1.35pm: Wrapping up
Rishi Sunak has concluded his statement and Keir Starmer is now addressing the Commons.
The Labour leader said that the UK needed a budget to fix the foundations of the economy but instead it got “a budget that papered over the cracks”, with little attention for social care.
A press conference will follow thereafter.
1.20pm: Focus on green projects
First ever green bank with initial capitalisation of £12bn supporting £40bn of projects, with a focus on offshore wind.
The Treasury also unveiled a new retail savings product to give all UK savers the chance to support green projects, following the launch of the sovereign green bond.
Meanwhile, small and medium sized businesses will be able to get management training through a new set of UK-wide ‘Help to Grow’ schemes.
Small businesses will receive free training for the transition to online operations as well as discounts on software.
To support scientific development, Sunak allocated an extra £1.6bn for the vaccine rollout and future preparedness alongside new visa reforms to attract high-skilled migrants.
The pension industry will be given more flexibility to invest in growth projects and to encourage more companies to list in London.
Sunak also revealed the establishment of freeports, which are special economic zones with rules to make it easier and cheaper to invest.
They benefit from measures such as infrastructure funds to improve transport and tax breaks to encourage activity.
It will be a UK-wide policy but Sunak has listed eight locations in England on Wednesday’s announcement.
They are intended to boost the economy and employment of former industrial hubs.
1.15pm: Only 10% of companies expected to get 25% corporation tax hike
The Chancellor announced two measures in terms of fiscal decisions to ask for help to “those who can afford it”.
The personal threshold for taxes will be frozen until 2026, while the VAT registration threshold will remain at £85,000 until 2024.
The second step will see a 25% increase in corporation tax, which Sunak said will still keep the lowest rate among G7 countries.
It will not take effect until 2023, when economy is expected to have recovered.
It will only charged on profits so who is struggling will not be affected.
Small businesses of profits of £50,000 or less will be charged the lowest rate.
Only businesses with profits of £250mln will be taxed at the full rate, so only 10% of companies will pay the highest tax.
Tax treatment on losses will also be more generous to help with cash flow. Companies will be able to claim additional refunds of up to £760,000.
For companies looking to invest, they can reduce the tax bill by 130% with a ‘super reduction’ which is expected to boost investment by 10% to £20bn per year.
The planned increases in duties of spirits like scotch whiskey wine cider will all be cancelled to help the hospitality industry, while all alcohol duties will be frozen.
The fuel duty is also cancelled, Sunak announced.
1pm: Sunak announces grants, loans and VAT cuts for businesses
Direct cash grants are coming to an end this month, but a ‘restart grant’ will be introduced in April while individual businesses will be able to apply to new loans.
The Treasury has allocated £5bn in new grants for non-essential retailers and the personal care sector, while the arts, culture and sporting sectors will receive £700mln in grants.
Business rates holiday will remain in place until the end of June and then it will be discounted by up to two-thirds based on each company’s economic situation, for a £6bn tax cut for businesses.
In the hospitality sector, the 5% VAT will remain until September 30, rising to 12.5% for another six months and returning to 20% standard rate from April 2022.
Looking at the housing sector, the stamp duty holiday has been extended until June 30, then the cap will remain £250,000 until September, returning to £125,000 from October onwards.
Sunak also unveiled a new policy with government-backed 95% mortgages being offered from this month to support first-home buyers.
Today’s announcement amounts to an extra £75bn measures implemented this year and next, so the total COVID-19 support package is £362bn, for a total of £407bn fiscal help from the government throughout the pandemic.
12.45pm: Businesses to contribute to furlough scheme from July to September
Sunak said that recovery has been “swifter and more sustained” than expected in November.
Economy is forecast to return to pre-covid levels by mid-2022, six months earlier than expected. However, it will be 3% smaller than it would have been in five years’ time.
OBR forecast growth of 4% this year and also said that government interventions to protect jobs have worked.
Furlough scheme to be extended until the end of September with no change of terms for employees.
Businesses will be asked for a 10% contribution in July, rising to 20% in August and September.
Self-employed people will receive grants measured on how much their turnover has fallen. Newly self-employed will also qualify.
The £20-week support for low-income households will continue for another six months and the minimum wage threshold will also be raised.
12.35pm: Rishi Sunak begins the announcement
The Chancellor has begun his announcement in the House of Commons.
He said the government will do “whatever it takes” to support the country.
11.50am: Furlough to be extended until September
It is understood that Rishi Sunak will extend the furlough scheme until the end of September, way beyond the end of all lockdown measures earmarked for June 21.
It is a surprising move as recent media reports suggested June would be the end of the scheme, where the government covers 80% of staff salaries to avoid redundancies.
The Chancellor is expected to allocate £10bn for the renewed furlough scheme, as part of measures worth at least £30bn designed to protect jobs.
An extra 600,000 newly self-employed workers will also become eligible to receive financial support.
Hospitality, travel and leisure names, which have relied heavily on such schemes to keep people into work, were among the FTSE 350 risers on Wednesday late morning.
Cineworld Group PLC (LON:CINE) jumped 8% to 112.42p, while International Consolidated Airlines Group SA (LON:IAG), Whitbread PLC (LON:WTB) and J D Wetherspoon PLC (LON:JDW) were up 5% to 213p, 3,576p and 1,302p respectively.
10.30am: Rishi Sunak to start speaking at 12.30pm
Chancellor Rishi Sunak is set to deliver the Budget 2021 nearly a year after Britain entered lockdown.
It is one of the most hotly anticipated ever as people across the country need support to make it through the pandemic.
Sunak will begin his announcement in the House of Commons after Prime Minister’s Questions, at around 12.30pm.
The statement will be followed by a Downing Street press conference, while Sunak will be interviewed at The Martin Lewis Money Show Live on Thursday.
The Treasury is expected to unveil measures that should be welcomed across the board, including a £15bn support package to extend the furlough scheme and Self-Employment Income Support scheme.
There will be sector-specific measures such as VAT cuts and business rates holidays for hospitality players, while housebuilders will be boosted by initiatives to support first-home buyers, such as a more generous ‘Help to Buy’ scheme.
Corporation tax is earmarked to be raised from 19p in the pound to 25p over the course of the parliament while the world’s first sovereign green savings bond will be established.