Rishi Sunak has unveiled a £65bn boost for Covid-hit businesses and workers at the Budget but also warned he will soon begin the painful process of repairing the public finances.
The Chancellor unveiled extensions to the furlough scheme, business rates relief, the £20 boost to weekly Universal Credit payments and the stamp duty holiday.
However, he also started to shore up the public finances, announcing a large tax hike for businesses in 2023 and a "stealth tax" on workers.
Here’s everything the Chancellor has announced in the Spring Budget 2021:
Key Budget 2021 announcements at a glance:
Furlough support extended until September 2021
Corporation tax will rise to 25pc in 2023 but small firms benefit from lower rate
£5bn grant scheme announced for high street and hospitality firms
OBR predicts swifter recovery; GDP back at pre-Covid levels in mid-2022
£20 boost for weekly Universal Credit payments extended for six months
Stamp duty cut and business rates holiday extended
Jobs
The furlough scheme has been extended until the end of September. Furloughed employees will receive 80pc of their salary but businesses will be asked to contribute to their wages from the end of July as the recovery gathers pace.
Self-employed workers will be able claim a fourth grant from the Self-Employed Income Support Scheme worth 80pc of three months’ trading profits at up to £7,500. The newly self-employed in the 2019-20 financial year will now also be able to receive the payments. A fifth grant will also be available.
The Treasury has also already confirmed extra funding for apprenticeships with a cash incentive to take on apprentices boosted by £1,000 to £3,000 per hire.
The Chancellor has extended the £20 boost to weekly Universal Credit payments for a further six months.
Taxes
Corporation tax will rise from 19pc to 25pc in April 2023 but Mr Sunak said the UK will still have the lowest rate in the G7.
A "small profits rate" will be introduced for firms with profits under £50,000, meaning small firms will still enjoy the lower 19pc corporation tax rate. Only 10pc of companies will pay the full higher rate, the Chancellor said.
Mr Sunak also announced a "super deduction" - a tax relief to spur business investment. When companies invest they can reduce their tax bill by 130pc of the cost of the investment.
The Chancellor said income tax thresholds will be frozen until 2026 after next year's planned increases.
All alcohol duties and the fuel duty were frozen.
Housing
The Chancellor has unveiled a mortgage guarantee scheme to help homebuyers purchase property with small deposits. Under the scheme, the Government will offer lenders a guarantee, incentivising them to boost the number of riskier 95pc mortgages.
The Chancellor also announced a three-month extension to the stamp duty holiday for properties under £500,000. The holiday for properties worth less than £250,000 will apply until the end of September.
Saving Covid-hit sectors
Businesses will be able access a new "Recovery loan scheme" to replace the Bounce Back and coronavirus loan schemes.
The Chancellor has unveiled a £5bn Restart Grant scheme that will provide Covid-hit firms up to £18,000 to boost their survival chances.
The cash injection will be aimed at retail, hospitality, accommodation, leisure and personal care firms. Retailers will be able to access £6,000 per business.
Business rates relief for the hardest hit sectors, such as retail and hospitality has been extended for three months. For the remaining nine months, business rates will be discounted by two-thirds - a £6bn tax cut for firms, Mr Sunak said.
Hospitality and tourism firms will benefit from VAT being held at 5pc.
Other announcements
The Bank of England will be given a new monetary policy remit with green goals to help tackle climate change.
Mr Sunak revealed the new UK Infrastructure Bank will be based in Leeds. It will be given £12bn of capital and £10bn of government guarantees to help drive an investment boom. Almost £400m will be invested alongside the private sector in high-growth start-ups.
A new Treasury campus will be set up in Darlington in the north east of England.
More than £1bn for new town redevelopment deals was announced.
Eight new free ports will be set up at East Midlands airport, Liverpool, Felixstowe, Plymouth, Thames, Teesside, Humber and Solent.
The Treasury has set aside an extra £1.7bn to aid the vaccine rollout.
The UK will launch a green savings bond aimed at retail investors to help raise money to drive the transition to net zero carbon emissions.
Economic forecasts
The Office for Budget Responsibility predicted a "swifter and more sustained recovery" than its November forecasts but warned of long-term scarring.
The Budget watchdog said GDP will return to pre-Covid levels by mid-2022 but the economy will be 3pc smaller than its pre-Covid path in five years.
GDP will rebound 4pc in 2021, down from the previous prediction of 5.5pc, while growth will accelerate to 7.3pc next year. Unemployment will peak at 6.5pc, the OBR predicted.
Mr Sunak said total fiscal support has reached £407bn. The OBR revealed borrowing hit £355bn in 2020-21 and will still be £234bn in 2021-22. The deficit will fall to 4.5pc of GDP in 2022/23.
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