March 11, 2020

Everything you need to know about the 2020 Budget

Six things you need to know

Our budget delivers for the British people, levelling up our economy and delivering on our manifesto pledges. Here’s the top 6 things you need to know about the 2020 budget:

  1. It makes sure the NHS has all the resources it needs, with 50,000 more nurses and 40 new hospitals.
  2. It keeps the cost of living low with an over £200 tax cut for the typical family.
  3. It increases the National Living Wage to boost the wages of the lowest paid. 
  4. It keeps people safe by increasing funding for counter-terrorism and our intelligence community.
  5. It delivers £500 million every year to fill potholes, speeding up journeys, reducing vehicle damage and making our roads safer.
  6. And it pledges £9.5 billion to build affordable homes, helping people onto the housing ladder.

This Budget helps hard working families

We promised to let hard working families keep more of what they earn.

So this budget puts more money in peoples’ pockets with an over £200 tax cut for the typical family. We will increase the National Insurance threshold to £9,500 this April, benefiting 31 million people with a typical employee saving over £100 in 2020 – the first step to reaching our ambition to increase the threshold to £12,500

And we're increasing the National Living Wage to boost the wages of the lowest paid. The National Living Wage will increase by 6.2% to £8.72 from April. The Budget commits to a new ambitious target for the National Living Wage to end low pay and extend this to workers aged 21 and over by 2024. 

We're axing the tampon tax now we have left the EU. We will reduce the cost of essential sanitary products for women in the UK, abolishing the tampon tax from 1 January 2021.  

We are also freezing fuel duty for a tenth year in a row to help with the cost of living. We will freeze fuel duty for the tenth year in a row saving the average car driver a cumulative £1,200 compared to Labour’s plan. And we're freezing duty rates on beer, spirits, wine and cider helping with the cost of living. This will be only the second time in almost 20 years a government has frozen all these duties. 

This Government will also create 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.

Protecting access to cash and supporting alternatives to high-cost credit. We will bring forward legislation to protect access to cash and to allow credit unions to offer a wider range of services and products.

Protecting our Environment

We promised to deliver green growth and protect our environment. Flooding has had a devastating impact on people across the United Kingdom. So we will double the current investment in flood and coastal defences to £5.2 billion over six years. That means we will be better protecting 336,000 homes across the country. We will also provide £120 million to the Environment Agency to repair assets damaged by recent floods. 

We'll boost recycling and reduce 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% recycled plastic. 

And we will find £500 million over the next five years to support the rollout of a fast-charging network for electric vehicles. That's to ensure 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. To decarbonise the transport sector, we expect 97% of cars and vans to be zero emission by 2050.  

Investing for Better Public Services

We promised to invest in better public services - and this budget gets it done.

We are investing £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. And not only that, we will enshrine into law cash boost of £33.9 billion by 2024. But this Budget goes further by investing £5.4 billion in this Parliament to support the recruitment, retraining and retaining of 50,000 more nurses. And we're doing that by introducing a new nursing maintenance grant for all nursing students. 

We'll provide 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 the Department for Health and Social Care's capital budget to allow even more vital improvements to hospitals. That will mean better care for those who need it and further supporting our NHS.

Keeping People Safe

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.

Investing in our Infrastructure

We promised to level up the British economy, with investments in new roads, railways and broadband. So that our country world class infrastructure, and can lead the world in the industries and technologies of the future.

To do that, we're investing record amounts to build the railways and roads of the future – triple the average over the last 40 years. A total of £640 billion of capital investment will be invested in roads, railways, communications, schools, hospitals and power networks.

And we're 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. And we are investing over £27 billion to 2025 on the Second Road Investment Strategy.

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. 

Deliver even more housebuilding

We promised to deliver the housing people need. Building on our housing policy last year, we've set out an ambitious package to build quality homes that 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. This will be the largest cash investment in affordable housing in a decade. We will also publish a White Paper on planning in line with our aim to support at least a million more homes.

Creating a new £1 billion fund to remove unsafe cladding so residents feel safe and secure. Having taken expert advice, we will provide this additional funding to remove non-Aluminium Composite Material cladding from residential buildings above 18 meters to ensure people feel safe in their homes.

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. This will help the most vulnerable people across England, a key step towards ending rough sleeping. We will fund our rough sleeping policies through the non-UK resident Stamp Duty Land Tax.

What this budget means for you

If you need to know one thing about today’s Budget, it’s that it delivers on our promises to the British people and gets things done.

We’ve made a clear commitment to level up our whole United Kingdom, with opportunity for all.

Region Labour's Pension Tax (£) Extra Months to Work
England 11,167 44
East Midlands 6,150 50
Greater London 12,871 45
North East 9,758 38
North West 6,835 47
South East 14,270 40
South West 7,407 45
West Midlands 10,729 41
Northern Ireland 13,718 35
Scotland 10,653 41
Wales 11,691 36
United Kingdom 11,253 43

Commenting, Therese Coffey, Secretary of State for the Department of Work and Pensions, said:

“Corbyn’s Pension Tax will see ten million savers facing a huge bill forcing them to delay their retirement for almost three and a half years.
“This is just one of the ways a Corbyn government would hammer hardworking people on top of his plans to hike up taxes by £2,400 a year, as well as the cost of his plan for unlimited immigration and the chaos of 2020 being dominated by two more referendums – one on Brexit and another on Scottish independence.
“Only Boris Johnson and the Conservative Party can get Brexit done with a deal, get parliament working again and turbocharge our economy to unleash Britain’s potential.”

Read more about how this Pension Tax will impact millions of savers (PDF)