United Kingdom: government unveils first post-Brexit budget focused on recovery
Chancellor of the Exchequer Rishi Sunak unveils the 2021 budget in front of the House of Commons on March 3, 2021. AFP - -
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The budget presented this Wednesday March 3 by the Chancellor of the Exchequer Rishi Sunak for the United Kingdom provides for the continuation of massive aid to employment and businesses, but also the prospect of tax increases for large companies.
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Rishi Sunak commits to it: the British government "
has done and will do whatever is necessary
" to help people and businesses get through the crisis caused by the coronavirus epidemic.
European country with the worst health record with some 123,000 deaths attributed to the virus, the United Kingdom is also the developed country that has suffered the biggest economic shock.
Its GDP plunged 9.9% in 2020, the worst drop in 300 years.
Despite 280 billion pounds (323 billion euros) of aid to protect jobs and businesses in the face of the impact of the pandemic, "
the damage to our economy has been acute,
" Rishi Sunak acknowledged on Wednesday before the Communal room.
►
See also: Brexit: finance companies are leaving London for Dublin
Partial unemployment maintained until the end of September
The Minister of Finance has therefore announced an extension until the end of September of the partial unemployment system, thanks to which the government covers up to 80% of wages up to 2,500 pounds per month.
An equivalent system is foreseen for self-employed workers.
Employers will be called upon to contribute from July when the government will reduce its subsidy to 70% of wages then 60% from August.
New business loans are also planned as well as more than 700 million pounds to help cultural and sports businesses.
Direct aid of several thousand pounds is also being prepared for the sectors hardest hit by the pandemic, such as restaurants, shops or pubs, which will also benefit from a freeze on alcohol taxes.
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To read also: Covid-19 in the United Kingdom: Boris Johnson hopes for a return to normal by the end of June
The British government will also maintain for a few months a suspension of the tax on property transactions, which has fueled a mini boom in home purchases.
In total, the budget includes announcements of new aid measures amounting to £ 65 billion for this year and next.
A first tax hike
By the end of the next fiscal year, the government will have injected a total of 407 billion pounds to keep the economy on drip, and borrowed 355 billion pounds, a record since World War II, the Chancellor of the Exchequer said. .
Rishi Sunak therefore warned: “
Once we are on the road to recovery, we will have to start restoring public finances.
"
This pro-Brexit conservative and concerned about budgetary orthodoxy has already announced a first tax hike: corporate tax will rise to 25% by 2023, against 19% currently.
To reassure the business community, he was quick to add that even with this increase, the United Kingdom would keep the level of tax for companies "
the lowest in the G7
".
This increase will not affect small businesses, however, he argued, also announcing a tax deduction for companies when they invest.
This year, the United Kingdom's economy is expected to grow by 4% according to forecasts by the public body OBR which still expected an increase of 5.5% in November, before the new containment.
But the economy should return to its pre-pandemic level in mid-2022, against the end of 2022 expected until then, thanks to the acceleration of growth to 7.3% next year.
(With AFP)
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