Budget 2021: key points at a glance

Rishi Sunak has delivered his budget - here are the main points, with political analysis

• Sunak flags tax rises as total Covid spending tops 400bn
• Analysis: Sunak digs in for battle against financial cost of Covid

The chancellor says he would do whatever it takes" during the pandemic, and that he has done and will continue to do so. He says there has been acute damage to the economy, with more than 700,000 people losing their jobs, the economy shrinking by 10% - the largest fall in 300 years, and borrowing is highest it has been outside of wartime. It's going to take this country, and the whole world, a long time to recover from this extraordinary situation," he says.

The chancellor says the economy will recover more quickly from the pandemic than previously thought, with the economy returning to its pre-pandemic size six months earlier, by the middle of next year.

He says that in five years' time the economy will still be 3% smaller than it otherwise would have been without Covid.

GDP will grow by 4% this year, according to official forecasts made by the Office for Budget Responsibility (OBR).

GDP will grow by 7.3% next year.

In November, the OBR said its central scenario" was for GDP growth of 5.5% in 2021.

It comes after the economy shrank by 9.9% in 2020, the biggest fall since 1709

The chancellor says unemployment will peak at 6.5%, down from a forecasted peak of 11.9% last July. That means 1.8 million fewer people are expected to be out of work than previously thought, he says.

Sunak confirms the extension of the furlough scheme until the end of September, as previously announced late on Tuesday.

Employees will continue to receive 80% of their wages until the scheme ends, but firms will be asked to contribute 10% in July and 20% in August and September as the scheme is gradually phased out.

Sunak also confirms the self-employment income support scheme has also been extended. The fourth grant will cover February to April, worth 80% of average trading profits up to 7,500.

The 20-a-week increase in universal credit is extended for six months.

The chancellor confirms the 5bn restart grant for businesses to help companies get going after lockdown.

He says total direct cash support to businesses has reached 25bn.

As the government-backed bounce back loan (BBL) and coronavirus business interruption loan scheme (CBILS) come to an end, the Treasury is launching a new loan scheme to run until the end of the year. Loans can be between 25,000 and 10m.

Hospitality and leisure businesses pay no business rates for three months, then rates will be discounted for the remaining nine months of the year by two-thirds, in a 6bn tax cut.

5% reduced rate of VAT will be extended until the end of September. Then it will be gradually increased, at 12.5% for six months, before returning to the standard rate from April 2022. Sunak says this is a cut worth 5bn.

Sunak announces the stamp duty holiday will be extended.

As expected, stamp duty holiday on properties up to 500,000 continues until the end of June. It will be kept at double its standard level until the end of September, and then return to usual levels from 1 October.

The chancellor confirms a mortgage guarantee to help first-time buyers access 95% mortgages.

Total Covid support package this year and next is 352bn, the chancellor says.

Sunak says the response to the pandemic has been one of the largest and most sustained the country has ever seen.

Sunak says the budget deficit will be 355bn this year, or 17% of GDP - the highest level in peacetime.

He says that without corrective action, borrowing would continue at very high levels, leaving underlying debt rising indefinitely.

Because of the actions he is taking, he says borrowing will fall to 4.5% of GDP in 2022-23, then to 3.5% in 2023-24, then 2.9 and 2.8% in the following two years.

The national debt - the sum total of every budget deficit - will rise from 88.8% of GDP this year to 93.8% next year, it will peak at 97.1% in 2023-24, before stabilising and falling slightly to 97% and 96.8% in the final two years of the forecast.

In November, the OBR estimated a budget deficit - the gap between spending and receipts - of 394bn for 2020-21.

The chancellor says this matters because the amount borrowed is only comparable to the two world wars. It's going to be the work of many governments over many decades to pay it back, just as it would be irresponsible to withdraw support too soon, it would also be irresponsible to allow our future borrowing and debt to rise unchecked," he says.

The chancellor says the government will take a fair" approach to fixing the public finances".

The government will not raise national insurance, income tax or VAT, but will freeze personal tax thresholds - as anticipated.

The personal allowance will remain at 12,750 until 2026. The higher-rate threshold will increase to 50,270 next year, and also remain at that level.

The inheritance tax threshold, pensions lifetime allowance, annual exempt allowance from capital gains tax and VAT exemption threshold will also be frozen.

In April 2023, the rate of corporation tax will increase to 25%. Sunak says this will be the lowest rate in the G7.

Sunak says businesses will only be impacted if they are making profits, and the change will only come in once the OBR forecasts the economy will be recovering.

The rate will be tapered so that only businesses with profits of more than 250,000 will be taxed at the full 25% rate; that means only 10% of companies will pay the full higher rate. Companies with profits of less than 50,000 will remain at 19%.

It's a tax rise on company profits, but only on the larger more profitable companies, and only in two years' time," Sunak says.

The government is investing 25bn by allowing a 130% super-deduction on tax for investments made by companies. This means firms can cut their taxes by up to 25p for every pound they invest.

Alcohol duties will be frozen for the second year in a row.

Fuel duty will also be frozen.

The chancellor announces the new national infrastructure bank will open in Leeds with 12bn capitalisation from the government.

Green projects will be supported through a green recovery bond.

The chancellor says the Treasury will reform the Bank of England's mandate to include targeting net zero emissions, in addition to the existing 2% inflation target.

The chancellor confirms the Treasury will establish an economic campus in Darlington, alongside the business, international trade, and housing and communities departments among others.

Sunak announces more than 1bn funding for 45 new town deals" across the UK.

Freeports - special economic zones with different rules to make it easier and cheaper to do business - will be launched. They will include infrastructure planning, customs and favourable duties and taxes.

Sunak announces eight locations in England: East Midlands airport, Felixstowe and Harwich, Humber, Liverpool city region, Plymouth, Solent, Thames and Teesside.