Budget 2021

Mr Sunak told MPs he was cancelling planned increases in both levies in recognition of the fact that consumers were going through a “tough time” as a result of coronavirus restrictions.The decision means that duty on petrol and diesel has remained at 57.95p a litre since 2011, with planned increases cancelled for 11 consecutive years.Mr Sunak said:  “Planned increases in duties for spirits like scotch whisky, wine, cider and beer will all be cancelled. “All alcohol duties frozen for the second year in a row. The third time in two decades. “And right now, to keep the cost of living low, I’m not prepared to increase the cost of a tank of fuel. So the planned increase in fuel duty is also cancelled.”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 government’s spending on coronavirus support has reached £407 billion over the course of the pandemic, following measures announced by Rishi Sunak in his Budget.Announcing his Budget to the House of Commons, Mr Sunak said that borrowing ot deal with the Covid-19 crisis was “comparable only with the amount we borrowed during the two world wars”.Mr Sunak said that measures announced in today’s Budget, including the extension of furlough payments, VAT breaks, business rates relief and the Universal Credit uplift, will add £65bn to the cost of the government’s support package.He told MPs: “At this Budget, we are announcing an additional £65 billion of measures over this year and next to support the economy in response to coronavirus.“Taking into account the significant support announced at the spending review, this means our total Covid support package this year and next is £352 billion. “Once you include the measures announced in the spring Budget last year … total fiscal support from this government over this year and the next amounts to £407 billion.“Coronavirus has been one of the largest, most comprehensive economic shocks this country has ever faced. And, by any objective analysis, this government has delivered one of the largest, most comprehensive and sustained responses this country has ever seen.”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

Rishi Sunak has announced the government’s VAT cut for the hospitality and tourism sectors will be extended for six months until the end of September.Unveiling the measure, the chancellor said 150,000 businesses employing 2.4 million people “need our support” to protect jobs as the coronavirus restrictions are eased in the months ahead.The government first announced the cut 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.Before the reduction, which was due to end on 31 March, the sectors were subject to the standard rate of VAT — set at 20 per cent.Speaking at the Budget, Mr Sunak added that when the reduction expires in September, “even then, we won’t go straight back to the 20 per cent rate”.He added: “We’ll have an interim rate of 12.5 per cent for another six months; not returning to the standard rate until next year. In total we’re cutting VAT next year by almost £5 billion.”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 weekdayUnder the government’s roadmap, hospitality businesses, including pubs and restaurants, will be allowed to reopen their doors for outside dining in April, before a full reopening in May.Mr Sunak added that the 100 per cent business rates holidays in England will continue from April until June, telling MPs: “For the remaining nine months of the year, business rates will still be discounted by two-thirds, up to a value of £2 million for closed businesses, with a lower cap for those who have been able to stay open. A £6 billion tax cut for business.”The chancellor said business rates holidays for the retail, hospitality and leisure sectors would also continue until the end of June, and would be discounted by two-thirds for the remaining nine months of the year.More than 600,000 self-employed people excluded so far from the government’s support package will be able to claim direct cash grants, as the government’s self-employment income support scheme (SEISS) is extended to cover those who began working for themselves in 2019-20. More

First-time buyers with small deposits will get a leg up onto the property ladder with a mortgage guarantee scheme in next week’s Budget.Rishi Sunak plans to incentivise lenders to provide mortages to first-time buyers and current homeowners, with just 5 per cent deposits to buy properties worth up to £600,000.The chancellor will set out on Wednesday how the government will offer lenders the guarantee they require to provide mortgages covering the remaining 95 per cent.The Treasury said low-deposit mortgages have “virtually disappeared” because of the economic impacts of the coronavirus pandemic.The prime minister, Boris Johnson, said: “I want generation rent to become generation buy and these 95 per cent mortgage guarantees help to deliver this promise.”Young people shouldn’t feel excluded from the chance of owning their own home and now it will be easier than ever to get onto the property ladder.”The scheme, which will be subject to the usual affordability checks, will be available to lenders from April.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 weekdayIt is based on the Help to Buy mortgage guarantee scheme introduced in 2013 by David Cameron and George Osborne, that ran until June 2017.Aiming to reinvigorate the market following the 2008 financial crisis, that scheme was said to have helped more than 100,000 households buy a home across the UK.Mr Sunak said: “Owning a home is a dream for millions across the UK and we want to help as many people as possible.“Saving up for a big deposit can often be difficult, and the pandemic has meant there are fewer low deposit mortgages available.”Labour’s shadow housing secretary Thangam Debbonaire said: “Home ownership has fallen in the decade the Conservatives spent weakening the foundations of our economy.“If the chancellor wants to help young people get on, he should deliver a Budget with a relentless focus on jobs and growth.“What young people need to get on is the secure future that comes with a decent job and genuinely affordable new houses to be built for them to make homes of, not going back to the days of sky-high mortgages.”Additional reporting by PA More

The legal limit on contactless payments is to more than double to £100, the chancellor Rishi Sunak will announce in his budget later.Ministers hope the move, designed to make transactions easier, will provide a shot in the arm to the struggling retail industry. But many in the sector, one of the hardest hit by the coronavirus lockdown, are calling on Mr Sunak to unveil a long-term package of support when he stands up at 12.30pm.Non-essential retailers still have to wait weeks before they are officially allowed to re-open under the government’s plans to get the country back to normal by mid-June.Mr Sunak is understood to have told the cabinet this morning that his budget will be about building the UK’s future economy.He also told cabinet colleagues that the UK could be optimistic about the economic recovery. 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 has previously warned the UK faces an economic emergency in the wake of the battle against the global pandemic. At the moment the current legal single payment limit is £45.But that will rise to £100 from today, although it may take a while longer for shoppers to notice the difference on the High Street.Mr Sunak said: “As we begin to open the UK economy and people return to the high street, the contactless limit increase will make it easier than ever before for people to pay for their shopping, providing a welcome boost to retail that will protect jobs and drive growth across the UK.”The popularity of contactless payments is rising, with eight out of ten adults thought to have used the system at least once in 2019.Ministers say the change has been made possible in part by the UK’s exit from the European Union, which currently has a £45 limit.The rise was recommended by the watchdog the Financial Conduct Authority. More

Chancellor Rishi Sunak has sent a clear signal of tax hikes in today’s Budget, telling the cabinet that it would not be “right or responsible” for the government to ignore the fact that borrowing is at “extraordinary” levels.Setting out his Budget plans to cabient colleagues shortly before addressing MPs in the House of Commons, Mr Sunak said he would use the package to provide support to help ‘get people through to the other other side of the crisis”.But he warned that borrowing had risen to levels previously seen only in wartime and the government must be “honest” about the belt-tightening that would be needed to rein in debt.A Downing Street spokesman said: “He said that the coronavirus pandemic has hit our economy hard. We’ve stepped in to provide support and protect jobs and today we will outline more support to get people through to the other side of the crisis. “The chancellor said we must be honest with ourselves and the country about what that has meant. We are borrowing on an extraordinary scale – equivalent only to wartime levels. “He said that, as a Conservative government, we know that we cannot ignore this problem and it wouldn’t be right or responsible to do so.”The spokesman added: “The chancellor said that, while we face challenging times, we will rise to that challenge and we can be optimistic about the recovery. He said the Budget will begin the work of building our future economy.”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 weekdayBoris Johnson told the cabinet that the government would set out a plan for growth, focusing on innovation, skills and infrastructure, to “unleash the potential” of the country following the pandemic.“He said the Budget would begin to set out how the country will make the most of our post-Brexit future and as a science superpower,” said the No 10 spokesman. More

The furlough scheme has supported millions of jobs, paying up to 80 per cent of wages for workers whose jobs have been impacted by the pandemic.After being extended multiple times, the Coronavirus Job Retention Scheme – to give it its official title – was set to end on 30 April.However, after some not-so-subtle hints that another extension may be on the way, the government confirmed it will now end on 30 September.Employees will continue to receive 80 per cent of their salary for hours not worked, but unions and industry warned that the chancellor is risking jobs by requiring employers to contribute 10 per cent towards pay in July and 20 per cent in August and September while the state covers the rest.The additional contributions will coincide with the planned lifting of lockdown restrictions which it is hoped will also bring increased revenues for businesses. All dates for easing are subject to change and are dependent on progress with bringing the virus under control. The extra financial burden will give employers difficult decisions to make about whether to keep on staff. 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 weekdayMeanwhile, more than 600,000 self-employed people excluded so far from the government’s support package will be able to claim direct cash grants, as the government’s self-employment income support scheme (SEISS) is extended to cover those who began working for themselves in 2019-20.Furloughed staff can continue to work part-time with their employer paying only for the hours they are needed.Employers pay National Insurance and pension contributions for all of the furloughed staff member’s hours, including those not worked. Mr Sunak will tell MPs: “First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis.“Second, once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that.”Labour said Mr Sunak could have made today’s announcement long ago, but had denied businesses certainty for months in order to be able to grab the limelight on Budget day, just eight weeks before furlough was due to expire at the end of April. The latest extension came after the chancellor dropped a clue in an interview on Sunday. Asked about the scheme by Sky News’s Sophy Ridge, Mr Sunak said he would do “whatever it takes” to support workers.“I’m not going to comment on specific policies but I want to make sure people realise that we are going to be there to support them and if you look at our track record we went big, we went early and there’s more to come next week,” he said.Kwasi Kwarteng, the business secretary, went further on Tuesday, appearing to confirm that the furlough scheme will be extended.”I think the Chancellor has already indicated that we will be extending furlough,” he said.”I think that has been part of a public announcement. I think there will be other measures that we will see tomorrow.”He told BBC Radio 4’s Today it was a “fairly good assumption that while lockdown persists there will be additional support”.Abruptly ending the furlough scheme, which has been the central plank of the government’s economic response to Covid, while restrictions are still in place, would have risked causing a sharp rise in unemployment.Official figures show the number of furloughed workers rose by 700,000 to 4.7 million in January during the third lockdown.However, experts have also warned that keeping a blanket measure in place which protects some jobs that may not have a future is damaging for the economy in long term.Mr Sunak will lay out details of the government’s latest job support plans in the Budget at 12:30 on Wednesday. More

As Britons look forward to a possible end to the coronavirus lockdown, millions of people are also anxiously awaiting the chancellor’s spring Budget announcement.Rishi Sunak will outline the government’s financial plans 3 March, when he expected to focus on “the next stage” of the UK’s Covid response.The economic fallout of the Covid-19 crisis led to the government borrowing record-breaking amounts, with the latest data showing it borrowed £8.8bn in January.Mr Sunak is once again under pressure to extend the furlough and business support schemes, which were introduced during the first lockdown last March.The government announced its roadmap out of lockdown on Monday, but businesses still have weeks and months to go before they can even begin to think about opening their doors and welcoming customers in again.Mr Sunak may also introduce a number of measures to bolster the economy and help some industries get back on their feet.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 weekdayAccording to reports, such measures may include cutting VAT and alcohol duty tax for restaurants and pub, extending the stamp duty holiday for homebuyers, and possibly vouchers for high street shoppers.Businesses have also urged him to extend the business rates holiday, which is set to end in April, to help them get through the year. However, it has been reported that officials are considering plans to increase corporation tax from 19 per cent to 25 per cent to shore up government funds.Mr Sunak may also face opposition from Conservative MPs, who may rebel if the Budget contains sizeable tax hikes some have railed against.Downing Street warned on Thursday that Tory MPs who vote against the Budget could be stripped as a whip, as it would consider such votes as a confidence issue. More