A Very ‘Keynesian’ Budget?

Keynesian economics is the theory of increasing spending and lowering taxes to stimulate demand, which subsequentially attempts to keep the UK falling into depression.

The Conservative Party is typically known for implementing a fiscal policy of reducing government spending and minimalizing government debt; however newcomer Chancellor, Rishi Sunak, has appeared to have turned Conservative fiscal values on its head during the March 2020 Budget.

Nonetheless, this isn’t just any old Budget. Covid-19, which is now described as a pandemic by the World Health Organisation, has rattled markets across the world. The virus has the potential to shut towns, cities, and, in the case of Italy, even countries down. This will undoubtably have a huge effect on businesses across the UK, including the construction and glazing industry.

The Chancellor has the colossal task of stabilising the UK economy and preparing the UK for a possible quarantine to delay the virus spreading. Jade Greenhow, Operations Director of Insight Data, comments

“Covid-19 is a monumental concern, not only for the glazing industry and construction sector but to the entire UK in all walks of life. From a business point of view, given the construction sector has huge amounts of self-employed workers and SMEs, this Budget is a warm welcome to hear.”

The Budget set out key support mechanisms to help businesses and individuals, including small firms, who are able to access “business interruption” loans, refunding sick pay payments for firms with under 250 staff who have caught the virus, and firms on small business rates to be given a £3,000 cash grant.

Jade Greenhow comments,

“Supply chains are going to be under serious stress in times to come. I just hope that the interventions put forward in the Budget are reaching the self-employed and SMEs as soon as possible. We expect work for installers and construction firms to fall in weeks / months ahead, however, there will undoubtably be an upturn on work once the virus starts clearing. That’s where large suppliers will have to be ready to meet the demand of the consumers in fabricating and producing the building products required”

Prior to the Budget, the Bank of England cut interest rates again from 0.75% down to 0.25%, which is the lowest in history. This is a clear attempt to free up money, making banks more capable of lending to support firms.

For more information contact Insight Data on 01934 808293 or via email at hello@insightdata.co.uk.