Budget 2021: Everything you need to know about Rishi Sunak's Budget

READ MORE: Chancellor Sunak extends furlough scheme 'lifeline' to end of September

He is expected to say that the Coronavirus Job Retention Scheme, which has protected more than 11 million jobs since its inception, will remain in place until the end of September.

The Chancellor’s annual statement is a mixture of economic detail and Westminster tradition.

But what else can be expected from the Chancellor's budget? 

– When is the Budget?

Chancellor of the Exchequer Rishi Sunak's Budget announcement will be today, March 3, at around 12.30pm.

– What is the Budget?

It is an annual statement by the Chancellor to the House of Commons setting out the state of the nation’s finances and the Government’s proposals for changes to taxation.

– Will anything else be announced?

The independent Office for Budget Responsibility will release its economic forecasts on subjects such as growth, inflation and employment for the next few years.

– Will any tax changes happen straight away?

Some measures – usually including changes to taxes on alcohol and tobacco – come into effect on Budget Day or soon after. Others may come in months later.

All have to be approved by Parliament in a Finance Bill, tabled following four days of debate on the Budget.

– Who sees the Budget first?

Apart from the ministers and officials involved in drafting it, the monarch is traditionally the first to see the Budget, granting the Chancellor an audience the day before its release.

The Budget is presented to senior ministers at a special meeting of Cabinet in 10 Downing Street hours before being unveiled to the House of Commons.

– Why is it called a Budget?

The name comes from the old French word “bougette”, meaning little bag. Statements on financial policy used to be brought to the Commons in a leather bag, but now the Chancellor uses a red despatch box.

– What is the famous Red Box?

A wooden box lined with black satin and covered with scarlet leather was made for William Gladstone in around 1860 and was used by successive chancellors for more than 100 years.

Gordon Brown in 1997

James Callaghan broke with tradition by using a new box in 1965 and Gordon Brown did the same in 1997.

George Osborne used the Gladstone box for his first Budget in 2010.

– Is it true the Chancellor can drink alcohol during the Budget speech?

Yes. By tradition, this is the only occasion when a minister can drink alcohol at the despatch box.

Gladstone drank sherry with a beaten egg and Benjamin Disraeli had brandy.

Geoffrey Howe in the 1980s preferred gin and tonic and Kenneth Clarke whisky, but more recent chancellors Gordon Brown, Alistair Darling and George Osborne have all drunk mineral water.

– What are the longest and shortest speeches?

Disraeli’s 1852 statement took five hours, but he had a break. Gladstone spoke continuously for four hours and 45 minutes the following year.

Gladstone spoke continuously for four hours and 45 minutes the following year.

In 1867, Disraeli delivered a Budget speech lasting only 45 minutes. Modern chancellors tend to take around an hour.

– Has anything ever gone wrong?

George Ward Hunt arrived at the Commons on Budget Day in 1869 to find that he had left his speech at home. In 1947, Hugh Dalton was forced to resign after leaking key parts of his statement to a reporter.

Derick Heathcoat-Amory collapsed while delivering the 1960 Budget.

More recently, Nigel Lawson stopped in his tracks after his staff put the pages of his statement in the wrong order.

What else can be expected from Rishi Sunak's Budget?

– Taxes

The Tory manifesto in 2019 promised not to raise the rates of income tax, National Insurance or VAT. But Mr Sunak is reported to be considering a freeze in the thresholds at which people start paying income tax or move into higher brackets – meaning more people would be dragged into those categories as wages increase.

Freezing the £12,500 threshold at which people start paying tax would bring in an estimated £5 billion and freezing the £50,000 threshold where the 40p rate kicks in would bring in £1 billion by 2024-25.

Corporation tax also appears in line for a hike, with Joe Biden’s plan to raise taxes across the Atlantic giving the Government political cover to increase the rate while still maintaining international competitiveness.

Mr Sunak is thought to be considering an increase in the tax on profits from 19p in the pound to between 23p and 25p.

It is also worth keeping an eye on the timing of any tax rises and how they will fit in with the next general election, due in 2024. Could the Chancellor be thinking of increases now, only to have a pre-election giveaway later?

– Economic forecasts

The state of the economy and public finances at the time of the Office for Budget Responsibility forecasts in November were so bad that history books will have to be rewritten.

The 11% drop in gross domestic product (GDP) – a measure of the size and health of the economy – was the worst since the 1709 Great Frost, the £394 billion deficit was a peacetime record and the national debt, at 105% of GDP, was the highest since 1959-60.

But the prospect of lockdown lifting and the success of the vaccine rollout could see a strong bounceback in the growth forecasts.

Boris Johnson said he thinks the recovery “could be much stronger than many of the pessimists have been saying over the last six months or so”.

– Coronavirus measures

The furlough scheme is expected to continue, along with other support for businesses.

Mr Sunak has tried to wean the economy off the eye-wateringly expensive furlough scheme before, only for the worsening pandemic to force a U-turn, so it will be interesting to see how long an extension he grants and whether it becomes less generous as more of the economy reopens.

– Next moves?

Mr Sunak has put his stamp all over crowd-pleasing measures announced since he took office last year, with his own personal logo, flashy videos and an eye for self-promotion on social media.

Unlike predecessors, he will follow his Budget statement with a Downing Street press conference, taking questions from the public and journalists, and on Thursday will appear on The Martin Lewis Money Show Live.

All of which has raised eyebrows at Westminster and seen the Chancellor installed as the 5/2 favourite to be next prime minister by Ladbrokes.

– Labour response

Like all opposition leaders, Sir Keir Starmer has the unenviable task of digesting and responding to the Chancellor’s statement in the Commons immediately after he has finished.

Sir Keir has warned that it is not the time for tax rises on families and businesses – a move which has put him at odds with some of his own MPs, who want to see companies which have profited during the pandemic forced to hand over some of their earnings.