Budget 2021: Rishi Sunak leaves Downing Street

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The Chancellor could have his eyes set on the Conservative Party leadership as he looks to manoeuvre his image with the Budget, Express.co.uk was told. Mr Sunak has announced a range of measures, including raising corporation tax to 25 percent in 2023. This will maintain the UK’s status as having the lowest rate in the G7.

Only businesses with profits over £250,000 will be taxed the new price, meaning “only 10 percent of all companies will pay the full higher rate”.

Steven Fielding, Professor of Political History at the University of Nottingham, told Express.co.uk that while the tax hike flies in the face of years of Conservative fiscal policy, Mr Sunak might be looking forward to his own leadership chances come the 2024 general election.

Referring to concerns from the Labour Party’s Shadow Chancellor, Anneliese Dodds, he said: “She’s made the point that Sunak is only raising corporation tax now so he can cut it closer to the election, so he can be a tax cutting Chancellor, or maybe even a tax cutting leader by that poin

“When Sunak was appointed Chancellor, that was because Boris Johnson wanted to control his predecessor, but Javid didn’t want that.

“Most people thought he was going to be Johnson’s agent, his whipping boy, but that clearly hasn’t worked out.

“There’s going to come a point where he can’t keep spending this money, where people in the Tory party will want him to put the brakes on quickly – that might change his image.

“But he might decide that the politics of it all means that he realises he’s popular and can keep it going.

“Of course, he is seen to be the more stable element of that partnership with Johnson, who has been very damaged by the Covid crisis.

“His emergence has helped Johnson, but the Prime Minister is weakened, and the rise of Sunak doesn’t necessarily help Johnson in the long term, because the Tories might come to think that he is the person to lead them to another election victory.”

According to YouGov polling, Mr Sunak is currently the most popular politician and figure in the UK.

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He has a 44 percent position approval rating – higher than both Mr Johnson and Labour leader Sir Keir Starmer.

While corporation tax has been hiked, the business rates holiday will be extended through to the end of June.

He confirmed that the five percent reduced rate of VAT will also be extended for six months to September 30.

First-time home buyers will get a “Government guarantee” on mortgages, with a deposit of five percent.

An additional £65billion of measures have also been announced to support the economy as the country exits lockdown.

On this, he said: “Taking into account the significant support announced at Spending Review 2020, this means our total Covid support package, this year and next, is £352bn.”

Including measures announced last year, he said it takes, “total fiscal support over this year and next amounts to £407bn.”

The Director at the Institute for Fiscal Studies, tweeted: “Lots and lots more money being spent here on furlough, UC, business support, business rates holiday etc.

“It’s not just 2020-21 which will see huge spending and borrowing.

“Won’t be as big in 2021-22 but will still be very big indeed.”

Other areas affected include income tax, with the threshold for paying the basic rate rising to £12,570 next year.

For higher-rate payers, the threshold will be £50,270: both rates will stay the same until 2026.

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Some announcements were made before the Budget.

The furlough scheme will be extended until the end of September, months after the final restrictions are lifted according to the Government’s roadmap.

Many have questioned why the scheme – which pays 80 percent of employees’ wages for the hours they can’t work during the pandemic – will be pushed further along despite lockdown in theory having already ended.

George Eaton, a New Statesman editor, dispelled the confusion in a tweet yesterday evening, writing: “Sunak right to extend the furlough scheme until the end of September – this will avoid the short-termism that has led to thousands of avoidable job losses during the pandemic.

“Why extend furlough till September if lockdown ends in June? To give the economy time to recover before withdrawing support.

“If fewer companies than expected need the furlough scheme then no harm has been done. High unemployment is the greater risk.

“And because UK unemployment benefit is so much lower than elsewhere in Europe, unemployment creates a bigger demand shock. Furlough is insurance against that.”

Claims have abounded that Mr Sunak might set his eyes on the top job in Westminster post-Covid before this year.

Yet, he has himself dismissed this.

In November, he insisted that he “struggles enough” in his current role.

This was after an Ipsos MORI poll revealed that he was trouncing Mr Johnson across a range of leadership qualities.

But, asked if he’d consider moving into No 10 in an interview with LadBible, he said: “Definitely not.

“I have enough of a struggle just trying to do the job that I have and keep my head above water, quite frankly.”

Mr Sunak’s popularity might grow once again following today.

He will give money to communities to help buy local pubs to run as community-owned businesses.

Public houses have been among some of the worst hit businesses, with millions of litres of alcohol wasted during the crisis.

The arts will gain an injection of cash, an estimated £400million.

Cricket and football will be given a helping hand, as well as a £5billion grant scheme to help struggling high street shops and hospitality firms to reopen after lockdown.

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