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  • the enormous cost of shoring up the economy because of the pandemic has been spelled out by the chancellor.

  • In today's budget, Mr Stronach revealed a series of measures that will take the UK's overall tax burden to its highest level since the 19 sixties.

  • 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 a week uplift in universal credit.

  • Uh, for the retail, hospitality and leisure sectors.

  • The business rates holiday will continue until June, and there's an extra £65 billion 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 taxes paid by companies on their profits that arise 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 this year alone.

  • We'll be looking at the measures in detail, but we'll start with our political editor, Laura Ginsburg.

  • The virus is clouded everything, making the future hard to see.

  • But the economical art has been flashing red.

  • All the while.

  • Lockdowns cut income, busted the country's bank balance.

  • What are we going to start tapering enough?

  • And the red boxes first job to extend emergency lifelines.

  • But repeatedly, the chancellor had promised us hard truths to 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% 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 extra on universal credit, lower V A T 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% 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 to This is a budget that meets that moment, and I commend it to the House.

  • 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.

  • Soon I was conscious of spreading spending two new Tory constituencies and across the UK to the chancellor stood up today and double down at exactly the same mistake that has been making through this pandemic.

  • Temporary extensions and temporary support could only ever mean a temporary reprieve for those Millions have been crippled by uncertainty for months, the 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 air bags 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 when she soon act today has also, perhaps in contradiction with some of his own instincts ended.

  • Tory dreams of a return to a low tax lien economy anytime 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 gonna be a lot of take Laura.

  • Many thanks again, Laura Ginsburg there with her analysis of the budget 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 extra in for low self employment grants and the massive incentive to get businesses to invest.

  • But significantly higher corporation tax and the freeze on personal tax allowances claws 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% up from now, but far lower than the expected peak of 8% 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 results 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 a pretty bad damage to the public finances and 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 our economic recovery in the short term, but also do so in a way that is fair, the chancellor says.

the enormous cost of shoring up the economy because of the pandemic has been spelled out by the chancellor.

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Chancellor unveils biggest Budget tax rises in decades to fund Covid crisis - BBC News

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    林宜悉 posted on 2021/03/04
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