Spring Budget 2020
By Dr Emma Black
The Chancellor of the Exchequer, Rishi Sunak, delivered his Budget to Parliament on Wednesday 3rd March 2021, with a focus on meeting the needs of the hour as the country seeks to rebuild and recover from the economic damage inflicted during the coronavirus pandemic.
The Budget presented sets out a £65 billion three-point plan that intends to:
- Provide billions of support to businesses and families through the pandemic;
- Support an investment-led recovery as the UK emerges from lockdown; and
- Implement future changes to strengthen public finances.
Understandably, Sunak set the immediate priorities around support for those hardest hit during the lockdown periods, including extensions to furlough support, support for those self-employed and further provision of business grants, loans and VAT cuts – which together bring the total fiscal support during the pandemic to over £407 billion to date.
In his announcement, Sunak outlined plans to drive jobs, growth and investment to help the economic recovery. The Coronavirus Job Retention Scheme has been extended to September 2021 and the Self-Employment Income Support Scheme will continue with a fourth and fifth grant. The business rates holiday in England was extended for a further three months and the government extended the temporarily reduced 5% VAT rate until September 2021 for those businesses impacted in the tourism and hospitality sectors. Grant funding was announced for businesses in England through a £5 billion Restart Grant scheme focussed on helping the high street. A new Recovery Loan Scheme was also announced.
To continue the fantastic work already completed on the vaccination effort, the Budget injected an extra £1.65 billion to continue momentum in the rollout in England, with a further £50m announced to boost the UK’s vaccine testing capability too. At the end of March 2021, over 31 million people have received at least one dose while over 4 million have now been fully vaccinated.
As we look forward to the road ahead, Sunak has announced a range of measures and packages to support investment and opportunity across the UK to help businesses grow while improving access to skills, capital and ideas. New English freeports were announced including East Midlands Airport, Liverpool City Region, Teesside and Plymouth, whereby they will each become special economic zones with different rules to make it easier and cheaper to do business. The newly announced Help to Grow scheme was announced and it has been estimated that it will help 130,000 small and medium sized businesses by providing the digital and management tools needed to innovate, grow and help drive their recovery.
Chancellor Sunak also recognised the difficulties for first time buyers to get on the property ladder and announced a new mortgage guarantee scheme to enable homebuyers to secure a mortgage up to £600,000 with a 5% deposit, as well as an extension to September for the temporary cut in Stamp Duty Land Tax to support the housing market and protect and create jobs too.
The country and indeed the world has a long way to go to recover from the economic impact of the coronavirus pandemic. We hope these measures will help ease the impact for those most heavily hit.