The British government is to unlock billions of pounds on Wednesday to continue to provide a lifeline to workers and businesses hit hard by the COVID-19 pandemic.
Chancellor of the Exchequer Rishi Sunak will unveil his budget for the year at 13.30 CET and announce an extension to the furlough scheme and a new grant programme to help struggling hospitality and leisure businesses.
The British economy has been ravaged by the COVID-19 pandemic and the measures imposed to curb its spread. Gross Domestic Product (GDP) in the UK shrunk by 9.9 per cent in 2020 — the country”s worst performance in over 300 years.
But the last three months of the year provided a glimmer of hope with the economy growing again — albeit by 1 per cent quarter on quarter. And, despite a third national lockdown being introduced in England in early January, the Bank of England projected last month that GDP should “recover rapidly towards pre-COVID levels over 2021”.
It did warn however that the economic outlook “remains unusually uncertain” and that much depends on the evolution of the pandemic and the measures taken to combat it.
Here is what we know already about the government’s plan to revive the economy.
Furlough scheme extended
The furlough scheme, which covers 80 per cent of workers’ salary, is being extended from the end of July to the end of September.
Sunak will also announce that more than 600,000 people, mostly self-employed, will now become eligible.
According to the government, 11.2 million jobs have been covered by the scheme since the start of the pandemic.
Employers will meanwhile be asked to up their contribution towards the hours their staff do not work to 10 per cent in July and 20 per cent in August and September.
New grants for businesses
The government is to provide an additional £5 billion (€5.8 billion) in grants to firms in retail, hospitality, accommodation, leisure and personal care.
Prime Minister Boris Johnson unveiled the government’s lockdown exit strategy late last month. Under the four-step plan, non-essential retail businesses, as well as restaurants and pubs with outdoor facilities and indoor leisure centres, will reopen on April 12.
Cinemas, theatres, hotels and sporting events will follow a month later. The last few restrictions on nightclubs, funerals and weddings are scheduled to be lifted on June 21.
Support for housing market
Sunak is to announce a mortgage guarantee scheme to help people with small deposits get on the housing ladder.
People wanting to buy a house worth up to £600,000 (€694,000) will need to provide a 5 per cent deposit with the government offering lenders the guarantee they need to provide the remaining 95 per cent.
The government believes the scheme will help to support the housing market and protect jobs and businesses across the housing supply chain, from housebuilders and estate agents, to tradespeople, DIY stores and removal firms.
Booster shot for the COVID-19 vaccine
The budget is also expected to include an additional £1.65 billion (€1.9 billion) for the COVID-19 roll-out.
The government plans for every adult in the UK to have been offered a dose of the vaccine by July 31.
Of that money, £33 million (€38 million) is earmarked to improve vaccine testing capabilities and the ability to respond to new variants and another £22 million (€25.5 million) to fund a world-first UK trial to test if different vaccines can be used together, or if a third dose can be effective.
