Emergency coronavirus budget statement pencilled in for early July

Chancellor Rishi Sunak is preparing to unveil an emergency budget statement next month to tackle the threat of millions of job losses due to the coronavirus crisis.

The statement has been scheduled for week beginning 6th July, which will see the Government focus on retraining and reskilling furloughed workers at risk of being made redundant in the weeks and months ahead.

Mr Sunak recently provided a stark warning to MPs that as many as two million jobs could be lost if restaurants, bars and public houses remain closed for much longer due to the COVID-19 lockdown restrictions.

As with most budget statements, July’s statement will not be a full budget incorporating tax changes but will instead provide an outline plan for the UK’s economy recovery. This pre-budget report, previously scrapped by former Chancellor Philip Hammond, will have three core sections.

First and foremost, the plan will outline new and innovative ways of retraining workers made redundant once the Coronavirus Job Retention Scheme draws to a close in October.

Secondly, it will double-down on plans for significant infrastructure spending. Lastly, it will also provide a vote of confidence in the UK’s tech sector with fresh investment.

The statement is likely to be made just a few days after a speech from Prime Minister Boris Johnson, that is reportedly scheduled for the end of this month. Mr Johnson’s speech will no doubt assess the state of play once non-essential high street stores have been opened to the public from 15th June.

Paul Johnson, director, Institute for Fiscal Studies (IFS) has already called on the Chancellor to consider taxation changes for the short and long-term health of the UK economy.

Mr Johnson believes scrapping stamp duty land tax – which he dubbed a “terrible tax” – would breathe new life into the UK housing marketplace.

“If there is ever a point at which you want to be encouraging people to be moving and spending, this is probably it,” added Johnson.

Johnson also pointed to the reformation of taxes like council tax, given that he feels this is now “a moment when some of these more difficult [decisions] are possible”.

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Date published 1 Jun 2020