Budget 2021: Sunak's £407bn summer shell out
- Credit: PA
The most pivotal peacetime Budget in British history has been revealed, with chancellor Rishi Sunak confirming another emptying of the coffers in a bid to prop up the country's pandemic-ravaged economy.
And Mr Sunak once again promised he would do "whatever it takes to protect jobs and livelihoods" as the country continues to grapple with Covid.
Summer in Norfolk and Waveney is set for a bumper season after Mr Sunak announced the extension of the business rates holiday and VAT cuts.
He said: “For the remaining nine months of the year, business rates will still be discounted by two-thirds, up to a value of £2 million for closed businesses, with a lower cap for those who have been able to stay open.
“A £6 billion tax cut for business.”
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He added the 5pc reduced rate of VAT will be extended for six months to September 30, telling MPs: “Even then, we won’t go straight back to the 20pc rate.
“We’ll have an interim rate of 12.5pc for another six months; not returning to the standard rate until April next year. In total, we’re cutting VAT next year by almost £5 billion.”
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And his fiscal firepower - worth £407billion so far in total - did not stop there, as he announced a “new restart grant” will be provided in April to help businesses reopen.
He added: “Non-essential retail businesses will open first, so they’ll receive grants of up to £6,000 per premises.
“Hospitality and leisure businesses, including personal care and gyms, will open later, or be more impacted by restrictions when they do, so we’ll give them grants of up to £18,000.
“That’s £5 billion of new grants, on top of the £20 billion we’ve already provided.”
House buyers have also been handed a pay out with the extension of the stamp duty holiday.
Already Mr Sunak has announced a handful of stimulants to keep the jobs market in better health.
The chancellor has already confirmed that the furlough scheme - a virtually unheard of phrase just a year ago and now a safety net for millions of people - will confirm until September.
The furlough scheme will be extended until the end of September, and employees will continue to receive 80pc of their salary for hours not worked.
He told MPs: “As businesses reopen, we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July, when we will ask for a small contribution of just 10pc and 20pc in August and September.”
Mr Sunak said the support for self-employed workers will also continue until September, with the fourth grant providing three months of support at 80pc of average trading profits. He noted for the fifth grant, people will continue to receive grants worth three months of average profits – with the system open for claims from late July.
Changes will also be made to support the lowest paid in society, with Mr Sunak confirming the £20 weekly increase for Universal Credit will continue for a further six months.
He also said the minimum wage will increase to £8.91 an hour from April.
On apprenticeships, Mr Sunak said: “I’m doubling the incentive payments we give businesses to £3,000 – that’s for all new hires, of any age.”
However within the Budget he also shared the sobering news that the economy has shrunk by 10pc, the largest fall in more than 300 years.
He said “profound damage” had been done to the economy and the forecasts make clear that “repairing the long-term damage will take time”.
He said he wanted to be "honest" about how the Tory party would paying the £355bn of borrowing back adding that it would take many governments, many years to balance the books.
He said that the first step to doing so will be freezing the personal tax thresholds.
The Chancellor went on: “We will of course deliver our promise to increase it again next year to £12,570, but we will then keep it at this more generous level until April 2026.
“The higher rate threshold will similarly be increased next year, to £50,270, and will then also remain at that level for the same period.”
He also aimed recuperations at bigger businesses by increasing the rate of corporation tax to 25pc in 2023.
Sir Kier Starmer, leader of the opposition, was scathing of the Budget which he claimed “paperd over cracks” in the economy.
He said: “This Budget fell far short of the transformative change we needed to turbocharge our recovery for the decades to come.
“There was no credible plan to ease the burden of debt hanging over so many businesses. This is estimated at £70 billion.”
Clive Lewis, MP for Norwich South, added:”T his budget misses a huge opportunity to make a real and lasting impact on the climate crisis. What we needed was a massive green economic stimulus of the scale of the USA's. We didn't get it.
“And the decision to freeze fuel duty shows just how paper-thin the government's commitment to sustainability really is.”
But policy makers in Norfolk have received the news with a warmer reception.
C-J Green, chairwoman of the New Anglia Local Enterprise Partnership, said: “We’re pleased that the Chancellor has extended business support measures until the end of September. As firms look to reopen, readjust and refocus, it will provide them with a level of certainty to know that the furlough scheme remains in place and that additional grants for non-essential retail, hospitality and leisure businesses will come into force in April.
“Looking to recovery, we were pleased to see a focus on creating and safeguarding jobs for the future, including doubling the employer incentive for employing apprentices. The new Help To Grow management and digital schemes will offer mentoring, peer-to-peer learning and training opportunities for SMEs to ensure they can innovate, become more productive and grasp the opportunities which are open to them.”