Sunak lays out fresh budget measures: reaction
Wednesday, March 3, 2021
UPDATED: Chancellor Rishi Sunak was delivering his new budget as Printweek’s daily bulletin went to press, and he confirmed widely trailed plans to extend the furlough scheme until the end of September.
Sunak’s first budget as Chancellor was delivered on 11 March last year, the day before Covid-19 was officially declared a pandemic.
Since then he has announced a variety of measure to try and save jobs and businesses stricken by the effects of the pandemic.
“It’s going to take this country and the whole world a long time to recover from this extraordinary situation,” he said.
He said the economy would bounce back to pre-Covid levels by summer 2022, and the economy was predicted to be 3% smaller in five years’ time that it would have been.
Sunak confirmed that the Job Retention Scheme, or furlough scheme, would be extended until the end of September.
It had previously been extended until the end of April.
There will be no change to employees’ terms, but employers will be “asked to contribute alongside the taxpayer”, he stated.
The business contribution will be 10% in July, and 20% in August and September, Sunak said, with more details to follow.
Sunak also announced a new Recovery Loan Scheme that will run until the end of the year, with amounts available from £25,000 to £10m, and with an 80% government guarantee.
A new 'Super Deduction' will apply to company investments made in the next two years, which Sunak said could "reduce the tax bill by 130% of the cost".
He also announced plans to boost training and apprenticeships in the face of mounting fears about the likelihood of large-scale redundancies.
“Today I am doubling the incentive payments we give businesses to £3,000 – that’s to all new apprentices of any age,” he stated.
The business rates holiday will be extended by three months until the end of June.
He said the total package of government support measures amounted to £407bn, including £65bn of new measures for this year and next.
Corporation tax will go up to 25% in 2023, from 19%, but with a new ‘small profits’ lower rate.
“Yes, it’s a tax rise on company profits, but only on the larger more profitable companies, and only in two years’ time,” he said.
“These are significant decisions, decisions no chancellor wants to take. I recognise they might not be popular, but they are honest,” Sunak stated.
"Today we set out a plan to protect the jobs and livelihoods of the British people. But the promises that underpin that plan remain unchanged from those we pledged ourselves 12 long months ago
"An important moment is upon us. A moment of challenge and change. And yes of difficulties. This is a budget that meets that moment,” he concluded.
Reaction to the budget:
Charles Jarrold, chief executive, BPIF
“Generally it was quite encouraging. The furlough scheme extension was widely leaked and definitely needed. We’ve had feedback, along with other trade associations in the sector, that the data and information the printing industry has been pushing into BEIS has been extremely strong.
“Support for investment is something that is very welcome indeed. The 130% Super Deduction is really encouraging and a strong incentive.
On the back of what’s been a very difficult year for lots of organisations, anything that helps support investment is really welcome – especially Super Deduction. Loss and carry back is going to help a bit too. On the investment side I’m quite encouraged. We need to have a detailed look at it, but the government has recognised that encouraging increased investment is something this country really needs.
“On the skills side it’s also encouraging. More incentives to take on apprentices and the portable scheme is something that sounds interesting – we’ll have a look at the details on that. Support for traineeships is also welcome.
Right now the economy is in a fragile state and this is a budget that clearly recognises that. And that’s very sensible.”
Charles Rogers, vice chairman, IPIA
"The single most important announcement given by the chancellor has been the extension of the Job Retention or Furlough Scheme until September. The IPIA, BAPC – and our fellow associations from across the UK print and allied industries – have made it a core focus to provide BEIS with data from our members businesses. It has shown clearly and consistently that the Furlough Scheme was the single biggest contributor to maintaining supply chain integrity, protecting the livelihoods of tens of thousands and ensuring a sustainable future for the print industry.
“We were heartened to hear today [3 March] from BEIS, which asked us to extend its thanks to the print industry for the sustained efforts from its businesses to work with them.
“In regards to the wider budget announcements, it is clear that the chancellor is facing a challenge that only his war time predecessors have had to come close to dealing with – trying to protect lives, support jobs and livelihoods, while also keeping the economy afloat. All without bankrupting future generations. The Super Deduction Tax Break initiative is very welcome for our industry as it will no doubt assist with capital investments, the hike in Corporation Tax seems a proportionate response to the need to balance the books and get spending as a proportion of GDP under control and the income tax freeze will be welcomed heartily by hard pressed workers across our sector.”
Len McCluskey, general secretary, Unite the Union
“Although still short of the support provided by competitor nations, these extra months of furlough support offer some stability in the rocky months ahead. We’ll keep looking for an extension to 2022 because there is still tremendous uncertainty out there. We also urge the chancellor to do more to repair the economic conditions further by stabilising household incomes.
"In this time of crisis, workers and communities are desperate for action on a scale that meets this enormous moment. Instead Rishi Sunak pulled out a return of freeports – sinkholes, draining decent jobs and wages away from our communities.”
Mike Cherry, national chairman, Federation of Small Businesses (FSB)
“This budget will help many small firms with their final push through to September, but there is little here to aid job creation or help people return to work. Ensuring the newly self-employed can now access support marks a big step forward – we’re pleased our campaign has been heard – but directors, who appear to have been left out yet again, will be incredibly disappointed.
“Thousands of small businesses are on the brink of collapse and thousands more are suffering from low confidence as cash reserves dwindle. They will welcome both the extension of flagship support schemes that have kept them going over the hardest year they have ever faced, as well as confirmation of new support measures around taxation, employment and cash grants.”
ExcludedUK is a campaigning group representing three million people who were not included in the original Covid-19 support measures. This includes some SME printing companies and contractors.
“ExcludedUK welcomes the extension of SEISS… for which we have been campaigning vigorously over the last year. Even with this further support it does not account for this last year of decimated incomes and businesses for those who are now included, for whom this may be too little, too late.
“The majority of those who have been shut out of meaningful support thus far will continue to be excluded from the schemes and so many have been plunged into debt and poverty, often in the hardest hit industries and supply chains. It is also vital to recognise that those individuals excluded from support are not just the self-employed. They are also limited company directors, employees who were denied furlough for a variety of reasons, zero-hour contract workers and PAYE freelancers.”