One year ago, we promised the British people we would do whatever it takes to provide security and stability. We are delivering on that promise: over this year and next, we are providing £407 billion of support for families, jobs and businesses, more than almost any other country in the world. • Despite this unprecedented support, the damage coronavirus has done to our economy has been acute. Since March, 700,000 people have lost their jobs, the economy has shrunk by 10 per cent – the largest fall on record – and our borrowing is at the highest it has ever been outside of wartime. •
Today’s Budget protects the jobs and livelihoods of the British people with a three-part plan:
(1) Supporting people and businesses through this moment of crisis.
(2) Beginning to fix the public finances with a fair and honest plan about how to do so.
(3) Building our future economy
SUPPORTING PEOPLE AND BUSINESSES THROUGH THIS CRISIS
We are extending our support – well beyond the end of the roadmap
Furlough extended until the end of September.
The furlough scheme has supported 11.2 million jobs across the UK, worth £53 billion. But to provide further certainty, we are today extending the scheme until the end of September. Employees will continue to receive 80 per cent of wages for hours not worked, but as businesses reopen, we will ask them to contribute 10 per cent of wages in July, and 20 per cent in August and September. Furlough remains among the most generous schemes of its kind anywhere in the world.
Two further grants for the self-employed.
We will introduce a fourth grant covering the period February to April, worth 80 per cent of people’s average monthly revenues. From May, a fifth grant will be available which is more targeted towards those most affected by the pandemic: people whose turnover has fallen by more than 30 per cent will receive the 80 per cent grant, while those whose turnover has fallen by less than 30 per cent will receive a 30 per cent grant. And we will ensure that the more than 600,000 people, including many who became self-employed last year, and filed their 19/20 tax return by 2 March, will now be eligible for both grants.
Restart grants to help our businesses get going again.
Non-essential retail businesses will open first and therefore receive grants of up to £6,000, while hospitality and leisure businesses – including personal care, hairdressers and gyms – will likely open later or with more restrictions and so receive grants of up to £18,000. These will be worth an extra £5 billion – taking our total cash grant support to £25 billion. We are also providing local councils with £425 million discretionary funding to support other local businesses.
Business rates holiday.
Last year we provided an unprecedented 100 per cent business rates holiday for all eligible businesses in the retail, hospitality and leisure sectors – a tax cut worth £10 billion. This year, we will continue that 100 per cent holiday for the first three months until June, before cutting rates by two-thirds for the remaining nine months, up to a maximum £2 million per business. Over 350,000 properties will pay nothing for three months, with the vast majority of businesses will receiving a 75 per cent cut in their bill next year – a tax cut worth £6 billion.
VAT cut extension.
To protect the 150,000 hospitality and tourism businesses which employ around 2.4 million jobs and have been hardest hit, we are extending the 5 per cent reduced rate of VAT for a further six months until the end of September. The rate will then increase to 12.5 per cent from October until the end of March, before returning to the normal 20 per cent rate from April 1. Overall, that’s a tax cut of nearly £5 billion next year.
Extension to the stamp duty cut.
To avoid purchases not completing in time for the end of March, we are today announcing the £500,000 nil rate band will end on 30 June, before tapering down to £250,000 until the end of September (60 per cent of buyers will pay no stamp duty), before returning to its normal level of £125,000 from 1 October.
A new mortgage guarantee scheme for homebuyers.
Even with the stamp duty cut, there is still a significant barrier for people to get on the housing ladder: the cost of a deposit, given that 95 per cent loan-to-value loans have gone from the market. That is why, from April, lenders who commit to providing loan-to-value ratios of between 91 to 95 per cent can get a government guarantee on the full value of those mortgages.
New Recovery Loans to replace our existing loan schemes.
Our schemes have provided £70 billion of support to 1.5 million companies. But as these come to an end, we are introducing new Recovery Loans to take their place: loans from £25,000 up to £10 million, with an 80 per cent government guarantee.
Support for the lowest paid and most vulnerable.
The temporary £20 uplift to Universal Credit will continue for a further six months. Due to the way the system works operationally, we need to give Working Tax Credits claimants their equivalent of 6 months of support through a one-off payment of £500. We’re also increasing the National Living Wage to £8.91 from April, and extending it to people over 23 – worth almost a £350 pay rise.
Better skills for people to get better jobs.
We have already launched the Restart scheme to help hundreds of thousands of long term unemployed; doubled the number of Work Coaches; introduced the Lifetime Skills Guarantee to fund Level 3 Qualifications for all adults; and launched the Kickstart scheme to help 250,000 young people into work. Today we go further by doubling the incentive payment to small businesses to take on apprentices of any age to £3,000, alongside £126 million to triple the number of traineeships next year.
Support for culture and sport.
We are providing £700 million to support local and national arts, culture and sports institutions as they reopen. We’re also piloting a new apprenticeship scheme for creative industries, and extending our successful £500 million Film and TV Production Insurance Restart Scheme
For more information visit https://www.gov.uk/government/news/budget-2021-what-you-need-to-know