Budget 2021: Rishi Sunak to set out plans for recovery
image copyrightPA MediaChancellor Rishi Sunak will shortly set out plans to save jobs and prevent businesses collapsing as the UK emerges from the coronavirus crisis.
In his Budget statement, from about 12:30 GMT, the chancellor is set to extend furlough to September, paying up to 80% of people's wages.
He will give an update on the state of the UK's finances, amid the biggest national debt in more than 50 years.
And he will also increase the limit on contactless payments from £45 to £100.
There are reports Mr Sunak is planning to increase some taxes.
But the main focus of his Budget is likely to to be on boosting economic recovery and supporting the millions of people on furlough or potentially facing long-term unemployment.
A government source has also told the BBC the chancellor is set to extend the £20-a-week top-up to universal credit for six months to help struggling households.
Meanwhile, 600,000 more self-employed people, many of whom lost their jobs due to the pandemic downturn, will become eligible for government help, as access to grants is widened.
Before he set off for the Commons to deliver his speech, Mr Sunak told the Cabinet the coronavirus crisis had "hit our economy hard" and "we must be honest" about what that meant.
But, he added, "we can be optimistic about the recovery", Downing Street said.
He has already announced:
- Extra money for vaccine distribution
- £5bn to help High Street firms reopen
- The return of 95% mortgages backed by the government scheme to aid first-time buyers
- £408m for museums, theatres and galleries in England to help them reopen when Covid restrictions ease
- £150m to help communities take over pubs in danger of closing
- £300m summer sports recovery package, including cash for English cricket
He will also set out the government's plans for duties on alcohol, tobacco and fuel.
It has been reported that the rate of corporation tax - paid by businesses on their profits - will rise from 19% to 23%.
The Budget comes at a time when businesses are suffering, while public finances have been damaged by months of Covid restrictions and lockdowns.
Official figures show the UK economy contracted by 9.9% last year and unemployment rose to 5.1% in the three months to December - the worst rate since 2015.
With its tax takings down and its spending up, the government is expected to borrow £394bn during the current financial year - the highest figure seen in peacetime.
What happens today?
- Chancellor Rishi Sunak will set out his Budget at 12:30 GMT in the Commons
- Labour leader Sir Keir Starmer will respond straight after
- Boris Johnson will answer questions in the Commons at 12:00 for his regular PMQs session
But the chancellor will be keen to praise the rollout of vaccines - with more than 20 million people having been given doses across the UK.
He is also expected to reiterate his commitment to reopening the economy, following the "roadmap" set out last week by the prime minister, which would allow Covid restrictions on businesses and individuals to end by 21 June, at the earliest.
However, Mr Sunak will also warn of "challenging times ahead", with unemployment likely to keep rising for the next few months.
For Labour, shadow Treasury minister Bridget Phillipson said: "We need a Budget that secures Britain's recovery and rebuilds the economic foundations the Conservatives weakened before the crisis.
"That means a plan to support jobs and businesses, protect family finances and set Britain on the path to a better, more secure future."
The SNP leader in Westminster Ian Blackford said furlough must be in place "as long as businesses and devolved governments need it".
He said he was "concerned companies are going to have to step in and pay greater contributions".
This is the second Budget delivered by Mr Sunak and, as is tradition, the opposition leader, Sir Keir Starmer, will respond.
The previous Budget took place on 11 March last year - the same date as the World Health Organisation declared coronavirus to be a global pandemic.
No comments