- Budget delivers on commitment to provide security and stability to the British people through the pandemic – providing over £407 billion of support for families, jobs and businesses over this year and next.
- Key measures include extending furlough to the end of September, two further grants for the self-employed, a six month extension to the Universal Credit uplift, and new grants and loans for businesses.
- Announcements to build the economy include 45 new Town Deals, eight freeports, and a new Help to Grow scheme to boost the productivity of small businesses – delivering on the Conservatives’ agenda to level up across the country and build back better from the pandemic.
Dehenna Davison MP has welcomed the Spring Budget which provides billions of pounds to support businesses and families through the pandemic, delivers on the Conservatives’ promises it has made to the British people and invests in the UK’s future economy.
On Wednesday, the Government set out an ambitious plan that focuses on supporting people and businesses through this moment of crisis – well beyond the end of the roadmap – to ensure they have the security and stability they need.
At the heart of the Budget are measures to build our future economy, levelling up across all regions of the United Kingdom and spreading opportunity everywhere.
As part of the Government’s commitments to fund the nation’s priorities, the Budget confirmed:
- An extension of the Coronavirus Job Retention Scheme until the end of September, ensuring it continues to support employers as they begin to reopen. Two further grants will also be available to self-employed people – and the newly self-employed will also be eligible for both grants.
- A continuation of the temporary Universal Credit uplift for a further six months. The Budget also confirms new support for providing young people with new skills: including doubling the incentive payment to SMEs to take on apprentices of any age to £3,000, and £126 million to triple the number of traineeships next year.
- New Recovery Loans and a new Restart grant of up to £18,000 to help businesses as they reopen. Support for the sports, arts and culture sectors will also be increased by a further £700 million as they begin to reopen.
- Extending the business rates holiday, VAT cut and stamp duty holiday. There will also be a new mortgage guarantee scheme from April which backs 95 per cent mortgages – helping those with smaller deposits.
- Opening up the new Levelling Up Fund for its first round of bids, worth £4.8 billion across the United Kingdom. The Budget also announces 45 new Town Deals to help spread opportunity across the country.
- Announcing the locations of eight freeports in England, which will encourage free trade and bring investment to all regions of the country through lower taxes and cheaper customs.
- Launching the first ever UK Infrastructure Bank – located in Leeds – to invest in public and private projects to drive green growth and create green jobs.
- A new Help to Grow scheme to boost productivity of small businesses, to ensure they are embracing the latest technology and management training.
- Being honest with the British people about the need to fix the public finances. We are standing by our manifesto pledge not to increase Income Tax, NICs or VAT and we are freezing alcohol duty, and fuel duty for the 11th year in a row. However to fix the public finances, corporation tax on large company profits will increase to 25 per cent in 2023. This will be tapered and 70 per cent of businesses will be completely unaffected.
- The Budget will strengthen all four parts of the United Kingdom, with bespoke schemes for each nation confirmed additional funding for Scotland (£1.2 billion), Wales (£740 million), and Northern Ireland (£410 million).
Commenting, Dehenna said:
“Today’s Budget provides businesses and families in Bishop Auckland with the support and reassurance they need to get through the pandemic.
“With £407 billion of support for families, jobs and businesses, it is right that the Chancellor is honest with the British people about our public finances.
“At the same time, I was elected on a commitment to level up communities like ours, and I am thrilled that this Conservative Government is now making good on that promise. Moving the Treasury to Darlington and the creation of a fantastic new freeport in Teesside will create local growth and brilliant local job opportunities for local residents, giving more people the chance of a better life. This is exactly what I came into politics to do."
Brenda Mcleish, CEO of Learning Curve Group said:
“Being a born and bread north east business leader with our business that has its roots in the north east, yesterday was a fantastic budget announcement for the region. The north and Tees Valley in particular has been crying out for investment after the challenges it has faced over the years and particularly during the last year with Covid. It has filled the area with such optimism and is fantastic to see real investment and huge job opportunities.”
Chancellor of the Exchequer, Rishi Sunak MP said:
“Throughout this pandemic, my top priority has been to protect jobs, businesses and livelihoods. Today’s Budget reaffirms this commitment, with £407 billion to support the British people this year and next as one of the largest, most comprehensive and sustained responses this country has ever seen.
“It is thanks to successive Conservative governments that we have been able to respond to this crisis as boldly as we have. But we need to be honest about the challenges facing our public finances, and how we will begin to fix them.
“As we look ahead, this Budget lays the foundations of our future economy – driving up productivity, creating green jobs, supporting small businesses, and levelling up across the entire United Kingdom”.
Supporting people and businesses through the pandemic:
- 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 revenues have fallen by more than 30 per cent will receive the 80 per cent grant, while those whose profits have 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 who became self-employed last year, and filed their 19/20 tax return by 2 March, will now be eligible for both grants. Overall, we will have spent £34 billion on the self-employed during this crisis, among the most generous anywhere in the world.
- 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 SMEs to take on apprentices of any age to £3,000, alongside £126 million to triple the number of traineeships next year.
- 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.
- 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.
- 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.
- 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. That means the vast majority of businesses will receive 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.
Being honest about the need to fix the public finances…
- In 2023, the rate of corporation tax paid on large company profits will increase to 25 per cent. To help fix the problems the pandemic has created, we are asking only the largest, most successful companies to contribute more, from April 2023, on the rate of tax on their profits. In total, 90 per cent of businesses will pay less than the 25 per cent. Additionally:
- Even after this change the UK will still have the lowest rate in the G7 – lower than the US, Japan, Canada, France, Germany and Italy – and the fifth lowest in the G20
- The new rate won’t come in until two years’ time in April 2023 – well after when the OBR and Bank of England expect the economy to have recovered
- Because corporation tax is charged on profits, any struggling business will by definition be unaffected
- We will create a Small Profits Rate, maintained at the current rate of 19 per cent, for businesses with profits less than £50,000 – this means nearly 70 per cent of businesses will be completely unaffected
- There will be a taper above £50,000, so businesses only start paying the full rate on profits from £250,000
- We are extending tax loss carry backs for businesses from 1 year to 3 years: if businesses are making a loss now, they can claw back tax paid on previous profits to get a cash refund from HMRC of up to £760,000
- We will review the 8 per cent bank surcharge to ensure financial services remains globally competitive
- Corporation tax cuts have not led to a significant increase in investment
- We will support business investment through an unprecedented ‘Super Deduction’. Even with the lowest corporation tax rate in the G7, we must do even more to encourage businesses to invest now and unlock their cash reserves. Historically, the UK has invested a lot less than our peers, but investment drives innovation, productivity and growth. That is why, for the next two years, when businesses invest, they can reduce their tax bill by 130 per cent of the cost of that investment. The OBR have said this will lift business investment by 9 per cent, and lift us from 30th in the OECD’s world rankings for business investment to 1st. And for the two-year period this is in place, this will be the biggest business tax cut in modern British history – worth £25 billion.
- Personal tax thresholds will be maintained at their current levels. The Income Tax Personal Allowance has doubled over the last decade to £12,500 under this Conservative Government, standing now as the highest basic personal tax allowance of any G20 country and meaning a typical basic rate taxpayer now pays £1,200 less tax than in 2010. Next year, it will rise in line with inflation to £12,570 – but we will keep it at this higher level until April 2026. Similarly, the Higher Rate will also increase next year to £50,270 until April 2026.
- We will also maintain inheritance, CGT and the pensions lifetime allowances, and the VAT threshold at present levels. The inheritance tax-free thresholds will remain at existing levels until April 2026 (the Nil Rate band has been frozen since 2009). A surviving spouse or civil partner can pass on up to £1 million to their family without inheritance tax. The lifetime allowance will be maintained at just over £1 million until April 2026, but 95 per cent of individuals approaching retirement will be unaffected by this change. And for two years from April 2022, the VAT threshold will remain at £85,000, still more than twice as high as the EU and OECD averages.
- We are standing by our manifesto pledge NOT to increase Income Tax, NICs or VAT and we are FREEZING alcohol and fuel duty. We are sticking to our manifesto pledge on Income Tax, National Insurance Contributions and VAT. To keep the cost of living down, all alcohol duties will be frozen for the second year in a row, and fuel duty will be frozen for the eleventh year in a row, saving motorists £1,600 since 2010.
- We will tackle fraud in our business loan schemes. We are today investing £100 million in a new Taxpayer Protection Taskforce in HMRC, with 1,000 investigators seeking out and penalising fraud in our generous loan schemes. We are also introducing new measures to clamp down on tax avoidance and evasion.
Building our future economy…
- Levelling up our country and spreading opportunity everywhere. Today we are announcing 45 new Town Deals, locating Treasury North in Darlington, launching the £150 million Community Ownership Fund to help communities buy local assets such as pubs and theatres, and opening the first round of bids for the £4.8 billion Levelling Up Fund we announced at Spending Review last year to fund the infrastructure of everyday life.
- Announcing the locations of eight freeports in England. To encourage free trade and bring investment to all region of the country through lower taxes and cheaper customs, we are today revealing the locations of the first eight freeports in England: Teesside, Humberside, Felixstowe, Thames Gateway, Solent, Plymouth, Liverpool and the East Midlands. We will announce details of freeports in the devolved nations in due course.
- Creating green jobs. We are today investing in offshore wind port infrastructure in Teesside and Humberside, announcing a new environmental retail savings product to build on our world-leading sovereign green bond, making the City a leader in carbon offset markets trading, and launching the first ever UK Infrastructure Bank – located in Leeds – to invest in public and private projects to drive green growth and create green jobs.
- Launching a new Help to Grow scheme to boost the productivity of our small businesses. Too often our brilliant small firms don’t have the time or resources to get the extra skills they need to be more productive. So our new Help to Grow: Management scheme will help SMEs get world-class management training through government-funded programmes delivered through business schools, with businesses contributing only £750, just 10 per cent of the overall cost of the course. Help to Grow: Digital will level up the digital skills of our small businesses with a voucher entitling them to 50 per cent off the purchase of new productivity-enhancing software, up to a total of £5,000 each. Help to Grow will launch this Autumn and could benefit 130,000 SMEs.
- Making the UK the best place in the world for high growth, innovative companies. These businesses account for just 1 per cent of companies, but generate 80 per cent of our employment growth. At today’s Budget we are launching a wide-ranging consultation to make sure our Research and Development Tax Credits are internationally competitive; reviewing our Enterprise Management Incentive scheme so it supports growing companies to retain talent; attracting world-class talent to the UK through visa reforms aimed at highly skilled migrants, including a new unsponsored points-based visa and new visa processes for scale ups/entrepreneurs; ensuring high growth firms have access to capital by giving the pensions industry more flexibility to unlock billions from pension funds into innovative new ventures; launching a new Future Fund Breakthrough to support innovative tech businesses; and taking forward Lord Hill’s review of the UK’s listing regime.
Strengthening all four parts of the United Kingdom…
- Our future economy depends on remaining a United Kingdom. It is only because of the extra firepower we have from our four nations acting together that we’ve been able to provide such a significant fiscal response to the pandemic. As a result of the policies announced in today’s Budget, Scotland will receive £1.2 billion, Wales £740 million, and Northern Ireland £410 million in Barnett consequentials. Taken together with additional funding from last year’s Spending Review, the devolved nations are receiving an extra £7.2 billion in 2021-22.
- Furthermore, many of the policies today are UK-wide, including: extensions to furlough and self-employed schemes, Universal Credit extension, Recovery Loans, our reduced VAT cut, mortgage guarantee, Super Deduction capital investment, Community Ownership Fund, Levelling Up Fund, freeports, investment in green jobs, Help to Grow, visa reforms, Future Fund Breakthrough, reforms to pension funds, and our vaccines review.
- This Budget is also delivering bespoke projects in Scotland, Wales and Northern Ireland. We are committing funding towards the Aberdeen Energy Transition Zone, North Sea Transition Deal, and Global Underwater Hub in Scotland; the Global Centre for Rail Excellence and Holyhead Hydrogen Hub in Wales; accelerating six growth deals in Wales and Scotland, and exempting the Northern Ireland Housing Executive from corporation tax.