Budget 2021: Rishi Sunak announces 25% corporation tax rise
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The Prime Minister has been accused of being overly cautious in his four-month plan to end coronavirus restrictions once and for all. Mr Johnson is now facing a new battle to keep his own MPs onside after Rishi Sunak unveiled his Budget in the Commons yesterday.
With a record £355billon borrowed over the past financial year, and a further £234billion expected to be borrowed over the next 12 months, the Chancellor has warned of tax rises ahead.
Corporation tax is set to be hiked up to 25 percent from 2023, and a stealth tax on income has been introduced with income thresholds frozen until 2026.
It is hoped the new measures will bring in £26billion by 2025.
Pushing for restrictions to end early to keep the debt down, Tory MP Desmond Swayne told Express.co.uk: “The fact is lockdown is costing over a £1billion a day.
“The reality is that the Prime Minister said it would be data-driven in one direction in that he’s announced the ‘not before dates’ and those dates can be pushed back by bad data, but good data can’t bring them forward.”
New data indicates coronavirus cases, hospitalisations and deaths are dropping faster than modelling predicted from the Government.
The research suggests ministers could end restrictions weeks earlier than planned.
Mr Johnson has ruled out such a measure saying it is important to remain cautious in order to ensure this lockdown is the last.
But former Tory leader Iain Duncan Smith has said the sheer level of debt the country has racked up over the past year means restrictions must end early.
“The real problem looming over everything is that we are not yet out of the Covid crisis, which has severely curtailed the Chancellor’s options,” he wrote in The Telegraph.
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“This is why I hope the Government reviews its over-cautious opening of the economy.
“Having made possibly the boldest decisions in the world on vaccine purchase and roll out, we must try and take advantage of that and get our economy going ahead of other countries, many of whom are in a mess.
“The earlier our economy opens up, the lower our deficit will be and the less pain will have to be visited on taxpayers by the Chancellor.”
He added: “Explaining the need for tax rises, the Chancellor rightly spoke of low inflation coming to an end and warned of the dangers if the cost of borrowing were to rise.
“Yet there are ways to offset that now, rather than tax rises.
“It remains a puzzle to me that the Treasury refuses to countenance issuing much longer term debt – these are known as perpetuities, which would lock in low rates and remove that danger”.
In the past 24 hours, 242 new coronavirus fatalities have been announced, with the seven-day average death rate dropping 33.6 percent over the past week.
Dropping at a similar rate of 34.4 percent over the last seven days, 6,573 new cases have been recorded.
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