British finance minister Rishi Sunak unveils his annual budget on Wednesday, promising measures to safeguard businesses and jobs while tackling virus-fuelled debt as England prepares to exit its third lockdown.
Ahead of the budget statement in parliament, Prime Minister Boris Johnson's Conservative government announced late Tuesday that it would extend its furlough scheme paying the bulk of wages for millions of private-sector workers.
News of the multi-billion-pound furlough extension until the end of September, five months longer than planned, boosted share prices of retailers and travel companies trading in London.
"We will continue doing whatever it takes to support the British people and businesses through this moment of crisis," Chancellor of the Exchequer Sunak will say when delivering his budget to parliament from 1230 GMT, according to his department.
He will add that once the economy is "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".
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
The furlough scheme has contributed to soaring government debt, which Sunak may tackle in part by using his budget to announce a rise in corporation tax or a levy on company profits, according to reports.
At 19 percent, Britain's corporation tax rate is the nation's lowest on record and one of the smallest in the Group of 20 bloc of wealthy nations.
The government has cut taxes during the pandemic -- reducing sales tax on food, accommodation and attractions.
It has also lifted the threshold at which stamp duty is due on home purchases, helping property buyers and the construction sector.
Some or all of these measures could be extended in the budget, according to reports.
Cost of virus
Britain is the worst-hit country in Europe with more than 120,000 Covid deaths and four million cases.
But its economic recovery hopes have been boosted by its rapid vaccination programme that has seen millions of adults receive a jab.
The economy shrunk almost 10 percent in 2020 because of the impact of the pandemic, with activity also hampered by turmoil ahead of Britain's eventual exit from the European Union.
Reflecting the problems, UK unemployment has shot up to a five-year high of 5.1 percent.
England's third lockdown will start to be lifted from Monday, with the reopening of schools, followed by non-essential shops and hospitality in the coming months.
Since April 2020, or soon after the UK's first virus lockdown, the government's net borrowing has ballooned by £271 billion ($378 billion, 314 billion euros), according to official data.
The state has pumped out around £280 billion in support packages over the past year to fight the virus fallout, according to the Treasury.
The budget is also expected to confirm the launch of an Infrastructure Bank with £12 billion in capital and £10 billion in government guarantees.The lender will be formed to finance private-sector projects in the green economy, focusing on areas such as carbon capture and renewable energy.