Published: Wed, March 03, 2021

UK's Sunak to promise 'whatever it takes' in new COVID budget plan

UK's Sunak to promise 'whatever it takes' in new COVID budget plan

"For the next two years, when companies invest, they can reduce their tax bill not just by a proportion of the cost of that investment, as they do now or even by 100% of the cost, the so-called full expensing some have called for, with the Super Deduction they can now reduce their tax bill by 130% of the cost".

The state has pumped out around £280 billion in support packages over the past year to fight the virus fallout, according to the Treasury.

News about the Budget and its expected furlough measures dominates the nation's papers on Wednesday.

A Reuters poll of dealers showed Britain was expected to sell almost 250 billion pounds ($347 billion) of government bonds in the 2021/22 financial year, the second-highest total on record.

Next year borrowing is forecast to be £234 billion, 10.3% of gross domestic product (GDP), a measure of the size of the economy, "an amount so large it has only one rival in recent history - this year".

Underlying debt rises from 88.8% of GDP this year to 93.8% next year, it then peaks at 97.1% in 2023-24, before stabilising and falling slightly to 97% and 96.8% in the final two years of the forecast.

But he warned it would take "a long time" to rebuild and pledged to do "whatever it takes" to support people. Our borrowing is the highest it has been outside of wartime. "But we will recover".

"The OBR forecast that our economy will grow this year by 4%, by 7.3% in 2022, then 1.7%, 1.6% and 1.7% in the last three years of the forecast".

By extending support until end-September, the Chancellor has also given many businesses an extra cushion as they attempt to rescale and rehire when the economy reopens.

"There's now light at the end of the tunnel with a roadmap for reopening, so it's only right that we continue to help business and individuals through the challenging months ahead - and beyond".

- The Universal Credit uplift of £20 a week will continue for a further six months, well beyond the end of this national lockdown.

A new mortgage guarantee scheme will enable homebuyers to secure a mortgage up to £600,000 with a 5% deposit, and an extension to the temporary cut in Stamp Duty Land Tax to September will support the housing market and protect and create jobs.

The Labour leader urged the United Kingdom government to adopt a targeted approach to support, pointing to the Welsh First Minister's decision to cap its Covid business rates relief, making those with properties with a rateable value over £500,000 ineligible.

To continue supporting the 150,000 businesses in the tourism and hospitality sectors and to protect 2.4 million jobs, the government has extended the temporary 5% reduced rate of Value-Added Tax until 30 September 2021.

In the days prior to his latest Budget speech, Sunak had stated that alcohol duty would be addressed and referenced his cancellation of planned increases to beer, cider, wine and spirit duty in last year's Spring Budget.

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