I am pleased the Government remains committed to doing whatever it takes to protect jobs and livelihoods, where we can, in the remaining tough months ahead. Over the course of the past year, more than 700,000 people have lost their jobs, the economy shrank by almost 10% last year and borrowing is up.
Despite this, we have put in place one of the world’s most extensive economic support responses to protect jobs, businesses, and public services. As the Minister for Employment at DWP, I really do welcome the measures to support families as widely as possible, and protect jobs across the country, as we push for recovery, beginning through our 'roadmap' out of lockdown.
As well as extending previous financial support schemes, the Chancellor of the Exchequer, Rishi Sunak MP, has also introduced some new ones, worth £65 billion, bringing the total fiscal support overall to £407 billion. This is one of the largest comprehensive responses this country, and the world, has seen. We are using full fiscal firepower to protect businesses, jobs and livelihoods. Our response to Covid-19 is working and we now have a roadmap out of these restrictions. Now it is crucial we continue supporting individuals and businesses who still face difficult months ahead.
The Office for Budget Responsibility (OBR)
The OBR is now forecasting a “swifter and more sustainable recovery” than it expected last year, and now expects the economy to return to its pre-covid level by the middle of next year, 6 months earlier than previously thought. Specifically, they have forecast that the UK’s economic growth will accelerate next year at the fastest rate since records began, estimated at 7.3% - they also credited the Government’s interventions to support jobs for playing a crucial part in making this swift recovery possible.
They went on to state that unemployment levels have not peaked at the levels first predicted by the OBR last year (11.9%), instead stabilising this year at 6.5%. This Government remain committed to reducing unemployment through various Government schemes, including Kickstart, which I myself led on as Minister for Employment. The OBR concluded that the steps we have taken to protect jobs and businesses have worked, and we will continue to take an active approach in protecting those worst affected by this pandemic and the necessary measures which are in place.
The Chancellor’s statement
The Chancellor said the following on how the Government would continue to support those who have been most affected by this pandemic in the months ahead:
“As well as supporting people’s jobs, incomes, the lowest paid and most vulnerable, this Budget also protects businesses.
“And, Madam Deputy Speaker, as you can see, we are going long, extending our support well beyond the end of the road map to accommodate even the most cautious view about the time that it might take to exit the restrictions.”
“Coronavirus has caused one of the largest, most comprehensive and sustained economic shocks that this country has ever faced, and by any objective analysis, this Government have delivered one of the largest, most comprehensive and sustained responses this country has ever seen.
“We are using the full measure of our fiscal firepower to protect the jobs and livelihoods of the British people, but the damage done by coronavirus, combined with a level of support unimaginable only 12 months ago, has created huge challenges for our public finances.”
The Chancellor’s full statement, and the thoughts of MPs, can be found here: https://hansard.parliament.uk/Commons/2021-03-03/debates/C8618796-C14D-4695-8DC0-20BC6C6DDED4/FinancialStatement?highlight=budget#contribution-D940A4F9-D4E0-4B90-8166-0DC9E2CAFA2C
Full details on the measures confirmed by the Chancellor yesterday are as follows: https://www.gov.uk/government/news/budget-2021-what-you-need-to-know
Furlough
- We are extending furlough until September 30th, helping millions of people through the challenging months ahead.
- Workers on the scheme will continue to have up to 80% of their salary subsided by the government, with a maximum of £2,500 a month.
- This will gradually be lifted, with the government reducing our contribution to 70% from July and employers having to pay 10% for hours not worked.
- In August and September, the government will pay 60% and employers 20%.
- Currently, there are around 4.7 million people currently on furlough, including 1.2 million in hospitality.
Self-employed
- The Government is expanding and extending our self-employment support schemes with two further grants, so that more people can get the support they need.
- 600,000 self-employed people who were previously unable to access this scheme are now pleasingly eligible to claim grants for February to April from the end of April, then for May to September from late July.
- This is because tax return data from 2019-20 is now available.
- These grants will be worth 80% of three months’ average trading profits up to £7,500 for those who saw their turnover fall by 30% or more.
- For those whose turnover fell by less, they will receive a 30% grant.
- 600,000 self-employed people who were previously unable to access this scheme are now pleasingly eligible to claim grants for February to April from the end of April, then for May to September from late July.
Help for businesses affected
- £5 billion to help the high street recover, ensuring the hardest-hit businesses have the support they need through the next stage of recovery.
- Non-essential shops will receive grants of up to £6,000 per premises.
- £5 billion for new Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England.
Loans for businesses
- A new UK-wide Recovery Loan Scheme to make available loans between £25,000 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery.
- The Government will make a guarantee of 80% to lenders.
Business rates holiday
- 750,000 eligible businesses in the retail, hospitality and leisure sectors in England will benefit from business rates relief.
- The 100% business rates holidays has been extended until the end of June.
- The following 9 months, up to the end of the next financial year, these businesses will be discounted by two thirds, up to £2 million for businesses which had to close due to the pandemic.
- There will also be a lower cap for businesses which have been able to stay open.
- Small and medium-sized employers in the UK will continue to be able to reclaim up to two weeks of eligible Statutory Sick Pay (SSP) costs per employee from the Government.
- We are extending the loss carry back rules worth up to £760,000 per company.
VAT Reduction
- Extension to the VAT cut to 5% for hospitality, accommodation and attractions across the UK until the end of September, followed by a 12.5% rate for a further six months until 31 March 2022, before returning to the original level of 20% in April 2022.
Working tax credit payments and Universal credit
- Six-month extension of the £20 per week Universal Credit uplift in Great Britain
- This is worth more than £1,000 a year for around 6 million families across the UK.
- A one-off payment of £500 to eligible Working Tax Credit claimants across the UK – the equivalent of 6 weeks’ payment.
Apprenticeships and traineeships
- Extension of the apprenticeship hiring incentive in England to September 2021 and an increase of payment to £3,000.
- £7 million for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector.
- Additional £126 million for 40,000 more traineeships in England, funding high quality work placements and training for 16-24 year olds in 2021/22 academic year.
Housing and stamp duty
- Extending the temporary cut in Stamp Duty Land Tax in England and Northern Ireland until September will support the housing market and protect and create jobs.
- This scheme will be extended for the first £500,000 until 30th June.
- Thereafter, there will be no stamp duty for the first £250,000 until the end of September, and it will go back to the usual level of no stamp duty for the first £125,000 from 1 October.
- A new mortgage guarantee scheme will enable all UK homebuyers secure a mortgage up to £600,000 with a 5% deposit.
Culture
- Extension of the Film & TV Production Restart scheme in the UK, with an additional £300 million to support theatres, museums and other cultural organisations in England through the Culture Recovery Fund.
- £90 million funding to support our government-sponsored national museums in England due to the financial impact of Covid-19.
- £300 million for major spectator sports, supporting clubs and governing bodies in England as fans begin to return to stadia.
- An extra £500 million will go towards supporting the film industry to help them restart.
Additional measures
- No rise in alcohol or fuel tax duty for the next financial year.
- More than doubling the legal limit for single contactless payments, from £45 to £100
- £10 million to support veterans with mental health needs across the UK.
- Following a significant rise in domestic abuse during the pandemic, the Chancellor announced a further £19 million to tackle domestic abuse in England and Wales, with funding for a network of ‘Respite Rooms’ to support homeless women and a programme to prevent reoffending.
- An extra £1.65 billion cash injection to ensure the Covid-19 vaccination roll-out in England continues to be a success.
- Includes £33 million for vaccine testing and development against future variants and £22 million for study into combining vaccines.
For further information on the Budget, please visit: