Yesterday, the Chancellor set out in his Spring Budget the next phase of the Government’s plan to putting our country back on the road to recovery and building back better from this pandemic.
The support that the Government has provided throughout this pandemic has been unprecedented. With a return to greater normality in reach, we must not let all the efforts that have been made over the past year go to waste and so we will continue to support the economy, so that the UK can bounce back this year.
As the IMF, Bank of England, and OBR have all confirmed: our plan to protect jobs has been working. Unemployment is expected to peak at far lower levels than previously thought, and our economy is expected to recover to pre-covid by the middle of next year which is 6 months earlier than previously thought.
The budget continues to protect the jobs and livelihoods with a three-part plan:
- Doing whatever it takes to continue to support people and businesses through this crisis.
- Begin to fix the public finances with a fair and honest plan.
- Building our future economy.
Supporting people & businesses through this crisis
The Government has recognised the need to continue providing support for families and businesses through the remainder of this tough time and is extending support well beyond the end of the roadmap by:
- Extending the Furlough Scheme until the end of September.
- Two further grants for the self-employed lasting until the end of September – newly self employed workers will now be able to receive this support.
- Restart grants of up to £18,000 for businesses, to get our retail, hospitality, leisure, and personal care businesses going again.
- Business rates holiday extended.
- VAT cut for hospitality businesses extended.
- Extending Universal Credit uplift for a further 6 months.
- New Recovery Loans for businesses, backed by the Government by 80%.
- £700 million to support the arts, culture, and sports sector.
- Increased funding for apprenticeships, work coaches, and the Kickstart Scheme.
- A new 95% mortgage guarantee to allow lower mortgage deposits for those looking to get on the housing ladder.
- An extra £19 million on top of the current budget for domestic abuse support and an extra £10 million to support our veterans.
Fixing the public finances
The Government has not seen this level of public spending since the Second World War and it will take the work of multiple future Governments to pay this back, but we must do this in a fair and sustainable way. We must continue to support jobs and small businesses but also encourage investment. As we look ahead this will be done by initially:
- Asking the largest and most profitable firms to pay more from 2023 by increasing corporation tax to 25% - remaining the lowest in the G7, and the smallest and struggling businesses will not see their corporation tax rise.
- However, we will also introduce the unprecedented ‘Super Deduction’ – When companies who have built up cash reserves invest this, they can reduce their tax bill by up to 130%. This should encourage firms to spend their cash reserves soon to help boost the economic recovery and increase UK investment by 10% taking us from 30th in the OECD for business investment to 1st.
- Maintaining personal tax allowances at their current levels from 2023 until 2026.
- Maintaining VAT, Inheritance, capital gains, and pensions lifetime allowances at their current threshold levels.
- Freezing alcohol & fuel duty.
Building our Future Economy
We will set out the foundations for a future economy which will be built upon over the coming years. We will ramp up our green infrastructure, boost trade, and address the UK’s productivity problems:
- The Government is announcing eight new freeports, one of which will be the Thames Gateway – These are special economic zones special economic zones to making business, trade, customs, and tariffs all cheaper and easier as well as boosting industries around the Thames Estuary.
- A number of support schemes to help small and mediums sizes to improve their productivity via the Help to Grow scheme – Gov.uk/Helptogrow
- Launching the First ever UK infrastructure Bank to help investing in new & green infrastructure.
- Green initiatives including a new retail bond, offshore wind funding, and new carbon markets.
- New funding for the UK to become a scientific superpower – supporting Research and Development, continuing to support vaccine rollout and future preparedness.
- Visa reforms to attract highly skilled migrants to the UK, including those working in scientific fields and entrepreneurs.
This is an ambitious and honest budget that continues to support families and businesses through the remainder of this very difficult period, but also seeks to level up the UK through innovation and investment as we go forward.
It provides people in Rochester and Strood with a degree of certainty in what has been an uncertain time and sets out the map for what will still be a tough recovery for many people, but also a significantly brighter future.
You can find even further information at https://www.gov.uk/government/topical-events/budget-2021