Furlough help set to go on till autumn

RISHI Sunak is planning to announce the extension of furlough- style support for businesses hit by Covid until the autumn, The Mail on Sunday has learned.

The Chancellor has told Tory MPs that support for some businesses will need to last beyond the summer, particularly for those that will not open any time soon, such as nightclubs.

The MPs say Mr Sunak will present the furlough as an ‘offset’ to the tax rises.

He will deliver his second Budget on March 3, and is expected to ‘lay down markers’ for future tax rises to start balancing the books. Corporation tax is set to rise from next year from 19 to 24 per cent, in staggered stages. High earners are also likely to be hit.

An announcement is also expected on freeports, including naming the first ‘three or four’, a source said.

The Autumn Budget is expected to be used to announce tax rises to come in from 2022. The Treasury has spent more than £300 billion supporting the economy through the pandemic, with Mr Sunak keen to tell MPs he will balance the books once the Covid crisis is over.

Raising revenue through an online tax, green taxes and property taxes in the long run have been mooted. These will struggle to match the three big revenue raisers – VAT, National Insurance and income tax – although the current consensus in the Government is to keep them ‘off the table’ in line with Boris Johnson’s manifesto pledge.

One insider warned that not increasing one of the ‘big three’ means ‘death by a thousand tax rises’ which ends up angering many different groups.

A Treasury source said: ‘It is not fair to frame the furlough as a sort of figleaf for tax rises.’