UK unveils three-point plan in Budget 2021 to set path for economic recovery

People commute along Westminster Bridge in London, Britain, Feb. 17, 2021. (Xinhua/Han Yan)

LONDON, March 3 (Xinhua) -- British Chancellor of the Exchequer Rishi Sunak on Wednesday announced a three-point plan in Budget 2021 to offer support for jobs and businesses amid the COVID-19 pandemic while setting a path for the economy to rebound.

Delivering the Budget in the House of Commons (lower house of the British parliament), Sunak unveiled a package of measures such as extending a couple of supporting schemes, strengthening public finances and highlighting investment-led recovery, among others, as Britain is striving to the revive its pandemic-hit economy.

The economic recovery will be "swifter and more sustained" than thought, Sunak said. But he said that recovery "will take time", adding he will do "whatever it takes" to support people and business.

"First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis," said Sunak.

The immediate priority "continues to be supporting those hardest hit, with extensions to furlough, self-employed support, business grants, loans and VAT (value-added tax) cuts -- bringing total fiscal support to over 407 billion pounds" (about 568 billion U.S. dollars), said the British Treasury in a statement.

The chancellor confirmed furlough scheme will be extended until the end of September, with the British government paying 80 percent of salary, though employers will be asked to put in 10 percent from July and 20 percent from August.

Help for the self-employed will also be extended with changes meaning 600,000 more people will be eligible, said Sunak, adding that the temporary increase of 20 pounds (about 27.9 dollars) a week in universal credit will continue for a further six months.

"Second, once we are on the way to recovery, we will need to begin fixing the public finances -- and I want to be honest today about our plans to do that," said the chancellor.

Forecasts show government borrowing is reaching 355 billion pounds (about 495.4 billion dollars) in 2020/21, 17 percent of the national income, the highest level since the Second World War. For 2021-22 it will climb to 234 billion pounds (about 326.6 billion dollars), 10.3 percent of GDP, as debt is set to peak at 97.1 percent of GDP in 2023-24, according to Sky News.

Sunak noted that public finances should be back on track. And to raise revenue while maintaining an internationally competitive tax system, the rate of Corporation Tax will climb to 25 percent which won't take effect until April 2023.

Around 70 percent of companies -- with profits of 50,000 pounds (about 69,778.8 dollars) or less -- will still only be liable for the current 19 percent rate, while only those with profits of 250,000 pounds (about 348,894 dollars) or more will pay the full 25 percent, said Sunak.

"Third, in today's Budget we begin the work of building our future economy," said Sunak, unveiling an array of new English freeports to enhance investment, stimulate innovation and cut costs.

Meanwhile, Sunak said the British economy is expected to grow by 4 percent in 2021, based on forecast by the British Office of Budget Responsibility (OBR), an executive non-departmental public body giving independent and authoritative analysis of Britain's public finances.

However, the leader of opposition Labour Party, Keir Starmer, called it a Budget that "papers over the cracks" with no rebuilding of the "shattered" economy.

He said that there is no plan to "fix" social care or the National Health Service (NHS), or to address inequality.

Meanwhile, Sammy Wilson, a British lawmaker from the Democratic Unionist Party, said that he's "disappointed" that Sunak has not used his Budget to seize an "opportunity" to raise taxes without hurting businesses and individuals in Britain.

Wilson said that Brexit has given Britain a chance to tackle firms which have been "avoiding taxes wholesale".

The chancellor "needs to take" these opportunities by announcing new policies to crack down on the "Amazons and the Googles who use the Irish Republic as a place where they can take all their profits to.... and then avoid our taxes", Wilson added.

According to Sunak, the British government will spend additional 65 billion pounds (about 90.7 billion dollars) in response to the COVID-19 pandemic. About 1.6 billion pounds (about 2.2 billion dollars) will be used to continue the vaccine rollout and improving future preparedness.

British Prime Minister Boris Johnson announced earlier a four-phase "roadmap" to ease the current coronavirus lockdown.

Currently, England is under the third national lockdown since the outbreak of the pandemic in the country. Similar restriction measures are also in place in Scotland, Wales and Northern Ireland.

To bring life back to normal, countries such as Britain, China, Germany, Russia and the United States have been racing against time to roll out coronavirus vaccines.