Last Wednesday saw the Chancellor of the Exchequer, Rishi Sunak, set out the government’s Budget for 2021. The last year has been incredibly tough for individuals, families, businesses, and the country as a whole, so it was critical that the Chancellor set out a budget which focused on protecting the jobs and livelihoods of the British people. This was about looking at the short-term measures relating to the pandemic whilst also looking at the longer-term recovery process and making the United Kingdom a global leader in research, innovation and a fantastic place to invest.
Support for Individuals & Businesses
The Covid-19 pandemic has seen unprecedented pressures placed on both individuals and business. To mitigate this, over the last year, the government have put in place several support measures to try and protect jobs and livelihoods. Given the Prime Minister’s recent announcement setting out the road map for re-opening, I very much welcome the extension of a number of these support measures.
For those who have been furloughed, the scheme will now run until the end of September. Employees will continue to receive 80 per cent of wages for hours not worked, but as businesses reopen, employers will be asked to contribute 10 per cent of wages in July, and 20 per cent in August and September.
For the self-employed, the Chancellor announced a fourth SEISS grant covering the period February to April and a targeted fifth grant will be available from May. In good news, those who became self-employed last year, and filed their 19/20 tax return by 2nd March, will now be eligible for both grants. Not so good is the continued lack of support for those who are considered ‘excluded’, especially those who pay themselves through dividends.
Critically for businesses across the patch, the 100 per cent business rates holiday has been extended to June, with a 66 per cent rate relief from July until March 2022. Likewise, the 5 per cent reduced rate of VAT is being extended for a further six months until the end of September. The rate will then increase to 12.5 per cent from October until the end of March, before returning to the normal 20 per cent rate from April 2022. I have been lobbying the Treasury for months on both issues so it’s great that these support measures have been extended.
For individuals looking to get on the property ladder, the introduction of the new mortgage guarantee scheme, allowing first-time buyers and existing homeowners the chance to secure a mortgage with just a 5% deposit, is good news as is the extension of the stamp duty holiday to the end of June.
The temporary £20 uplift to Universal Credit has been a vital lifeline for a number of constituents over the last year so I welcome the fact that it will continue for a further six months. As I have said previously, this isn’t necessarily the right move permanently and there is clearly a need for further debate on welfare reform further down the road, but this is needed in the short-term.
Building the Future Economy
It is crucial that the policy of ‘Levelling up’ is more than just a buzzword and actually has an impact. Therefore, I welcome schemes such as the Community Ownership Fund to help communities buy local assets such as pubs and the Levelling Up Fund, designed to fund the infrastructure of everyday life.
Boosting productivity post-Covid is vital for the economy here in Teignbridge and I very much hope local businesses will take advantage of the new Help to Grow scheme, designed to boost the productivity of our small businesses. Too often our brilliant small firms don’t have the time or resources to get the extra skills they need to be more productive. These schemes should solve that issue.
Overall, this Budget has delivered a very welcome and much needed package of measures, focused on protecting the jobs and livelihoods of the British people both in the short term as we re-open post-pandemic but also in the longer term as we rebuild the economy and make areas such as Teignbridge an attractive place to live and work.
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