Budget 2020 - Key Measures

The Budget delivers on our promises to the British people and gets things done. It is a Budget delivered in challenging times, that delivers security today and lays the foundation of prosperity for tomorrow. The key measures are:

• Putting more money in peoples’ pockets with an over £200 tax cut for the typical family. Increasing the National Insurance threshold to £9,500 this April, benefiting 31 million people with a typical employee saving over £100 in 2020.
• Increasing the National Living Wage to boost the wages of the lowest paid. The National Living Wage will increase by 6.2 per cent to £8.72 from April.
• Axing the tampon tax now we have left the EU. Reducing the cost of essential sanitary products for women in the UK, abolishing the tampon tax from 1 January 2021. 
• Freezing fuel duty for a tenth year in a row. Saving the average car driver a cumulative £1,200.
• Freezing duty rates on beer, spirits, wine and cider. This will be only the second time in almost 20 years a government has frozen all these duties.
• Creating an entitlement to Neonatal Leave and Pay to support parents with the stress and anxiety of having a baby in neonatal care. For employees whose babies spend an extended period of time in neonatal care we will provide up to 12 weeks paid leave.
• Helping Universal Credit claimants to repay debts in a more manageable way. We will reduce the maximum rate at which deductions can be made from a UC award from 30 per cent to 25 per cent and give claimants 24 months to repay advances.
• Reducing reassessments for Personal Independence Payment to avoid unnecessary anxiety. PIP claimants whose conditions are unlikely to change will have an award period of at least 18 months, reducing assessments for over 100,000 people with disabilities per year.
• Increasing the Employment Allowance so businesses can grow and create more well-paid jobs. Helping businesses to take on extra staff by increasing the Employment Allowance to £4,000 (increasing it by a third) benefitting over 500,000 businesses and taking 65,000 businesses which will be taken out of NICs altogether.
• Encouraging more businesses to employ veterans. We will introduce a National Insurance Holiday for employers of veterans in the first year of civilian employment.
• Increasing public R&D investment to £22 billion per year by 2024-25. This investment is the largest and fastest ever expansion in support of research and innovation, taking direct support for R&D to 0.8 per cent of GDP and placing the UK ahead of the USA, Japan, France and China.
• Doubling the amount, we invest in flood and coastal defence to £5.2 billion over six years. Flooding has had a devastating impact so we will double the current investment better protecting 336,000 homes, we will also provide £120 million to the Environment Agency to repair assets damaged by recent floods.
• Boosting recycling and reducing plastic pollution by introducing a new plastic packaging tax. From April 2022 the plastic packaging tax will incentivise the use of recycled plastic and help reduce the scourge of plastic waste. We will set the rate at £200 per tonne of plastic packaging that contains less than 30 per cent recycled plastic.
• Establishing a £800 million Carbon Capture and Storage Fund to capture emissions enabling our manufacturing heartlands to become leaders in green industry. The fund will establish CCS in at least two UK sites, one by mid-2020s and a second by 2030.
• Helping people to make the transition to cleaner, greener cars. We are consulting on bringing forward the phase-out date for the sale of new petrol and diesel cars and vans from 2040, but meeting this target will require a combination of measures, so to support our transition to zero emission vehicles (ZEVs) we will: exempt zero-emission cars from the Vehicle Excise Duty expensive car supplement and publish a call for evidence on VED, which will include how it can be used to reduce vehicle emissions; extend the 100 per cent First Year Allowance for ZEVs; and provide £533 million to extend to 2023 Plug-in Car Grants for zero emission cars and ultra-low emission vans, taxis and motorbikes.
• Providing £500 million over the next five years to support the rollout of a fast-charging network for electric vehicles – ensuring drivers will never be more than further than 30 miles from a rapid charging station. To ensure this money is spent effectively we will complete a comprehensive review into elective vehicle charging infrastructure.
• Announcing a Nature for Climate Fund which will invest £640 million in tree planting and peatland restoration. Our plans will see the rate of tree planting increase by over 600 per cent.
• Setting out an ambitious package to build quality homes this country needs. The Budget announces £9.5 billion for the Affordable Homes Programme helping to prevent homelessness and help people to get on the housing ladder and taking the total funding to £12.2 billion from 2021-22.
• Ending rough sleeping in this Parliament with £643 million of targeted support. Most recent rough sleeping stats show a 9 per cent fall on the previous year, this Budget will build on this to provide up to 6,000 beds and a substance misuse treatment services with the full capacity to help 11,000 people a year.
• Giving the green light to new strategic road schemes helping everyone get around. The Budget confirms the development of 15 local road upgrades across the country helping to reduce congestion. We are investing over £27 billion to 2025 on the Second Road Investment Strategy. To decarbonise the transport sector, we expect 97 per cent of cars and vans to be zero emission by 2050.  
• Delivering £2.5 billion to fill millions of potholes over the next five years – speeding up journeys, reducing vehicle damage and making our roads safer. We have set up a new Potholes Fund, which will provide £500 million a year (a 50 per cent increase) fund to fix 10 million potholes a year.
• Delivering next generation broadband to the most difficult to reach areas of the UK with a record £5 billion of funding. This funding will support gigabit-capable broadband which is 40 times faster than standard superfast broadband benefitting 5 million premises and the hardest to reach parts of the country.
• Improving phone reception in rural places with a £1 billion investment in the Shared Rural Network. We will ensure rural areas are not left behind and will provide £510 million of funding – which will be more than matched by industry so 95 per cent of the UK will have high quality 4G mobile coverage.
• Delivering on our promises with £5.4 billion more for the NHS and health service– writing the cheque for 50,000 more nurses and 50 million more GP surgery appointments per year. We will enshrine into law cash boost of £33.9 billion by 2024. But this Budget goes further by investing £5.4 billon in this Parliament to support the recruitment, retraining and retaining of 50,000 more nurses including a new nursing maintenance grant for all nursing students.
• Providing nearly £700 million of new funding in 2020-21 to improve hospitals across England. Alongside our plan to build at least 40 new hospitals – the largest hospital building program in a generation – we will increase DHSC’s capital budget to allow more vital improvements to hospitals.
• Committing to a new £3 billion National Skills Fund to ensure people gain the skills they need for rewarding well-paid jobs. We will consult with people and employers on how to target the fund in the best way.
• Increasing funding for counter-terrorism and our intelligence community to keep people safe. This includes £83 million for counter-terrorism policing and £31 million for the UK intelligence community. We will also provide an additional £67 million so our intelligence agencies can build on their world-leading technological capabilities and protect the UK’s security.
• Supporting veterans with £10 million for Armed Forces mental health charities. We will commit £10 million to Armed Forces Covenant Fund Trust to support veterans with mental health needs.

We have put forward a package of temporary, timely and targeted measures to support public services, individuals and businesses through the economic disruption caused by COVID-19:

• We will provide any extra resources needed by the NHS and other public services to tackle the virus. We have created a new £5 billion Initial COVID-19 Response fund so the NHS can treat Coronavirus patients; councils can support vulnerable people; and ensure funding is available for other public services.
• £40 million of new funding to enable further rapid research into COVID-19 and increase the capacity and capability of testing and surveillance.
• Statutory Sick Pay (SSP) will be now be available for eligible individuals diagnosed with COVID-19 who are unable to work because they are self-isolating. This is in addition to the change announced by the Prime Minister that SSP will be payable from day 1 instead of day 4 for affected individuals.
• People who are advised to self-isolate will now soon be able to obtain an alternative to the fit note to cover this by contacting NHS 111, rather than visiting a doctor. This can be used by employees where their employers require evidence. Further details will be confirmed shortly.
• Those who are not eligible for SSP, can now make a claim for Universal Credit or an enhanced Employment and Support Allowance:
• For the duration of the outbreak, the requirements of the Universal Credit Minimum Income Floor, will be temporarily relaxed for those who have COVID-19 or are self-isolating according to government advice.
• People will be able to claim Universal Credit and access advance payments upfront without the current requirement to attend a jobcentre if they are advised to self-isolate.
• Employment and Support Allowance, up to a maximum of £111.65pw, will be payable for eligible people affected by COVID-19 or self-isolating from Day 1 of sickness, rather than Day 8.
• £500m more funding so Local Authorities can support economically vulnerable people and households. We expect most of this funding to be used to provide more council tax relief, either through existing Local Council Tax Support schemes, or through complementary reliefs. MHCLG will set out more detail on this funding, including allocations, shortly.
• We will bring forward legislation to allow SMEs and employers to reclaim Statutory Sick Pay (SSP) paid for sickness absence due to COVID-19. This refund will cover up to two weeks’ SSP per eligible employee who has been ill because of COVID-19; Employers with fewer than 250 employees will be eligible; Employers will be able to reclaim expenditure for any employee who has claimed SSP as a result of COVID-19. We will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible
• We will increase the Business Rates retail discount to 100% for one year and expand it to the leisure and hospitality sectors, and the introduction of a £5,000 rates discount for pubs. Taken together with existing Small Business Rates Relief an estimated 900,000 properties, or 45% of all properties in England, will receive 100% business rates relief in 2020/21. Guidance for local authorities on the application of the expanded retail discount will be published by MHCLG on 20 March.
• We will provide an additional £2.2 billion in funding for Local Authorities to support small businesses that pay little or no Business Rates because of Small Business Rate Relief.
• A new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch on 1 April to support businesses to access bank lending and overdrafts.