Britain’s chancellor, Rishi Sunak, announced a wide range of measures on Wednesday to support the country’s emergence from the pandemic, including an extension of the government’s wage-support program, billions of pounds in business grants and aid for art institutions and sports clubs.
But Mr. Sunak also said corporate taxes would rise beginning in 2023 and he would freeze personal income tax allowances, a measure that will push more people into higher tax brackets.
A year into the job, Mr. Sunak is trying to use this budget to juggle a number of different goals. In the short term, he is aiming to support jobs as the vaccine rollout continues and the economy cautiously reopens. He announced extensions to emergency support programs that will last through the summer.
But he has been under pressure to signal how he will tackle the budget deficit after spending of more than 400 billion pounds (about $560 billion) over the past year. He has alos faced questions about how he will meet the government’s commitment to “level up” the economy to reduce regional inequality and revitalize the post-Brexit economy.
The pandemic had led to one of the largest and most sustained economic shocks Britain had seen, Mr. Sunak said.
Last year, gross domestic product shrank nearly 10 percent, the worst in three centuries. The independent Office for Budget Responsibility forecasts the British economy will grow 4 percent this year, less than predicted in November, but then increase 7.3 percent in 2022.
The measures announced on Wednesday include:
5 billion pounds ($7 billion) in grants to nearly 700,000 businesses such as shops, restaurants, hairdressers, hotels and gyms;
An extension to September of the furlough program that pays employees 80 percent of their wages for the hours they don’t work (businesses will have to contribute to the program starting in July);
Additional grants for self-employed workers;
£700 million for arts, culture and sports institutions;
An increase starting in 2023 in the corporate tax rate for companies with profits greater than £50,000, from the current rate of 19 percent, and topping out at 25 percent for companies with profits in excess of £250,000;
A “super deduction” on corporate taxes for business investment, which will allow companies to reduce their tax bill by 130 percent of the amount spent on investment.
Apollo Global Management announced Wednesday that it would acquire the crafts retailer Michaels in a deal that valued the company at $5 billion.
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