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The European Union said Wednesday that Britain s “unilateral action” on trade rules will breach international law and is threatening legal action as post-Brexit tensions continue to escalate between the two sides.Commission vice-president Maroš Šefčovič said in a statement that UK’s decision to unilaterally extend a grace period on checks for goods moving between Britain and Northern Ireland amounts to “a violation” of the so-called Northern Ireland Protocol. The Protocol was designed to ensure an open border between Northern Ireland and the Irish Republic after Brexit.“This is the second time that the UK government is set to breach international law,” Šefčovič said. “This also constitutes a clear departure from the constructive approach that has prevailed up until now.”The EU s anger was sparked by the British government’s decision to extend until October a grace period for checks on agri-food entering Northern Ireland that was set to expire at the end of the month.In September last year, the UK had already upset the 27-nation bloc when it considered — then backpedaled — legislation that would have given Boris Johnson’s government the power to override part of the Brexit withdrawal agreement relating to Northern Ireland. The sensitivity of Northern Ireland’s status was underscored earlier this year when the EU threatened to ban shipments of coronavirus vaccines to Northern Ireland as part of moves to shore up the bloc’s supply. That would have drawn a hard border on the island of Ireland – exactly the scenario the Brexit deal was crafted to avoid.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayŠefčovič held discussions Wednesday with cabinet minister David Frost, the former chief Brexit negotiator now responsible for EU relations. “Lord Frost explained that the measures announced today, following official-level notification to the Commission earlier this week, were temporary technical steps, which largely continued measures already in place, to provide more time for businesses such as supermarkets and parcel operators to adapt to and implement the new requirements in the Protocol,” a UK government spokesperson said. Before their talks, Šefčovič said he would tell Frost “the European Commission will respond to these developments in accordance with the legal means established by the Withdrawal Agreement and the Trade and Cooperation Agreement.” More

The chancellor, Rishi Sunak, obviously has a flair for publicity and the right phrase – and he is fond of reminding us that during his first Budget last year he said that he “would do whatever it takes” to support the economy during the Covid-19 pandemic. He did so again during this latest Budget. Mostly, he has lived up to it, though there remain important gaps in the web of measures that have sprouted since last spring and the first lockdown. The result has been that Mr Sunak has plonked himself firmly in the record books – with the national debt now sitting at more than £2 trillion, the highest in about six decades, and £407bn set to be spent dealing with the effects of the Covid crisis. Had he not done so, however, the 10 per cent drop in national income, the steepest in 300 years, would have been even sharper, and the severe recession would have turned into a protracted slump. So when the chancellor says he has done whatever it takes, he has also had little real choice in the matter, economically or politically. He should continue to do whatever it takes, and he should also have made a virtue of necessity by pledging to continue the central support schemes, particularly those protecting jobs, for as long as the public health crisis continues, rather than by setting down decisive dates. More

Rishi Sunak has been accused of “naked pork-barrel politics” after billions of pounds of Budget handouts appeared to favour Tory-held constituencies.At a Downing Street press conference, the chancellor was asked why 40 of 45 places receiving £1bn of towns fund grants are represented by his own party’s MPs.Meanwhile, the leafy Richmondshire borough – which falls within Mr Sunak’s north Yorkshire seat – has been given higher priority for a new £4.8bn “levelling up fund” than struggling Barnsley.Mr Sunak was asked to reassure the public that he was using “fair criteria” to assess eligibility – or “whether this looks a little bit like naked pork-barrel politics”.In reply, he insisted decisions were made “based on an index of economic need which is transparently published”. The cabinet minister later admitted the decision was made by Jake Berry, a fellow minister – while he approved a grant to Mr Berry’s constituency. Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayIn this Budget, 45 towns have shared a further £1bn of grants, of which only five are in opposition-held seats, an analysis by The Financial Times found.Meanwhile, the £4.8bn levelling up fund will “support town centre and high street regeneration, local transport projects, and cultural and heritage assets”.Labour protested that four other authorities in the seats of cabinet members – Newark and Sherwood (Mr Jenrick), Pembrokeshire (Simon Hart), Dumfries and Galloway (Alister Jack) and Great Yarmouth (Brandon Lewis) – had top priority.Yet the much-poorer Barnsley, Flintshire, Coventry, Plymouth, Salford and the Wirral had all been relegated to the second tier for priority.The government was “diverting the money to serve their own party’s needs,” alleged Steve Reed, the shadow local government secretary.“Just months after the government was criticised for diverting funding away from towns that desperately needed it, we discover that cabinet ministers’ own constituencies now stand to benefit ahead of more deprived areas,” he said. Challenged at the press conference, Mr Sunak said: “The formula for grant payments for the new fund, to give them some capacity funding to bid for projects, is based on an index of economic need which is transparently published.”He said it was “based on a bunch of objective measures so that will be there for people to have a look at”.The chancellor added: “Remember, that’s only the areas that have received some capacity funding to bid.“No area is excluded for bidding – it’d just that those areas, on the basis of this formula, might need a bit of extra help, so we’re giving those local areas some money to put their bid together to help them.” More

Rishi Sunak’s Budget speech paid a lot of attention to support for the economy during the pandemic, to changes to company tax and the national debt, but for most of us there is one immediate question: how will it affect my finances?Whether you are looking to buy a house – and so will benefit from the three-month extension of the stamp duty holiday – or rely on minimum wage, which will rise by £350 a year for full-time workers in April to £8.91 per hour, the economic changes today will be felt by many. Not forgetting a string of other influential policies the chancellor outlined earlier including the extension of furlough until September, duties on alcohol and fuel being frozen, a six-month extension on the £20 weekly increase to universal credit payments, VAT cuts for the hospitality and tourism sectors to remain, and £5bn worth of “restart grants” to be made available from April to help businesses reopen after lockdown restrictions ends. It was also revealed that, for the first time since 1974, the rate companies pay on their profits will rise from 19 to 25 per cent in 2023 – the higher rate still leaves the UK with the lowest corporation taxes in the G7.Clearly, there is a lot to consider. But the online calculator below, created by accountants Blick Rothenberg, offers a quick reckoner as to how the latest raft of changes will affect you, broadly speaking.Input a few details and it will offer an indication as to how much better or worse you will be following the chancellor’s announcements.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekday More

The stamp duty holiday for housebuyers is being extended for a further three months until the end of June, Rishi Sunak announced.Purchases up to £500,000 will continue to be free from the tax – and homes bought up to a value of £250,000 until the end of September. The Chancellor also confirmed a new scheme to provide mortgages to homebuyers who put forward only a 5 per cent deposit, with a government guarantee.“A policy that gives people who can’t afford a big deposit the chance to buy their own home,” he told MPs. “As the prime minister has said, we want to turn generation rent into generation buy.”The stamp duty cut is hugely expensive – the three-month extension costing an estimated £1bn, at a time when the government is slashing overseas aid and, in October, Universal Credit.But the property market was worried about around 160,000 home sales stuck in limbo and at risk of falling through if the holiday was not extended. Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayMr Sunak told MPs: “I can announce today the £500,000 nil rate band will not end on 31 March, it will end on 30 June.“Then, to smooth the transition back to normal, the nil rate band will be £250,000, double its standard level, until the end of September – and we will only return to the usual level of £125,000 from 1 October.”And on the “mortgage guarantee”, the Chancellor said: “Lenders who provide mortgages to homebuyers who can only afford a 5 per cent deposit will benefit from a government guarantee on those mortgages.“I’m pleased to say that several of the country’s largest lenders including Lloyds, NatWest, Santander, Barclays and HSBC will be offering these 95 per cent mortgages from next month, and I know more, including Virgin Money, will follow shortly after.”Mr Sunak also* Confirmed the extension of the furlough scheme until the end of September, although employers will be expected to make a contribution from July.* Extended the 5 per cent reduced rate of VAT for the tourism and hospitality sector to the end of September, with an interim rate of 12.5 per cent for another six months after that.* Continued 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.The Chancellor also unveiled forecasts suggesting the economy will return to its pre-Covid level by the middle of next year – six months earlier than they previously thought.But he told MPs that, despite the £280bn of support already committed to protecting the economy, the damage done by the virus has been “acute””.“Our economy has shrunk by 10 per cent – the largest fall in over 300 years. Our borrowing is the 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 economic situation. But we will recover.” More

Rishi Sunak announced a further raft of tax and spending measures in the Budget on Wednesday. What are the key points that will affect the economy, businesses and households’ personal finances? Jobs and the economyThe Office for Budget Responsibility expects the economy to reach its pre-Covid level by the middle of next year –  six months earlier than thought.However, it also forecasts that the economy will be 3 per cent smaller in five years than it would have been if the pandemic hadn’t happened.More than 700,000 people have lost their jobs since March 2020 and the economy went through its worst contraction in more than 300 years. The arrival of vaccines has allowed the OBR to slash its forecast for future unemployment. It now expects the jobless rate to a peak of 6.5 per cent this year, down from the 11.9 per cent it had previously projected. Personal financesStamp duty holiday and mortgages – The stamp duty holiday for home buyers is being extended for a further three months until the end of June, Rishi Sunak announced. Purchases up to £500,000 will continue to be free from the tax – and homes bought up to a value of £250,000 until the end of September.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayThe chancellor also confirmed a new scheme to provide mortgages to homebuyers who put forward only a 5 per cent deposit, with a government guarantee.Income tax thresholds – Thresholds at which people start to pay income tax or move into a new bracket will be frozen. The personal allowance will remain at £12,750 until 2026. The higher-rate threshold will increase to £50,270 next year, then be frozen at that level. The change means many more people will slip into higher tax brackets as wages rise.Thresholds for capital gains tax, inheritance tax and the tax-free allowance for pensions contributions will also be frozen. There was no mention of an increase in capital gains tax rates which had been rumoured to be under consideration. An increase would have levelled up the amount people pay on earnings from buying and selling assets with the amount they pay on wages.Alcohol and fuel duty rises scrapped – Duties on fuel and alcohol have been frozen. The decision means duty on petrol and diesel has remained at 57.95p a litre since 2011, with planned increases cancelled every year for the past decade.Business taxesCorporation tax – In April 2023, the rate companies pay on their profits will rise from 19 per cent to 25 per cent. The higher rate still leaves the UK with the lowest corporation tax rate in the G7.Smaller businesses will continue paying the lower rate. Only those making £250,000 or more in profit will pay a higher rate that will be tapered from 19 per cent to 23 per cent.VAT and business rates cut – A VAT cut for the hospitality and tourism industries will be extended for six months until 30 September. The chancellor said 150,000 businesses employing 2.4 million people “need our support” to protect jobs as the coronavirus restrictions are eased.The government first announced the cut from the standard rate of 20 per cent to 5 per cent last summer, applying to the hospitality industry, hotel and holiday accommodation and admission to certain attractions, as the national lockdown was lifted. Hospitality and leisure businesses will pay no business rates for three months and then one third of their normal rate for the final nine months of the year. Business support‘Restart Grants’ – £5bn of “restart grants” will be available from April to help businesses reopen. Non-essential retail businesses will open first, so they’ll receive grants of up to £6,000 per premises. Hospitality and leisure businesses, including personal care and gyms, will open later can get grants of up to £18,000.Business loans – A new raft of government backed loans will be launched to replace two programmes that are ending this year: the bounce back loan (BBL) and coronavirus business interruption loan scheme (CBILS).Businesses can apply for loans of between £10,000 and £25m through participating lenders. Loans will be backed up to 80 per cent by the government as CBILS are currently.Furlough – The Coronavirus Job Retention Scheme will continue until 30 September with furloughed workers receiving 80 per cent of their pay for hours that they do not work. From July, employers must pay 10 per cent of wages for those hours and in August they must contribute 20 per cent. More

Watch live as chancellor Rishi Sunak announces new budget for Covid ‘next stage’Rishi Sunak has announced the extension of both VAT cuts for the hospitality and tourism industries, as well as prolonging the end of the stamp duty holiday, in this year’s “fiscal firepower” Budget. Purchases up to £500,000 will continue to be free from the tax – and homes bought up to a value of £250,000 until the end of September, the chancellor confirmed.Speaking in the Commons, he told MPs more than 700,000 people have lost their jobs since March 2020 and the economy has shrunk by 10 per cent – the largest fall in more than 300 years. But he said the UK’s GDP is set to return to its pre-Covid peak in mid-2022, according to the Office for Budget Responsibility (OBR), which is six months earlier than previously anticipated. Mr Sunak also revealed that the headline rate of corporation tax will rise from 19 per cent to 25 per cent from 2023, effectively reversing the policy of his predecessor George Osborne – though it still leaves Britain with the lowest rate of such a tax in the G7, below countries like US, Germany, and Canada.Elsewhere, the chancellor pledged an additional £1.6bn for the coronavirus vaccine rollout and to “improve future preparedness”, as well as separate visa reforms for “highly skilled migrants”, in what he said is a combined move by the UK to become a “scientific superpower”.Inside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayInside Politics newsletterThe latest news on Brexit, politics and beyond direct to your inbox every weekdayShow latest update
1614783038Sunak urged to reconsider ‘insurance scheme for live events’Chair of the Digital, Culture, Media and Sport (DCMS) committee, said it was “disappointing” the government did not include cancellation insurance schemes for music festivals.“It is welcome that the Treasury has listened to the case pressed by this committee for additional support for our outstanding arts, creative and sporting sectors that have been hit so hard by the impact of the pandemic,” Julian Knight said.“However, it is greatly disappointing that the government appears not to have heard our call to give its backing to cancellation insurance schemes for festivals which would provide a safety net should organisers need to cancel plans and enable more to go ahead with confidence this summer.”It comes after some festivals, including Glastonbury and Download, were forced to cancel their events for a second year running due to the pandemic. Greg Parmley, CEO of Live, the UK’s official industry body for live music, echoed Mr Knight’s concerns and called for an insurance scheme to support festivals. “We warmly welcome the additional financial support the chancellor announced in his Budget today, which is due recognition from government that the live music industry has been one of the hardest hit by the pandemic,” he said.“The extension of the reduced 5 per cent rate of VAT, in particular, will provide significant support to businesses who have had their revenue decimated over the past year.”He added: “But we also call on the chancellor to look again at a government-backed insurance scheme, which would ensure we can recover, and get people back to work, as quickly as possible once it is safe to lift restrictions.” More