Last year was a challenging one for us all. The Oxford English Dictionary’s words of the year have been ‘lockdown’, ‘circuit-breaker’, ‘support bubble’, ‘super-spreader’ and ‘furlough’. I’m sure we’re looking forward to the time when such terms slip out of everyday use.
Whilst the incredible achievement of the development of a vaccine gives us hope for 2021, the far-reaching effects of the COVID-19 pandemic will inevitably be felt for some years to come.
The government has spent £400 billion and counting trying to protect jobs and shore up an economy battered by lockdowns and uncertainty. Somewhere along the line, Rishi Sunak will need to adjust taxes to rebalance public finances – an objective he has publicly acknowledged. The pandemic has also brought into sharper relief the interconnectedness of our economy and the heroes of the last twelve months have been our nurses, shopworkers, delivery drivers and all the other people who have been part of the mammoth effort to keep people safe and supplied with what they need to survive the lockdowns.
For every bad news story, there’s been an example of a business giving the food it can’t use because it can’t open to a food bank, more potential volunteers than the NHS could absorb, and more neighbourly behaviour than in our busy pre pandemic life. The impact of the pandemic on those without an economic safety net and the dramatic increase in the use of foodbanks and other social support networks has raised a question in the minds of many about the redistributive power of our current tax system.
That puts an intense spotlight on the Spring Budget on 3rd March. With the second wave of the pandemic surging, there were no such moves in the last Spending Review. However there are initial signs that the progress being made with the vaccination programme could allow Rishi to start signalling where tax changes will come.