax thresholds until April 2026.
Summary
Rishi Sunak's approach to The Budget, particularly when serving as Chancellor, was framed around a multi-part plan to manage the immediate economic crisis while simultaneously setting the groundwork for future prosperity. Key evidence from his 2021 Budget speech highlights this dual focus: providing significant, necessary support, such as extending the furlough scheme and offering grants to businesses, while also being honest about the resulting high borrowing and the need for future fiscal repair. He presented measures to immediately help struggling households and businesses, such as VAT cuts for hospitality and new grants, alongside measures intended to stimulate long-term investment, like the 'Super Deduction' for business investment.
His position has evolved, particularly following his premiership, where he later critiqued a subsequent budget as a mere 'survival budget' lacking the ambition for decade-long vision, suggesting that budgets should avoid becoming exercises in crisis management. Historically, as Chancellor, he aimed for long-term stability by announcing measures like freezing personal tax thresholds and increasing corporation tax in a future year to demonstrate a commitment to paying down debt, even while taking bold spending action in the present. This demonstrates a position that balances necessary short-term intervention with long-term fiscal prudence, though his later commentary suggests frustration with continually being forced into a reactive, rather than proactive, budgeting cycle.
Key Quotes
“Let there be no doubt: our plan is working,”
Frequently Asked Questions
Rishi Sunak's central focus in his Budgets, especially during the pandemic as Chancellor, was delivering a plan to protect jobs and livelihoods while simultaneously laying the foundations for future economic growth. He aimed to balance immediate, necessary crisis support with fiscal responsibility.
Yes, Rishi Sunak did raise some taxes, notably announcing in his 2021 Budget that the main rate of corporation tax would increase to 25% from 2023, while also freezing personal tax thresholds. However, he insisted this was necessary after unprecedented emergency spending and that the rates of income tax, National Insurance, or VAT would not be raised.
After leaving office, Rishi Sunak critiqued a subsequent Budget delivered by his successor's government, describing it as a 'survival budget' that missed the chance to set out a long-term economic vision. This suggests he believes Budgets should be proactive statements of vision rather than reactive crisis management.