British chancellor Rishi Sunak has pledged an additional £410 million for the Stormont executive as he unveiled his Budget today that included measures to aid economic recovery from the Covid-19 crisis.
He set out a £65 billion spending package to be used over the next two years to support the UK economy as it recovers from the pandemic.
Mr Sunak said: "Through the Barnett formula, the decisions I'm taking in this Budget also increase the funding for the devolved administrations, by £1.2b for the Scottish government, £740m for the Welsh government and £410m for the Northern Ireland executive."
Mr Sunak confirmed the furlough scheme will be extended until the end of September, and employees will continue to receive 80% of their salary for hours not worked.
He told MPs: "As businesses reopen, we'll ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July, when we will ask for a small contribution of just 10% and 20% in August and September."
The chancellor also set out plans to freeze income tax thresholds and increase corporation tax from 19% to 25% in 2023.
The hike in corporation tax poses a challenge for the Stormont executive as some businesses in the north have been campaigning for the rate closer to the 12.5% that applies in the Republic.
Other measures in the Budget included:
- Extending the stamp duty holiday from the end of March until the end of June, then a new £250,000 threshold will apply until the end of September.
- Extending the 5% reduced rate of VAT for the tourism and hospitality sector to the end of September, with an interim rate of 12.5% for another six months after that.
- Continuing the business rates holiday for the retail, hospitality and leisure sectors until the end of June, with a two-thirds discount for the remaining nine months of the year.
- Announcing the temporary £20-a-week increase in Universal Credit payments will continue for a further six months.
- Setting out a new Recovery Loan Scheme to replace previous coronavirus loan packages, allowing businesses of any size to apply for loans from £25,000 up to £10 million through to the end of the year, with the Government providing lenders with an 80% guarantee.
- Freezing all alcohol duties for the second year in a row and scrapped a planned increase in fuel duty.
Retail NI Chief Executive Glyn Roberts said: “Overall, this Budget is a bit of a ‘Curate’s egg’ with a mixture of positive and not so positive measures for the business community in Northern Ireland.
“We welcome the extension of the Furlough scheme until the end of September, but with employers expected to contribute 10% which will rise to 20% in the summer, it does reinforce the need for the Executive to clarify the timescale of its ‘strategy’ of lifting restrictions and allowing businesses to reopen.”
