uk economy spanish flu covid frost

The Office for National Statistics has said over the whole of 2020 the economy dived by 9.9 per cent - the worst annual performance since the Great Frost devastated Europe in 1709
The furlough scheme that has cost Britain £53billion will be extended to the end of September as Rishi Sunak vows to do 'whatever it takes' to help the economy recover.

Comment: Note that's just what the government has paid out, this sum does not include the massive immediate financial losses by staff and small and medium businesses that have been prevented from working for nearly a year now.

In today's Budget, the Chancellor will extend the job protection scheme for an extra five months beyond the current deadline at the end of April.

The move takes the scheme, which has cost almost £5 billion a month, well beyond the official target for ending lockdown on June 21, and raises questions about whether ministers expect to lift all restrictions at that point.

uk debt 100 years 19th century

Official numbers published last month showed state debt was above £2.1trillion in January
Self-employed workers will also benefit from another round of support paying them 80 per cent of profits. In a surprise move, the scheme will be extended to cover 600,000 'excluded' workers who did not qualify before because they did not begin trading until 2019.

The Chancellor is also expected to extend the £20-a-month top-up to Universal Credit for another six months.

The current VAT cut for hospitality and tourism firms will also be extended, probably until the end of the summer. And a business rates holiday for hard-hit sectors will continue beyond the current deadline at the end of this month.
uk debt

Government borrowing could be close to £400billion this financial year and is expected to stay high for years to come
Mr Sunak is also launching a £100million taskforce to tackle furlough fraud, estimated to have cost up to £5billion.

The Queen last night spoke with Mr Sunak by phone instead of the traditional audience on the eve of the Budget.

The Treasury shared a photograph of the chancellor during the call.

This is what Rishi Sunak will be dishing out
  • The £53billion furlough job protection scheme extended from its current end point on April 30 to the end of September
  • Corporation tax up from 19 per cent to 20, with a 'pathway' to raising it to 23 per cent. There may be an exemption for entrepreneurs
  • Hospitality and tourism firms will benefit from an extension of the VAT cut - probably until the end of the summer
  • Business rates holiday for the hardest hit sectors will continue beyond the current deadline at the end of this month
  • No increase in the rate of income tax however thresholds are set to be frozen for three years, dragging 1.6million into higher rates
  • Fuel duty is set to be frozen after Boris Johnson vetoed plans for an immediate 5p hike
  • The stamp duty holiday - a tax break on purchases of homes worth less than £500,000 - set to be extended until the end of June
  • An extra £410million for theatres and other arts venues. Cricket to benefit from £300million for sports
  • Community groups to receive £150million to support local pubs and sports clubs
  • A new £520million scheme to help small businesses grow and give them access to advice from the country's top business schools
  • New £100million taskforce to tackle furlough fraud, which is estimated at up to £5billion

The Queen last night spoke with Mr Sunak by phone instead of the traditional audience on the eve of the Budget. The Treasury shared a photograph of the chancellor during the call
The Chancellor said last night that support schemes, whose total cost is near £300billion, had been 'a lifeline to millions'.

Comment: Millions more are reliant on the government to survive, meaning the government holds even more power over its citizens than it did prior to the lockdowns. And, as happens with those on benefits, the government can threaten to withdraw this literal 'lifeline' at anytime should citizens not comply with their diktats: "Sinister" plan to MANDATE Covid vaccine for all NHS staff decried by Trusts

Today he will vow to use the state's full 'fiscal firepower' to protect jobs and livelihoods.

'We will continue doing whatever it takes to support the British people and businesses through this moment of crisis,' he added.

Government sources indicated only last week that the furlough scheme and other support measures would carry on until at least the end of June.

Mr Sunak's decision to push on until the end of September, three months after all restrictions are due to be lifted, will raise eyebrows.

Treasury sources said the move was to avoid a 'cut-off' as some firms resume trading for the first time in more than a year .

'They don't want a cliff edge and we have listened,' said a source. But the Treasury also acknowledged the extension would be a 'cushion' if reopening is delayed.

The cost of the scheme is due to be curbed after the economy is reopened.

Furloughed staff now get 80 per cent of pay from the state, up to £2,500 month, with employers paying only national insurance and pension contributions.

From July firms will also have to pay 10 per cent of wages as the state share shrinks to 70 per cent - and in August the figures will change again, to 20 per cent and 60 per cent respectively.

Almost five million people were furloughed at the end of January - double the number in October, but well below the peak of almost nine million last May.

Comment: Many that were furlouged are now, or soon will be, unemployed: Over a third of UK employers planning to make staff redundant, BoE predicts unemployment rate to DOUBLE

Up to last week the scheme had cost £53.4billion. Business leaders welcomed the new support last night. Kate Nicholls of UK Hospitality called it 'a very positive move.

And CBI chief economist Rain Newton-Smith said: 'Extending the scheme will keep millions more in work and give businesses the chance to catch their breath as we carefully exit lockdown.'

Business Secretary Kwasi Kwarteng rejected calls for tax rises yesterday as a Tory debate raged over how to tackle the huge deficit caused by the pandemic.

Former party leader William Hague has backed Rishi Sunak to raise taxes in today's Budget. He said the dire state of public finances meant 'at least some business and personal taxes have to go up'.

Lord Hague said yesterday that those opposing tax rises harboured 'dangerous illusions' that low interest rates would let Britain borrow its way out of the crisis.

But in an intervention that underlines Cabinet tensions, Mr Kwarteng predicted 'strong growth' this year and said it was vital that the economic recovery was not 'crushed' by higher taxes. He said growing the economy will be the 'best way to deal with the growing deficit'.

Theatres, museums and live music venues will be handed a £410million lifeline to help them stay afloat until they are allowed to reopen.

Rishi Sunak will unveil the move in today's Budget alongside fresh support for sport and pubs, which have also suffered heavy restrictions during the lockdowns of the last year.

The move follows talks between the Chancellor and Culture Secretary Oliver Dowden, who last year secured a £1.57billion bailout for the industry. Most arts and cultural events, including theatres, museums and galleries, are expected to get the green light to reopen in May.

But many may be unable to reopen their doors until Step Four of the roadmap from June 21 when the Government hopes to lift all social distancing restrictions that limit the size of audiences.