BUDGET TO ?PRIORITISE ECONOMIC SECURITY?

Next week's Budget will ?prioritise economic security? according to a Downing Street source (The Guardian, p8), with the chancellor Rishi Sunak refocusing his plans due to the impact of coronavirus. The paper reports that some potential reforms could be dropped in favour of targeted measures to reduce the impact on businesses and public services.

The government has today published the details of its ?battle plan? to tackle the outbreak (Daily Telegraph, £), while Bloomberg reports that finance ministers and central bank governors from the G7 will hold a conference call this afternoon to discuss their response.

Yesterday the World Bank and the International Monetary Fund (IMF) said in a joint statement that they have set aside ?emergency funding? to help countries respond to the virus, while the Organisation for Economic Co-operation and Development (OECD) said a ?longer lasting and more intensive coronavirus outbreak? could cut global growth in half (Financial Times, p1, £). Meanwhile the Daily Telegraph (p5, £) reports on advice from the World Health Organization that customers should wash their hands after touching bank notes.

BRITAIN URGES BRUSSELS TO HONOUR DEADLINE FOR GRANTING FINANCIAL MARKET ACCESS

As Britain and the EU began negotiations on their future relationship yesterday, the chancellor Rishi Sunak said in a letter to the EU's financial services chief Valdis Dombrovskis that both parties should complete the June deadline for granting market access rights for the country's financial firms (Financial Times, £, p3). In the letter, the chancellor states that he could 'see no reason? why both sides could not conclude the equivalence assessments on time, however Brussels has stressed that the deadline does not mean an actual decision on access would also be taken by this date (Reuters).

Meanwhile, the Department for International Trade (DIT) said in its ?negotiating objectives? document, published yesterday, that a trade deal with the US could boost the UK economy by £15.3 billion over the next 15 years, a 0.16 per cent increase (Financial Times, £, p4). Britain's financial services industry could see a small reduction in value under a US trade deal, while energy, automotive and other sectors could see ?large growth? in value, according to the DIT (Reuters). The document highlights how the UK wants ?best-in-class? rules on financial services market access, and the UK and US will decide this month whether to hold parallel talks on financial services, alongside free trade agreement talks, according to a British official (Bloomberg, £).

NEWS IN BRIEF

According to Bank of England figures, mortgage lending hit its highest level for nearly four years as confidence returns to the housing market following the general election (The Times, p43, £).

Britain has suggested it could back down over a tax on tech giants to help secure a free trade deal with the US (The Telegraph, B5, print only).

Hundreds of final salary pension schemes could face closure due to a change in the rules around how quickly businesses must put in funds, which could cost them up to £5 billion (Daily Telegraph, B8; Daily Mail p71).

Trading platforms reported record volumes of trades on stock and futures exchanges in February as investors responded to the coronavirus outbreak (Financial Times, £).

WHAT THE COMMENTATORS SAY

Philip Aldrick, Economics Editor of The Times (£, p37), writes that good intentions behind entrepreneurs? relief do not make ?Britain's worst tax break? worthwhile. Mr Aldrick explains that the tax relief was raised by George Osborne from £1 million to £10 million after he visited California and saw its entrepreneurial ecosystem. Mr Aldrick says, however, Britain is not California. A study in 2017 by HM Revenue & Customs found that 84 per cent of those who claimed the tax relief were unaware of it at the time of their investment and only eight per cent said it factored in their decision, with the Office of Tax Simplification saying 'there is no evidence that entrepreneurs? relief encourages further investment in new business ventures?.

Mr Aldrick says that  backing investment in entrepreneurs is vital, but there is less need to provide a ?poorly targeted tax break? than ever. He highlights that existing enterprise investment scheme and venture capital trust structures provide £950 million of tax relief a year, so scrapping entrepreneurs? relief does not make the government anti-enterprise.

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