Budget: Sunak vows to do 'whatever it takes' to protect the economy
The Chancellor has announced a range of new financial measures to help support businesses recover from the COVID-19 pandemic, but revealed a major increase in corporation tax would be introduced to pay for it.
Rishi Sunak has set out his three-point plan for helping the economy recover from the impact of the pandemic, vowing to use the full "fiscal power" to "protect the jobs and livelihoods of the British people".
Delivering his update in the Commons, Sunak said the pandemic had "fundamentally altered" the way of life in the UK as he vowed to do "whatever it takes" to protect the UK economy.
"This Budget meets the moment with a three-part plan to protect the jobs and livelihoods of the British people," he said.
"First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis.
"Second, once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that. And, third, in today’s Budget we begin the work of building our future economy."
It comes almost a year after the first lockdown was announced which prompted one of the biggest programmes of economic intervention ever in British history.
Almost 11 million people have had their wages paid by the state as a result of the furlough scheme, while firms have received billions in grants, loans and other financial support.
The impact of those measures have resulted in soaring borrowing – more than £270bn this financial year - pushing the national debt to a record £2.1 trillion.
One of the biggest announcements from the fiscal set piece was Sunak's announcement that the furlough scheme would be extended until September in an effort to protect jobs as lockdown is lifted.
But the Chancellor said the level of support would be tapered from July, with employers expected to pay more towards the cost of salaries. From July, firms will be required to pay 10% of a furloughed employee's wages, increasing to 20% in August and September once the lockdown restrictions are lifted.
Self-employed workers will also get additional support from a fourth grant offered under the Self-Employment Income Support Scheme (SEISS) which will provide them with 80% of three months trading profits up to a maximum of £7,500.
It is expected more people will be able to take advantage of the scheme after it was announced that tax return data would be accepted by the scheme.
But Sunak also pushed ahead with plans to increase corporation tax, paid on company profits, to 25% from 2023, saying it was "fair and necessary to ask them to contribute to our recovery" after receiving a £100bn of support during the pandemic.
The Treasury said an additional £1.2bn in funding would come to Scotland as a result of the Budget.
The money includes a £27m investment in the Aberdeen Energy Transition Zone to help support the UK's climate change ambitions.
Scottish Secretary Alister Jack said: “Today’s Budget demonstrates the UK Government delivering for people in Scotland. We are living through challenging times and the extension of the UK Government's support schemes - including furlough, self-employed and business support, the Universal Credit uplift, and the hospitality VAT cut - will continue to support jobs and businesses in Scotland. We are giving vital certainty through the months ahead.
"Today’s Budget sets out an additional £1.2 billion for the Scottish Government, and in addition the UK Government will ramp up direct investment in Scotland, working closely with local authorities."
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