the enormous cost of shoring up the
economy because of the pandemic
has been spelled out by the chancellor
in today's budget
mr sunak revealed a series of measures
that will take the uk's
overall tax burden to its highest level
since the 1960s
and he insisted that without what he
called corrective action
the national debt would go on rising
indefinitely
now the furlough scheme for workers and
support for the
self-employed will be extended to
september as will that
20 pounds a week uplift in universal
credit
for the retail hospitality and leisure
sectors
the business rates holiday will continue
until june and there's an extra 65
billion pounds
being spent on the whole range of
support measures
paying for all of this will take a long
time says the chancellor
income tax allowances will be frozen
from april 2022 for four years
and that means more than a million
people will start to pay income tax
and a million more will start to pay the
higher rate and then we have corporation
tax that's the tax that's paid by
companies on their profits that'll rise
from 19 to 25
by 2023 and all that will only make
something of a dent really in the record
amounts that the government is borrowing
more than 355 billion pounds this year
alone we'll be looking at the measures
in detail but we'll start with our
political editor
laura koonsberg
the virus has clouded everything making
the future hard to see
but the economic alert has been flashing
red all the while
lockdowns cut income busted the
country's bank balance
and the red box's first job to extend
emergency lifelines
but repeatedly the chancellor had
promised us
hard truths too what was originally
thought to be a temporary disruption to
our way of life
has fundamentally altered it so
emergency measures brought in
during the scramble at the start of the
pandemic will go on for months to come
the furlough scheme will be extended
until the end
of september for employees there will be
no change to the terms
they will continue to receive 80 percent
of their salary
for hours not worked until the scheme
ends
billions more will be spent during this
strange lockdown era
a long list of props under the economy
six months more of 20 pounds extra on
universal credit
lower vat and cheaper stamp duty but for
this chancellor for his party
that simply can't last forever the
amount we've borrowed
is comparable only with the amount we
borrowed during the two
world wars it's going to be the work
of many governments over many decades
to pay it back just as it would be
irresponsible to withdraw support too
soon
it would also be irresponsible to allow
our future borrowing and debt to rise
unchecked
no surprise he took a big gulp before
what came next
big new taxes a million people will move
into the higher rate of income tax
and 1.3 million who don't earn much will
start to pay
our first step is to freeze personal tax
thresholds
this policy does remove the incremental
benefit
created had thresholds continued to
increase
with inflation we are not hiding it
business will cheer a chunky new tax
break to get them investing
the so-called super deduction with the
super deduction
they can now reduce their tax bill by
130 percent of the cost
but from 2023 in a real about turn
some companies will pay a lot more tax
on profits
the rate of corporation tax paid on
company profits
will increase to 25
these are significant decisions to have
taken
decisions no chancellor wants to make
i recognize they might not be popular
but they are honest big spending in tune
with the boss perhaps
but extraordinary measures some in his
own party might think
in extraordinary times an important
moment
is upon us a moment of challenge
and of change of difficulties yes
but of possibilities too this
is a budget that meets that moment and i
commend it
to the house
[Music]
despite all the billions public spending
overall will actually go down
but with huge numbers and big taxes from
the tories how would labour cut through
the gloom
one day we'll all be able to take our
masks off and so will the chancellor
and then you'll see who he really is
this is a budget
that didn't even attempt to rebuild the
foundations of our economy
or to secure the country's long-term
prosperity
instead it did the job the chancellor
always intended
a quick fix papering over the cracks
the party opposite spent a decade
weakening the foundations of our economy
now they pretend they can rebuild it but
the truth is
they won't confront what went wrong in
the past and they have no plan
for the future the rishi sunak was
conscious of spreading spending to new
tory constituencies
and across the uk too the chancellor
stood up today and doubled down at
exactly the same mistake that he's been
making through
this pandemic temporary extensions and
temporary support
could only ever mean a temporary
reprieve for those millions who've been
crippled
by uncertainty for months there'll be
millions of people out there and tens of
thousands of businesses
and self-employed who will be very very
disappointed
liberal democrats have been particularly
calling on more help for
small businesses micro businesses and
the self-employed
and there was just nowhere near enough
the chancellor chose not just to tinker
but to make big decisions
but they could have to shift with a tiny
flicker to the cost of all his borrowing
or an even more prolonged pandemic this
budget
the way the country earns a living is
deeply vulnerable to what comes
next strangeness of the last 12 months
all the pain of the pandemic has changed
so much about our economy
about our politics and also about our
assumptions
so today we saw a conservative
chancellor pump up the emergency airbags
again
first and foremost to extend the
emergency support that has got many
businesses and families through this
pandemic
but second of all he set out and chose
to give a plan for very
chunky tax rises that will hit business
and will hit
millions of taxpayers in the years to
come not just
the wealthy and despite all the big sums
that have been spent and all the big
sums that are there in the years to come
the amount of money that will be
available for day-to-day spending
is actually still set to shrink and
rishi sunak today has also perhaps
in contradiction with some of his own
instincts ended
tori dreams of a return to a low tax
lean
economy any time soon but you know hugh
in the last few months there has been so
much
give in the years to come there's no
question there's going to be
a lot of take laura many thanks again
laura kinsburg there with her analysis
of the budget uh at westminster
um let's turn then to the likely
economic impact
of the range of measures announced by
the chancellor today
including that rise in corporation tax
that's the tax paid on
company profits which represents really
a notable reversal
of the conservative policy of recent
decades the office for budget
responsibility says the overall
budget package will lead to the highest
overall tax burden on the uk economy
for more than half a century our
economics editor faisal islam explains
more
there's never been a real-world budget
backdrop like this
and nor has there been a budget like it
either it contains a message
that the vaccine is getting us through
to a reopening so it's worth one more
push
pumping tens of billions more in
immediate support
to carry on saving jobs the real story
of the decisions
is in the budget book charts and what's
known as the scorecard
adding up the impact of all the new
policies today by year
in this coming year the government will
be pumping significantly more
into the economy nearly 60 billion
pounds extra
in furlough self-employment grants and
the massive incentive to get businesses
to invest
but significantly higher corporation tax
and the freeze on personal tax
allowances
clause back much of that but only
substantially after three years
that extension of support and progress
on the vaccine all leads to this
the latest official forecasts are that
unemployment will peak at 6.5 percent
up from now but far lower than the
expected peak of 8 percent
and above 10 in last year's pessimistic
scenario
basically this means far more people
than expected returning straight to
their jobs from furlough
the flip side of that is the amount the
government has borrowed to pay for these
support schemes
has been at record peacetime levels
multiples of previous years
that had been expected to fall
relatively fast instead in the coming
year as a result of today's spending
that stays above 10 of the size of the
economy
before falling back the reason he's
raising taxes
over the next few years is not to pay
back the debt we've accumulated over the
last couple of years
rather it's to deal with the fact the
economy will be smaller and therefore
the ongoing deficit would be bigger but
what's happened over
this year that's something we will pay
back over a very long time
the core calculation in this budget is
to let
near record levels of borrowing continue
in order
to sustain ongoing crisis support
for workers and also a novel attempt to
kick businesses
to invest the bill comes a couple of
years later
mainly for big corporations but also
some
income taxpayers the end result
the pandemic having a permanent impact
on the size of our government has the
pandemic
fundamentally changed the conservative
approach to big business big borrowing
big taxation
and big spending obviously the pandemic
has dealt us
uh pretty bad damage to the public
finances in the economy
and i think i and the government have a
responsibility to put those on
back in a strong position over time but
do that in a way
that is supportive of our economic
recovery in the short term
but also do so in a way that is fair
the chancellor says the economy can be
green with wind power investments and
spread around the country with eight new
freeports
but he needs big business to invest huge
sumps to
power this recovery before they pick up
a large bill
faisal islam bbc news