Thread by @lewis_goodall

Chancellor: "It's going to take the country and the whole world a long time to recover from this situation...once we're on the way to recovery we will need to begin fixing the public finances and I want to be honest today about our plans to do that."

Early nod to the deficit.

As I reported last night there really is no need in the short or medium term for the Chancellor to be concerned about borrowing. How political rather than economic his approach is going to be will depend very much what he means by "once we're on the way to recovery"

Sunak says OBR forecasts that UK economy will return to its previous size six months earlier than forecast

But OBR says that in five years time British economy will be 3% smaller than it would have been

That is presumably on top of the forecast growth lost as a result of Brexit

OBR very bullish about growth in years ahead

Says UK economy will grow by 4% this year

7.3% in 2022

1.7% in 2023

1.6% in 2024

1.7% in 2025

So that's somewhat below trend in years after 2022, which again raises doubt about wisdom of deficit (and demand) reduction measures

OBR now forecasting unemployment to peak at around 6.5%- much lower than previous forecast of around 11%, good news but still very high by modern standards.

Thalidomide funding to be extended in perpetuity.

Legacy of the legendary Harry Evans lives on...

-UC £20 uplift extended for another 6 months.

-One off £500 payment for WTC recipients

-Confirmation of national living wage of £8.91

For first two, question will be what is the benefit of one off measures when even without the pandemic, so many are in structural poverty.

-5% rate of VAT will be extended for hospitality until late September

then 12.5% for another six months

no return to full VAT rates til April

Sunak confirms that stamp duty holiday will be extended to 30th June

Nil rate band will be £250k until September (rather than £500k)

No resumption of normal stamp duty rates until October

So more injection of demand into a housing market which some worry is already overheated. Critics will say measures to boost supply is what is needed far more.

Sunak says that as a result of action he's taking today the budget deficit falls below 5% of GDP quickly.

Though previous OBR forecasts did show that economy bounce back would do a lot of that work for him.

"It's going to be the work of many governments of many decades to pay it [our pandemic borrowing] back."

NB that isn't really how it works- as Robert Chote has said. The way it'll stop being a problem is because we'll grow and inflate our way out of it.

Sunak cites worry of interest rate rise and threat to public finances.

Well yes, perhaps. Though most of our debt has an maturity long into the future. And the Bank of England is financing virtually all our borrowing. So not clear this is a huge problem right now.

Sunak confirms govt won't raise VAT, Income Tax or NI rates

But does say he's freezing increasing personal allowance increases from next year until 2026

Higher rate threshold will be increased next year and then be frozen until 2026 as well.

So lots of fiscal drag.

From 2023 coproration tax will rise to 25%- Sunak says will still be lowest rate in G7.

Higher hike than was expected.

All alcohol duties frozen for second year in a row.

Petrol duty increase also cancelled (again)

New UK infrastructure bank (based in Leeds)

I feel I cover something akin to this in every budget...

So Corporation Tax increases and green infrastructure bank.

2019 Labour manifesto calling again...

Big, big incentive scheme for firms to invest over the next two years. Firms can offset 130% of investment costs against tax. That's huge.

Pension fund klaxon

Sunak confirms three new enterprise zones in Scotland and Wales

Chancellor confirms my story from this morning that the new Treasury site will be based in Darlington

https://twitter.com/lewis_goodall/status/1367062929120624642?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1367062929120624642%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fwww.theguardian.com%2Fpolitics%2Flive%2F2021%2Fmar%2F03%2Fbudget-2021-rishi-sunak-fiscal-firepower-protect-jobs-covid-furlough%3Fpage%3Dwith3Ablock-603f72468f08d196fd22cd8c

Chancellor announces new Freeport sites (a long standing interest of Sunak's)

East Midlands airport
Felixtowe
Liverpool
Humber
Plymouth
Solent
Thames
Teeside

Local and mayoral elections clearly not far from the Chancellor's mind.

Starmer says it's good to be sat opposite the man actually making decisions in this govt.

"After the decisions of the last year and a decade of neglect, we needed a budget which rebuilt the foundations of our economy...instead we got a budget which papered over the cracks."

Starmer: "The Chancellor may think that it's time for a victory lap, but this is a budget which won't feel so good for key workers whose pay is frozen...although the Chancellor froze for almost an hour we heard nothing about a long term plan to fix social care."

Starmer: "This is the Chancellor who blocked a circuit break...a few weeks later forced into an even longer and painful lockdown...nothing compared to a decade of political choices which meant that Britain went into this crisis with an economy built on insecurity and inequality."

Starmer clearly trying to embed idea that the last decade led to the terrible economic and health outcomes of the pandemic, a la his recent speech. Problem, as I said then, is whether it's too late for that narrative to take hold.

Starmer: "A Labour budget would have had the NHS and social care front and centre."

Starmer: "The proper basis of making tax policy is the economic cycle, not the electoral cycle"