The Chancellor‘s March Budget will be the “start” of sprawling austerity measures across the nation, Express.co.uk was told. Mr Sunak’s announcement is tipped to be one of the most closely watched in a generation. It comes as the country grapples with the economic fallout as a result of the coronavirus pandemic.
The Government has been largely praised for its efforts to keep millions of workers and business – as well as national infrastructure like the railways – afloat as UK-wide lockdowns meant an inability to trade.
This, on top of efforts to tackle the virus, has translated to billions of pounds in spending.
In 2020, Prime Minister Boris Johnson parted with £280billion on measures to fight COVID-19 and its impact on the economy.
Much controversy has since surrounded the awarding of contracts.
This was especially true after Health Secretary Matt Hancock was found to have acted unlawfully by not publishing all of the Government’s contracts within 30 days of them being awarded.
This year’s budget takes place on Wednesday, March 3, with Mr Sunak preparing to outline the state of the economy and the Government’s plans for raising or lowering taxes.
Mr Johnson’s road-map out of England’s current lockdown has offered businesses a view to reopening, but made no specific mention of a financial policy.
The Chancellor is expected to use the Budget to extend the current support measures.
“I think even on its own terms it’s the worst possible response to an economic crisis.
“We’ve seen in the past that if you cut and slash at a time when everyone else is doing it, individual households and businesses, all you do is prolong the problem, you choke off recovery and you send the economy further into a downwards spiral.”
He added: “The Tories, purely from an electoral point of view, probably need to think hard about another round of austerity, and what that’s going to do in terms of their support in the Red Wall seats they’ve captured.
“People there will turn against them quite quickly if they impose that austerity.”
Little has been given in terms of hints for what Mr Sunak might announce.
Earlier this week, City AM reported that the Chancellor will raise corporation tax in a bid to generate an extra £12bn in revenue.
It is believed the tax will hike from 19 percent to 23 percent.
The Sunday Times reported the increase will be staggered so it reaches 23p in the dollar by the next general election in 2024.
It could raise around £3bn this year, and a further £12bn over the next three years.
Pressure is also on Mr Sunak to extend the stamp duty holiday.
In July 2020, he announced a temporary stamp duty holiday that cut the rate to zero percent for all properties worth £500,000 or under until March 31, 2021.