ACCA's Budget 2020 comment

ACCA statement following the March 2020:

Economy:

Michael Taylor, ACCA’s chief economist, said:

‘It is welcome that the chancellor and the governor of the Bank of England have been working closely to mitigate coronavirus risks on the economy. The decision today to cut interest rates has not been taken lightly.

‘Welcome fiscal measures to support households and businesses during the coronavirus is a bold move that compliments the actions of the Bank of England. A pledge of up to £30 billion is very much welcome and represents 1.4% of GDP.

‘The overall framing of the budget is a significant increase in public spending, we are all Keynesians now.’

 

Infrastructure:

Alex Metcalfe, ACCA’s head of public sector policy, said:

‘Rishi Sunak’s pledge of a £175 billion investment over the course of this parliament is to be welcomed but comes at a time where the UK is faced with a long shopping list. The chancellor must decide what this government’s priority is. Levelling up prosperity across the nation featured heavily in this year’s budget, including a commitment to providing 95% of the UK with 4G coverage.

‘It is reassuring Mr Sunak is reviewing the fiscal framework, with a view to taking a balance sheet approach. However, we must consider that the impact of the coronavirus spend has not been incorporated into the fiscal headroom projections.

‘ACCA urges the government to now show long-term vision by aligning these new spending commitments to the National Infrastructure Assessment, produced by the National Infrastructure Commission nearly two years ago.’

Tax:

Jason Piper, ACCA’s head of tax and business law, said:

‘Today’s announcement of the abolition of rates liabilities for hospitality, leisure and retail premises will be a welcome measure for struggling high streets up and down the country. While undoubtedly positive news for thousands of small businesses, this measure joins a complex existing network of reliefs and exemptions that create additional complexity in the system and make it hard for small businesses to predict what they will owe from one Chancellor to the next.’

We cannot forget the climate crisis, in these challenging times ACCA maintains the need to transition away from taxes on labour, to a system that taxes natural resource consumption and pollution. While we’ve seen an encouraging start on climate change policy, more needs to be done. And on tax, what was missing was a similar vision for the comprehensive overhaul of the tax and social security models for workers in a fast-changing world of shifting employment patterns.’

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