Wednesday’s budget was one of the most important and challenging. The measures necessary to contain the virus and protect livelihoods have placed huge pressures on the economy. With £407bn of support for the British people, this comes as one of the largest, most comprehensive & sustained response to the Covid-19 pandemic. As the independent Office for Budget Responsibility has outlined, because of the interventions to support jobs & businesses, the economy is now expected to recover more quickly.
This is very positive news, but we shouldn’t underestimate the difficulties ahead, and I appreciated the Chancellor’s candour on this point.
While significant progress has recently been made in the battle against Covid-19, life will not return to normal overnight. As such, I am pleased that the furlough scheme and the Self-Employed Income Support Scheme are to be extended – with an additional 600,000 people (those who became self-employed after the tax deadline last year) now able to apply for the SEISS grants. Abruptly stopping this support would have risked ripping the rug from under businesses as they re-open and begin their recovery.
The Chancellor also announced a number of initiatives to help keep businesses afloat. The Recovery Loan Scheme will allow businesses of any size to apply for loans between £25,000 and £10million, through to the end of the year. Restart Grants will also be available to help businesses as they reopen. Non-essential retail businesses will open first, so they will receive grants of up to £6,000. Hospitality and leisure businesses, including personal care and gyms, will reopen later and with certain restrictions, so they will be eligible for grants of up to £18,000. Moreover, firms in the tourism and hospitality sectors will continue to benefit from a 5% VAT rate.
To support the lowest paid and most vulnerable, the temporary £20 uplift to Universal Credit will continue for a further six months and we will give Working Tax Credit claimants their equivalent of 6 months of support through a one-off payment of £500. In addition, we will increase the National Living Wage to £8.91 from April.
Among the good news for homebuyers was the unveiling of a new mortgage scheme to assist first-time buyers, including incentives to lenders to offer more 95% mortgages. Additionally, a very welcome 3-month extension to the stamp duty holiday was announced.
We have also had to be realistic about how we are going to get some of the money back to fix the public finances. This is why corporation tax on large company profits will increase to 25% in 2023. Rightly this will be tapered and 70% of businesses will be completely unaffected.
More locally, I was delighted that Swindon will benefit from £19.5million via the Government’s Town Deal initiative. This funding will help Swindon enhance its town centre by revitalising existing heritage sites and improving connectivity. The regeneration and repurposing of buildings including the Carriage Works, Health Hydro and the Brunel Centre Market Hall will be a welcome boost to our local economy.
Yesterday was also World Book Day. It is crucial that we do all we can to ensure that young children learn to enjoy reading and I recently took part in a virtual book reading for one of our fantastic local nurseries. A book is a reminder that whatever the world throws at us, we are so fortunate to be able to pick up a good book and escape!
