Budget 2021: How Sunak Plans to Protect Jobs and Livelihoods

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 Summary

• In his budget allocation, Chancellor Sunak has outlined funding a long range of activities to catalyse the recovery.
• There can be several critical approaches to every budget, but the government has doled a bunch of relaxations and extensions to various schemes without worrying about acute rise deficit.

In order to reinforce job security, Chancellor of the Exchequer Rishi Sunak has announced a bouquet of measures that are designed to safeguard the jobs and livelihoods in the UK. Certainly, with a slew of measures, monetary allocations for multiple ailing sectors, and the funding set aside for expanding the ongoing Covid-19 immunisation programme, the Budget deficit of the country has widened to a record high level.

According to the Office for Budget Responsibility, the government borrowing is set to fall in the fiscal year 2021-22 to £234 billion, 10.3 per cent of the GDP, from an all-time high of £355 billion, 16.9 per cent of the GDP. The continuous recovery on the back of the ongoing vaccination drive is likely to help the economy rebound to the pre-pandemic levels by the middle of 2022, the OBR noted.

The budget deficit is pegged to drop at £107 billion, 4.5 per cent of GDP, in 2022-23 as the fiscal policy shifts to recovery to rescue, while a deficit of £74 billion, 2.8 per cent of GDP, has been estimated in 2025-26, with the policy stance switching on rise in taxes and repair.

Budget 2021 for jobs & livelihoods

1. Sunak has pushed the termination deadlines of several schemes, while outlining the proposals of Budget 2021 to strengthen the workforce and their periodic income.
2. The furlough scheme has been extended to September 2021 across the nation. The upper ceiling on the single contactless payments has been lifted to £100 from the present £45.
3. The temporary cut in the stamp duty has been extended to September 2021 for individuals looking to buy new houses in England and Northern Ireland.
4. The potential homebuyers will now be able to secure a mortgage of up to £600,000 with a 5 per cent deposit under the new mortgage guarantee scheme.
5. The benefit of a VAT cut to 5 per cent for businesses in the hospitality, accommodation and attraction sector has been extended to the end of September 2021 across the UK.
6. Furthermore, the enterprises will be required to pay a VAT at a rate of 12.5 per cent for a further six months till the end of March 2022.
7. With an increased payment of £3,000, the incentives for the apprenticeship hiring have been extended to September 2021 across England.
8. In order to bolster the high-quality work placements and training for fresh school and college graduates between the age group of 16 and 24 years in the academic year 2021-22, the Chancellor has set aside a fund equivalent to £126 million to support 40,000 more traineeships in England.
9. To enable the apprentices to work with several employers in a particular sector, the government has provided funding support of £7 million that has been designed to buttress the new flexi-job apprenticeship programme in England.
10. The government has allocated a multi-billion sum to the tune of £5 billion as the restart grants for sectors including hospitality, leisure, personal care, gym, and accommodation businesses in England with a one-off cash grant of up to £18,000.
11. The government will fund up to two weeks of eligible Statutory Sick Pay costs for the employees who are working with small and medium enterprises across the UK.
12. The government has authorised the banking channels and other financial institutions to facilitate the loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million under the UK-wide Recovery Loan Scheme.
13. The government has extended the consent that allowed businesses to carry forward the losses worth up to £760,000 per company, as per the size of enterprises, to support the cash flow of businesses.
14. In a bid to strengthen the livelihoods of low-income households, the government has extended the Universal Credit uplift of £20 per week for six months.
15. Under the extended framework, the Northern Ireland Executive is entitled to receive additional funding to match the increase in disbursals.
16. Through the Culture Recovery Fund, an additional sum of £300 million has been allocated to support theatres, museums, and other cultural organisations in England, as a part of extension of Film & TV Production Restart scheme in the UK.
17. A similar fund equivalent to £300 million has been set up to support the sports clubs, sports governing bodies and major spectator sports in England as authorities prepare to bring back the fans in the stadiums.
18. To cushion the adverse financial impact of the pandemic on the government-backed national museums in England, the Chancellor has granted a funding of £90 million.
19. Meanwhile, the government has directed a sum of £100 million to amplify the crack-down on fraudsters who have exploited the support schemes extended by the government in the Covid period.
20. In order to maintain adequate social wellbeing, the government has set aside a monetary support of £10 and £19 million to support veterans with mental health requirements across the UK and to tackle the victims of domestic abuse in England and Wales, respectively. For the victims of domestic abuse, the funding will help in expanding the network of ‘Respite Rooms’ that will be held responsible to prevent reoffending and support the homeless women.