Government spending

The last few days have seen free school meals in England rocket to the front of the papers, as many MPs, campaign groups and businesses have lined up behind Marcus Rashford’s proposals to extend free school meal vouchers through the school holidays until Easter next year. While the motion was defeated last week, the Labour party has promised to bring the motion again – and several Conservative MPs have already indicated that it may receive a more sympathetic hearing the second time around.

'The present crisis might yet turn out to be that kind of more permanent shock as, in all probability, will Brexit. As we saw after the 1980s, permanent shocks can leave lasting scars.'

The IFS Green Budget 2020, in association with Citi and with funding from the Nuffield Foundation, analyses the huge economic trauma since the March Budget and the much heightened uncertainty over the path of the economy in coming years. The findings from chapters covering the economic and fiscal outlook were presented at this event.

As for phase four, the return to normality, Mr Sunak needs to learn one big lesson from policy in the wake of the financial crisis. From 2010 on that policy was dominated by the desire to reduce the deficit. But it lacked a crucial second leg: an actual economic strategy focused on productivity, growth and economic success. Phase four must not just be about getting the huge deficit down. It must involve a smart economic strategy for infrastructure investment, education, economic governance, tax reform and more besides.

A lack of transparency over where spending is expected to be lower is contributing to confusion about the overall scale of fiscal support being provid

European Structural and Investment (ESI) funds help to pay for initiatives supporting business development, research and development, investment in digital and green infrastructure, as well skills and training interventions and support for job-seekers. But with the UK having formally departed the European Union, the country will stop receiving new ESI funding at the end of 2020. Thus, for 2021 and beyond, the UK government faces choices over what to replace ESI funding with.

In this special joint webinar, the Institute for Fiscal Studies (IFS) and the National Institute of Economic and Social Research (NIESR) examined the impact of the Covid-19 crisis on the public finances.

The Coronavirus Job Retention Scheme (CJRS) covers 80% of employees’ usual salaries, up to a cap of £2,500 a month, while they are furloughed. From August it will also provide support for employees who return from furlough but work reduced hours. This Briefing Note considers the implications of that change and how it might work.

This morning, the ONS published its monthly public finance release for April, giving us an initial snapshot of the public finances under lockdown. It throws the enormous impact of the restrictions on the public finances into sharp relief.

The coronavirus outbreak and associated containment measures have caused huge economic fallout across the world. The sharp decline in economic activity that is now occurring will depress government revenues and push up public spending. In addition, governments have, appropriately, responded with packages of fiscal measures that will help support households, businesses and public services through these challenging times and limit the long-run damage done by the crisis. But these measures will also have the direct impact of adding considerably more to government borrowing.