Ajay Kumar at 22:09, 23 July 2023

2023-07-23T22:09:47Z

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{{Short description|none}}
{{use British English|date=March 2021}}
{{use dmy dates|date=March 2021}}
{{Infobox government budget
|title=United Kingdom budget
|parliament=[[List of MPs elected in the 2019 United Kingdom general election|58th]]
|country=United Kingdom
|previous_budget=2020 United Kingdom budget
|previous_year=2020
|next_budget=October 2021 United Kingdom budget
|next_year=October 2021
|image=Royal Coat of Arms of the United Kingdom (HM Government).svg
|imagesize=200px
|caption=
|submitter=
|submitted_to=
|date_submitted=
|presented=Wednesday 3 March 2021
|passed=
|year=March 2021
|chancellor=[[Rishi Sunak]]
|party=[[Second Johnson ministry|Conservative Party]]
|Total_Revenue=£819 billion
|Total_Expenditures=£1.053 trillion
|spending=
|tax_cut=
|debt_payment=
|surplus=
|deficit=£234 billion
|debt=
|bill=
|bill_link=
|url= [https://www.gov.uk/government/topical-events/budget-2021 Budget 2021]
|minister=
|treasurer=
|gdp=
}}

The '''March 2021 United Kingdom budget''', officially known as '''Protecting the Jobs and Livelihoods of the British People''' was a [[Budget of the United Kingdom|budget]] delivered by [[Rishi Sunak]], the [[Chancellor of the Exchequer]] in March 2021.<ref>{{Cite web|url=https://www.bbc.co.uk/news/uk-politics-55352605|title=Chancellor Rishi Sunak reveals date of next Budget|date=17 December 2020|website=BBC News|access-date=17 December 2020}}</ref> It was expected to be delivered in Autumn 2020, but was postponed because of the [[COVID-19 pandemic in the United Kingdom|COVID-19 pandemic]].<ref>{{Cite web|url=https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/871799/Budget_2020_Web_Accessible_Complete.pdf|title=BUDGET 2020: Delivering on our promises to the British people|last=|first=|date=11 March 2020|website=HM Treasury|url-status=live|archive-url=|archive-date=|access-date=11 March 2020}}</ref><ref>{{Cite news|url=https://www.bbc.com/news/uk-politics-51835306|title=Sunak pumps billions into economy to combat virus|date=11 March 2020|work=BBC News|access-date=11 March 2020|language=en-GB}}</ref><ref>{{Cite news|url=https://www.bbc.com/news/business-54267795|title=Covid crisis forces Autumn Budget to be scrapped|work=BBC News|date=23 September 2020|accessdate=23 September 2020}}</ref> It succeeds the [[2020 United Kingdom budget|budget held in March 2020]], and the [[July 2020 United Kingdom summer statement|summer statement]] and [[September 2020 United Kingdom Winter Economy Plan|Winter Economy Plan]] held in summer and autumn 2020, respectively. The budget is the second under [[Premiership of Boris Johnson|Boris Johnson's government]], also the second to be delivered by Sunak and the second since Britain's [[Brexit|withdrawal from the European Union]]. The budget was the first for government expenditure in the United Kingdom to exceed £1 trillion{{cn|date=October 2021}}.

It was confirmed on the previous day that the [[British government response to the COVID-19 pandemic#Coronavirus Job Retention Scheme|Coronavirus Job Retention Scheme]] and the [[British government response to the COVID-19 pandemic#Self Employment Income Support Scheme|Self Employment Income Support Scheme]] had been extended to 30 September 2021.<ref>{{Cite news|date=2 March 2021|title=Furlough support scheme to be extended in Budget until September|language=en-GB|work=BBC News|url=https://www.bbc.com/news/business-56259094|access-date=2 March 2021}}</ref>

== Key measures ==
In his budget speech, [[Rishi Sunak]] emphasized the effect the [[COVID-19 pandemic in the United Kingdom|COVID-19 pandemic]] has had on the economy, with 700,000 people losing their jobs, the economy shrinking by 10% (the largest fall in 300 years), and the highest borrowing outside wartime.<ref name=":5">{{Cite web|date=2021-03-03|title=UK Budget 2021: the chancellor's speech in full|url=https://www.ft.com/content/2f1829d4-89e5-4b58-9394-28da615cc0ae|access-date=2021-03-04|website=www.ft.com|language=en-GB}}</ref><ref name=":0">{{Cite news|date=2021-03-03|title=Budget 2021: Rishi Sunak vows to protect jobs but tax hikes loom|language=en-GB|work=BBC News|url=https://www.bbc.com/news/uk-politics-56264885|access-date=2021-03-04}}</ref><ref name=":1">{{Cite news|last1=Partington|first1=Richard|last2=Walker|first2=Peter|date=2021-03-03|title=Budget 2021: key points at a glance|language=en-GB|work=The Guardian|url=https://www.theguardian.com/uk-news/2021/mar/03/budget-2021-key-points-rishi-sunak|access-date=2021-03-04|issn=0261-3077}}</ref> It is expected that unemployment will peak at 6.5% (an improvement on the previous estimate of 11.9%) and that the [[Deficit spending|budget deficit]] will reach £355 billion in 2021, or 17% of [[Gross domestic product|GDP]], the highest level in peacetime.<ref name=":1" />

Measures in the budget include:<ref name=":0" /><ref>{{Cite web|title=Budget 2021: What you need to know|url=https://www.gov.uk/government/news/budget-2021-what-you-need-to-know|access-date=2021-03-04|website=GOV.UK|language=en}}</ref>

=== COVID-19 ===

* Extension of the [[British government response to the COVID-19 pandemic#Coronavirus Job Retention Scheme|Coronavirus Job Retention Scheme]] and [[British government response to the COVID-19 pandemic#Self Employment Income Support Scheme|Self Employment Income Support Scheme]] until the end of September
* £1.65 billion injection into the [[COVID-19 vaccine]] roll-out in [[England]]
* £28 million to increase the UK's capacity for vaccine testing, clinical trials and improve the UK's ability to acquire samples of new [[variants of SARS-CoV-2]]
* £22 million to test the effectiveness of combinations of different COVID-19 vaccines
* An extra £5 million investment in clinical-scale [[Messenger RNA|mRNA]] manufacturing
* Extending £500 [[NHS Test and Trace]] support payments in England until the summer
* Total [[COVID-19]] support package for 2021–22 is £352 billion

=== Taxation ===

* No changes to rates of [[income tax]], [[National Insurance|national insurance contributions]], or [[Value-added tax in the United Kingdom|value-added tax]]
* Tax-free personal allowance frozen at £12,570 for five years from 6 April 2021
* Higher rate income tax threshold frozen at £50,270 for five years from 6 April 2021
* [[United Kingdom corporation tax|Corporation tax]] on company profits above £250,000 to rise from 19% to 25% in April 2023
** Rate to be kept at 19% for smaller companies with profits of less than £50,000
* [[Stamp duty in the United Kingdom#Stamp Duty Land Tax|Stamp Duty]] holiday on house purchases in England and Northern Ireland extended to 30 June 2021 for purchases up to £500,000 and to 30 September for prices up to £125,000
* [[Inheritance Tax in the United Kingdom|Inheritance tax]] thresholds, pensions life time allowances and annual [[Capital gains tax in the United Kingdom|capital gains tax]] exemptions to be frozen at 2020–2021 levels until 2025–26
It is expected that the measures will cause borrowing to fall to 4.5% of GDP in 2022–23, 3.5% in 2023–24, 2.9% in 2024–2025, and 2.8% in 2025–2026.
* The [[Deficit spending|national debt]] is expected to rise from 88.8% of GDP in 2021 to 93.8% in 2022, 97.1% in 2023–24, 97% in 2024–2025 and 96.8% in 2025–2026
* The [[Office for Budget Responsibility]] has estimated a [[budget deficit]] of £394 billion in 2020–21

=== Business, digital and science ===

* [[Tax break]]s for firms to "unlock" £20 billion worth of business investment
* Firms can deduct investment costs from tax bills, reducing taxable profits by 130%
* Incentives for firms to take on apprentices to rise to £3,000, and £126 million for traineeships
* Lower [[Value-added tax|VAT]] rate for hospitality firms maintained at 5% until September, and an interim 12.5% rate will then apply for the following six months
* Business rates holiday for firms in England to continue until June, followed by a 75% discount
* £5 billion in Restart grants for shops and other businesses in England forced to close
* £6,000 per premises for non-essential outlets due to re-open in April and £18,000 for gyms, personal care providers and other hospitality and leisure businesses
* Visa scheme to help start-ups and rapidly growing tech firms source overseas
* [[Contactless payment|Contactless]] payment limit to rise to £100 from 15 October 2021
* All alcohol duties to be frozen; no [[Alcohol law|extra tax]] on spirits, wine, cider or beer
* [[Hydrocarbon Oil Duty|Fuel duty]] to be frozen for eleventh consecutive year
* [[Tobacco tax|Tobacco duties]] to rise by inflation plus 2%

=== Health ===

* £19 million for [[Domestic violence in the United Kingdom|domestic violence]] programmes and funding network of respite rooms for homeless women
* £40 million funding for victims of 1960s [[Thalidomide scandal]] and lifetime support guarantee
* £10 million to support armed forces [[veteran]]s with mental health needs
*Details released after the speech confirmed allocation of a further £15bn to [[NHS Test and Trace]] for 2021–22<ref>{{Cite web|last=Waugh|first=Paul|date=2021-03-04|title=Test And Trace Spending Will Top £37bn, Budget Small Print Reveals|url=https://www.huffingtonpost.co.uk/entry/test-and-trace-spending-ps37bn-budget-small-print_uk_60412920c5b601179ec35d4a|url-status=live|access-date=2021-03-19|website=HuffPost UK|language=en}}</ref>

=== Arts and sports ===

* £400 million to help re-open arts venues in [[England]], including museums and galleries
* £300 million recovery package for professional sport
** Includes £25 million for grassroots football
* £1.2 million to help stage the [[UEFA Women's Euro 2022|2022 Women's Euros football tournament]] in England

=== Environment, transport, infrastructure and housing ===

* New [[UK Infrastructure Bank]] to be set up in [[Leeds]]
** £12 billion in capital, with aim of funding £40 billion worth of public and private projects
* £15 billion in [[Climate bond|green bonds]], including for retail investors, to help finance the transition to net zero by 2050

=== Nations and regions ===

* £1.2 billion in funding for the [[Scottish Government|Scottish government]], £740 million for the [[Welsh Government|Welsh government]] and £410 million for the [[Northern Ireland Executive|Northern Ireland executive]]
* £1 billion fund to promote regeneration in 45 English towns, including [[Middlesbrough]], [[Preston, Lancashire|Preston]], [[Swindon]], [[Bournemouth]], [[Newark-on-Trent|Newark]], [[West Bromwich]] and [[Ipswich]]<ref>{{Cite news|date=2021-03-03|title=Budget 2021: £1bn Towns Fund for 45 areas of England|language=en-GB|work=BBC News|url=https://www.bbc.com/news/uk-england-56271275|access-date=2021-08-17}}</ref>
* £150 million for community groups to take over pubs at risk of closure
* Eight sites announced for [[Free ports in the United Kingdom|free-ports in England]]: [[East Midlands Airport]], [[Felixstowe]] and [[Harwich]], [[Humber]], [[Liverpool City Region]], [[Plymouth]], [[The Solent|Solent]], [[River Thames|Thames]] and [[Teesside]]

== Reactions ==
[[Leader of the Labour Party (UK)|Labour Party leader]] [[Keir Starmer]] announced that the [[Labour Party (UK)|Labour Party]] will back plans to increase the [[United Kingdom corporation tax|corporation tax]] after Sunak announced any rises would be delayed to 2023; Starmer and [[Shadow Chancellor of the Exchequer]] [[Anneliese Dodds]] had previously voiced strong opposition to tax rises leading up to the budget.<ref name=":2">{{Cite web|date=2021-03-03|title=Budget 2021: Keir Starmer backs delay in raising corporation tax|url=http://www.theguardian.com/uk-news/2021/mar/03/budget-2021-labour-keir-starmer-backs-delay-in-raising-corporation-tax|access-date=2021-03-04|website=The Guardian|language=en}}</ref><ref>{{Cite news|date=2021-03-04|title=Budget 2021: UK's tax burden to 'reach highest levels since 1960s'|language=en-GB|work=BBC News|url=https://www.bbc.com/news/uk-politics-56274711|access-date=2021-03-04}}</ref><ref>{{Cite web|date=2021-03-01|title=Labour indicates it would back gradual rise in corporation tax|url=http://www.theguardian.com/politics/2021/mar/01/labour-indicates-it-would-back-gradual-rise-in-corporation-tax|access-date=2021-03-04|website=The Guardian|language=en}}</ref> However, Starmer has criticised the budget for doing little to address inequality and for prioritizing areas which are represented by [[Conservative Party (UK)|Conservative Party]] [[Member of Parliament (United Kingdom)|MPs]], arguing that the budget failed to "rebuild the foundations of our economy or to secure the country's long-term prosperity".<ref name=":2" /> Former [[Shadow Chancellor of the Exchequer]] [[John McDonnell]] similarly claimed that working people would be hit hard by the freeze to the income tax threshold and the cut to universal credit uplift.<ref name=":2" />

[[Leader of the Liberal Democrats]] [[Ed Davey]] made similar criticisms, particularly in the area of social care.<ref>{{Cite web|date=2021-03-03|title=Spend now, pay later: Sunak flags major tax rises as Covid bill tops|url=http://www.theguardian.com/uk-news/2021/mar/03/businesses-and-middle-earners-will-pay-for-spend-now-pay-later-budget|access-date=2021-03-04|website=The Guardian|language=en}}</ref> [[Green Party of England and Wales|Green Party]] co-leader [[Jonathan Bartley]] has asserted that the budget fails to include new incentives to shift towards a low-carbon economy.<ref>{{Cite news|date=2021-03-03|title=Budget 2021: No 'green revolution' from Sunak|language=en-GB|work=BBC News|url=https://www.bbc.com/news/business-56270528|access-date=2021-03-04}}</ref> Before the budget was announced, Leader of the [[Scottish National Party]] in Westminster [[Ian Blackford]] argued that the budget should not return to [[Austerity in the United Kingdom|austerity]]; he called several measures, including extension of the furlough scheme, long-term investment in the [[National Health Service]].<ref>{{Cite web|last=Blackford|first=Ian|date=2021-03-01|title=The Chancellor cannot row back on our recovery from the pandemic with a return to austerity|url=https://www.snp.org/the-chancellor-cannot-row-back-on-our-recovery-from-the-pandemic-with-a-return-to-austerity/|access-date=2021-03-04|website=Scottish National Party|language=en-US}}</ref>

There has been much discussion over the corporation tax raise. [[Rishi Sunak]] has claimed that even after the reform, the UK's headline rate would still be the lowest in the G7 nations and would raise an extra £17 billion.<ref name=":5" /> However, several commentators and business-persons have suggested that the move could make the UK less attractive to investors and hit dividends; the UK would not look as competitive internationally on other measures because it is much less generous in the share of capital spending that companies are allowed to set against taxable profits.<ref>{{Cite news|title=Investors lambast Sunak's plans to raise corporation tax|url=https://www.ft.com/content/8cea9923-d6b4-4e0b-b423-0497cb5f05d5|url-status=live|access-date=2021-03-05|newspaper=Financial Times|date=4 March 2021 }}</ref> Former Conservative [[Secretary of State for Justice|Justice Secretary]] [[David Gauke]] has advocated in favour of raising income tax rates rather than corporation tax, but noted that the [[Conservative Party (UK)|Conservative Party]]'s manifesto in the [[2019 United Kingdom general election|2019 general election]] promised not to raise income tax, national insurance contributions and VAT.<ref>{{Cite web|last=Gauke|first=David|date=2021-03-02|title=Rishi should raise income tax, not corporation tax|url=https://www.standard.co.uk/comment/rishi-sunak-budget-tax-b921839.html|access-date=2021-03-05|website=www.standard.co.uk|language=en}}</ref> In contrast, former Labour [[Shadow Cabinet|shadow ministers]] [[Ian Lavery]] and [[Jon Trickett]] supported raising corporation tax, arguing that it would hit the profits of big businesses rather than hard-pressed families.<ref name=":6">{{Cite news|date=2021-03-02|title=Sir Keir Starmer's critics in Labour become increasingly vocal|language=en-GB|work=BBC News|url=https://www.bbc.com/news/uk-politics-56246532|access-date=2021-03-05}}</ref> Former Labour [[Shadow Secretary of State for Justice]] [[Richard Burgon]] warned that if the Labour Party does not support a raise in business taxes, it could be "outflanked" by the Conservatives.<ref name=":6" />

Some commentators argued that the freeze in the income tax threshold would effectively increase an individual's tax burden, with the [[Office for Budget Responsibility]] predicting that more than one million people would start paying income tax in the next five years.<ref>{{Cite news|date=2021-03-03|title=Budget 2021: Million more set to pay income tax by 2026|language=en-GB|work=BBC News|url=https://www.bbc.com/news/business-56270941|access-date=2021-03-04}}</ref> Similarly, some health officials voiced opposition to the budget for failing to include detailed plans for the [[National Health Service]] and public services.<ref name=":3">{{Cite web|date=2021-03-03|title=NHS, social care and most vulnerable 'betrayed' by Sunak's budget|url=http://www.theguardian.com/uk-news/2021/mar/03/nhs-social-care-and-most-vulnerable-betrayed-by-sunaks-budget|access-date=2021-03-04|website=The Guardian|language=en}}</ref> Charmaine Griffiths of the [[British Heart Foundation]] warned that the NHS would not be able to tackle the backlog of treatment and care caused by the pandemic as the budget does not pre-empt the possible rise in [[COVID-19]] infections in winter.<ref name=":3" />

Culture industry leaders welcomed the budget, but called for more help for freelancers and insurance cover for events.<ref name=":4">{{Cite news|last1=Arts|first1=Lanre Bakare|last2=correspondent|first2=culture|date=2021-03-03|title=Culture sector cautiously welcomes budget but says further support needed|language=en-GB|work=The Guardian|url=https://www.theguardian.com/uk-news/2021/mar/03/culture-sector-cautiously-welcomes-budget-but-say-further-support-needed|access-date=2021-03-04|issn=0261-3077}}</ref> Julian Bird of the [[Society of London Theatre]] said the extension of furlough, self-employed support, business rates and VAT would help the industry, but urged the government to help those who "fallen through the gaps" of furlough and self-employed support.<ref name=":4" /> [[Cameron Mackintosh]] said that theatre producers would welcome the help given by the government, but called for more detail.<ref name=":4" /> Campaigners related to the [[Thalidomide scandal]] welcomed the support given to survivors.<ref>{{Cite web|date=2021-03-03|title=Thalidomide scandal: Sunak pledges lifetime support for survivors|url=http://www.theguardian.com/uk-news/2021/mar/03/thalidomide-scandal-rishi-sunak-budget-pledges-lifetime-support-survivors|access-date=2021-03-04|website=The Guardian|language=en}}</ref>

== References ==
{{reflist}}

{{United Kingdom budget}}
{{COVID-19 pandemic in the United Kingdom, Crown Dependencies and British Overseas Territories}}{{Rishi Sunak}}
[[Category:United Kingdom budgets|2021 03]]
[[Category:March 2021 events in the United Kingdom|Budget]]
[[Category:2021 in British politics|Budget, 03]]
[[Category:2021 government budgets|United Kingdom, 03]]
[[Category:COVID-19 pandemic in the United Kingdom]]
[[Category:Events postponed due to the COVID-19 pandemic]]
[[Category:Rishi Sunak]]

March 2021 United Kingdom budget - Revision history

Ajay Kumar at 22:09, 23 July 2023