2021 United Kingdom budget

The March 2021 United Kingdom budget, officially known as Protecting the Jobs and Livelihoods of the British People was a budget delivered by David Gauke, the Chancellor of the Exchequer in March 2021. It succeeds the budget held in March 2020. The budget was the second under George Osborne's government, and also the second to be delivered by Gauke.

It was confirmed on the previous day that the Coronavirus Job Retention Scheme and the Self Employment Income Support Scheme had been extended to 30 July 2021.

Key measures
In his budget speech, Gauke emphasized the effect the COVID-19 pandemic has had on the economy, with 700,000 people losing their jobs, the economy shrinking by 6% (the largest fall in 90 years), and unemployment rising from a low of 3.7% in 2019 to 6.9% by the time of the budget, expected to peak at 7.6% in June before falling rapidly back to around 4% by 2022. Nonetheless, the Chancellor noted that "public finances [had] displayed remarkable resilience" with the deficit peaking at only 7% of GDP, well below many advanced countries, and below what it was during the financial crisis.

The Office for Budget Responsibility has estimated a budget deficit of £156 billion in 2020–21. Borrowing will fall from 5.4% of GDP in 2021-22, to 1.8% of GDP in 2022–23, 0.3% in 2023–24, followed by a surplus of 0.4% of GDP in 2024–2025, and 0.8% in 2025–2026.

Measures in the budget include:

COVID-19

 * Extension of the Coronavirus Job Retention Scheme and Self Employment Income Support Scheme until the end of July
 * £2.25 billion injection into the COVID-19 vaccine roll-out in England
 * £20 million to increase the UK's capacity for vaccine testing, clinical trials and improve the UK's ability to acquire samples of new variants of SARS-CoV-2
 * £12 million to test the effectiveness of combinations of different COVID-19 vaccines
 * An extra £3 million investment in clinical-scale mRNA manufacturing

Taxation

 * No changes to rates of income tax, national insurance contributions, or value-added tax, in line with the Conservative manifesto commitment in the 2015 general election.
 * Corporation tax lowered to 12.5% from April 2021.
 * Tax-free personal allowance raised by 2% plus inflation to £8,603 from 6 April 2021.
 * Stamp Duty holiday on house purchases in England and Northern Ireland extended to 30 June 2021 for purchases up to £1,500,000 and to 30 September for prices up to £1,250,000.
 * Inheritance tax thresholds simplified to a single £1,000,000 threshold for both married couples and individuals.
 * After the 2020 budget, the Office for Tax Simplification launched a consultation into simplifying the income tax system to a flat rate. In the new budget, Gauke reported that the OTS had recommended a flat rate of 22 pence in the pound, with a personal allowance of £12,000. The Chancellor said that the government "would look into" implementing the plans in the medium-term.

Business, digital and science

 * Tax breaks for firms to "unlock" £20 billion worth of business investment
 * Incentives for firms to take on apprentices to rise to £3,000, and £126 million for traineeships
 * Lower VAT rate for hospitality firms maintained at 5% until September, and an interim 12.5% rate will then apply for the following six months
 * Business rates holiday for firms in England to continue until June, followed by a 75% discount
 * Visa scheme to help start-ups and rapidly growing tech firms source overseas
 * Contactless payment limit to rise to £100 from 15 October 2021
 * All alcohol duties to be frozen; no extra tax on spirits, wine, cider or beer
 * Fuel duty to be frozen for eleventh consecutive year
 * Tobacco duties to rise by inflation plus 2%

Health

 * £4 million for domestic violence programmes and funding network of respite rooms for homeless women
 * £10 million funding for victims of 1960s Thalidomide scandal and lifetime support guarantee
 * £5 million to support armed forces veterans with mental health needs
 * Details released after the speech confirmed allocation of a further £2bn to NHS Test and Trace for 2021–22

Welfare

 * The post-tax deduction taper rate for Universal Credit was cut from 60% to 55%.
 * The so-called 'double lock' on state pensions was maintained.
 * The lifetime allowance on pension contributions was to be frozen until 2024-25.

Reactions
Labour Party leader Jeremy Corbyn lambasted the budget for cutting corporation tax and raising of the 40p income tax threshold, which were seen to benefit the richest the most. Speaking in response to the budget speech in the House of Commons, Corbyn said: "At a time when the country is grappling with the worst public health crisis in a century, the government's decision to prioritize the interests of the wealthiest through cutting corporation and income tax, over those of the people is a betrayal of our country's values."

Shadow Chancellor John McDonnell also criticised the budget for doing little to address inequality and accused the Chancellor of prioritising voter blocs which are typically loyal to the Conservative Party, and argued that the budget would weaken to "the foundations of our economy and exacerbate already dire inequality".

Leader of the Liberal Democrats Vince Cable made similar criticisms, particularly in with regards to the raising of the top income tax threshold. Green Party co-leader Jonathan Bartley has asserted that the budget fails to include new incentives to shift towards a low-carbon economy. Before the budget was announced, Leader of the Scottish National Party in Westminster Ian Blackford argued that the budget should not bring about a return to austerity; he called several measures, including extension of the furlough scheme, long-term investment in the National Health Service, and reversal of cuts to welfare.

Former Secretary of State for Work and Pensions Iain Duncan Smith welcomed the cut in the Universal Credit taper rate, saying it would "leave low hours workers with more money, helping accelerate them into full-time work and off benefits", and claimed that this would in turn reduce the total amount of money spent on the benefit, as people move on into work and start to pay tax.

Some commentators noted that while the income tax personal allowance had risen by 33% since 2010, the top rate of income tax threshold had risen by 212%, and the Resolution Foundation claimed in its post-budget assessment that it such a policy has likely worsened inequality in the UK substantially. Similarly, some health officials voiced opposition to the budget for failing to include detailed plans for the National Health Service and public services. Charmaine Griffiths of the British Heart Foundation warned that the NHS would not be able to tackle the backlog of treatment and care caused by the pandemic as the budget does not pre-empt the possible rise in COVID-19 infections in winter.