Budget 2021: Rishi Sunak to set out plans for recovery

Reuters

Chancellor Rishi Sunak is preparing to deliver his first Budget since the pandemic was declared, amid fears of widespread unemployment and huge government borrowing.

He delivers his statement, including updates on public finances and the economic outlook, from about 12:30 GMT.

The government has already said furlough, paying up to 80% of people's wages, will continue until September.

And there are reports Mr Sunak is planning to raise some taxes.

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 suffering because of the downturn will become eligible for government help, as access to grants is widened.

• Furlough to be extended until September in Budget
• Five things to look out for in the Budget
• What we know so far about the Budget

In his speech to the House of Commons, Mr Sunak will promise to do "whatever it takes" to support business and jobs and begin the work of "building the future economy".

He has already promised extra money for vaccine distribution, £5bn to help High Street firms reopen and a mortgage guarantee scheme for first-time buyers.

Other support is expected to include:

• £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

Mr Sunak 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 doses having been given 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."

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.

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March 03, 2021 at 10:33PM

https://www.bbc.co.uk/news/uk-politics-56264885