Budget challenge for new Chancellor6th March 2020
Sometimes it’s possible to be right about something, but for the wrong reason; and so it was with our ‘Budget box on the shelf’ post (6 November). This floated the possibility that Sajid Javid would not get a second chance to present his first Budget to the House of Commons.
We speculated that ‘he could go on the very short list of post-1800 Chancellors that never delivered a single Budget speech‘, which turned out to be the case after he resigned last month. However, with the election result unclear, it was the possibility of a Conservative defeat, rather than his resignation that we had in mind.
Coughs, sneezes and banknotes
Similarly, our ‘Will the £50 polymer be the last hurrah for cash?’ post (14 January) summarised with this thought: ‘The pace of change in recent years took many people by surprise and the projected future trends in payment methods could be similarly overtaken by events‘.
We were thinking more of revolutionary tech, but the advance of the coronavirus has brought many consequences, not least of which is a heightened awareness that coins and banknotes can transmit infections, making contactless a safer option. That last hurrah just got somewhat closer.
Meanwhile, Sajid Javid’s replacement, his deputy Rishi Sunak promoted from Chief Secretary to the Treasury, has a Budget to present next Wednesday, 11 March. It would be an unenviable task for the most experienced Chancellor in history; the delayed Budget will be, shall we say, very interesting.
The collapse of the Flybe airline this week is a symptom of the coronavirus threat facing many sectors of the economy, including those involved in travel, hospitality, retailing and professional sport. Many businesses will need support of some sort, as will their employees.
Axing the three waiting days to qualify for Statutory Sick Pay is one step designed to keep the virus out of the workplace as effectively as possible. Other measures may be announced ahead of the Budget, but Rishi Sunak may have to consider wider action to prevent the economy from stalling.
Leading economic forecasters including OECD have predicted a significant impact on UK and global economic performance in the coming months and beyond. In the US, the Federal Reserve this week announced an emergency interest rate cut after share prices fell sharply on successive days.
With UK coronavirus cases poised to accelerate, the Budget and its mere financial content may seem like a sideshow, but fiscal decisions this year could have a far bigger impact on people’s lives than usual. Throw Brexit into the mix and the scale of the Chancellor’s task looks truly daunting.