Chancellor Makes Budget Speech
What’s the latest?
The chancellor has unveiled a raft of new measures aimed at helping the UK economy recover from the Covid-19 pandemic. Making his budget speech in the Commons on Wednesday, Rishi Sunak vowed to “protect the jobs and livelihoods of the British people”. However, after announcing an extra £65bn worth of financial support to see Britain through the crisis – taking the government’s total pandemic spend to more than £400bn – the chancellor warned that “corrective action” would be required to address the UK’s debt.
What help are businesses getting?
Among support announced by Sunak is a £5bn restart grant to help businesses get back on their feet after lockdown. A £300m boost to the culture recovery fund will also help museums, galleries and other arts venues get going, while another £300m will be used to support sports clubs. Both public and private sector projects could also be boosted through the UK’s new national infrastructure bank, which will invest £12bn as part of the government’s “green industrial revolution”.
Tax-wise, the business rates holiday for hospitality, leisure and tourism firms will continue until the end of June. After this, rates will be discounted by two-thirds for the next nine months. The temporary VAT cut will also be extended until the end of September. After this, it will gradually rise from 5% to 12.5% for six months before returning to regular rates next April. However, in April 2023, the rate of corporation tax will jump to 25%. Sunak has reassured firms that this will only impact big, profitable businesses – with around 1.5m smaller companies with profits of less than £50,000 set to stay on the current 19% rate.
And what about workers?
The chancellor also used his speech to confirm an extension to the furlough scheme until the end of September. Furloughed workers will continue to receive 80% of their wages until the scheme closes, but employers will have to contribute 10% in July and 20% in August and September. The self-employment income support scheme will also run to September, with a fourth grant worth 80% of average trading profits covering February to April.
The £20-a-week uplift to universal credit payments is set to continue for an extra six months and the national living wage will be raised to £8.91, meaning a full-time adult worker on the wage will pocket an additional £350 a year. In terms of tax, Sunak has said there will be no rise in national insurance or VAT, and inheritance tax and lifetime pension allowances will be frozen. While income tax will not rise, the threshold for the basic rate (20%) will increase slightly to £12,750 until 2026. The higher rate (40%) threshold will also see a small rise to £50,270 next year, before being frozen until 2026.
Elsewhere, those looking to buy a house will benefit from a three-month extension to the stamp duty holiday for homes up to £500,000. From July, the threshold will fall to £250,000, before returning to its normal level of £125,000 in October. The government has also unveiled mortgage guarantees for first-time buyers, allowing them to access 95% mortgages on homes worth up to £600,000 from next month.
Is the economy recovering?
According to the chancellor, the success of the vaccine rollout will help the UK make a quicker recovery – with the economy expected to return to its pre-pandemic size by mid-2022. However, he admitted that rebuilding from the crisis would still be a long process, with the economy forecast to be 3% smaller five years from now than it would have been without Covid. Sunak also revealed that the budget deficit – the gap between government spending and receipts – will be 17% of GDP this year, the highest level during peacetime. However, through the “corrective action” announced in his speech, the chancellor said borrowing would drop to 4.5% of GDP in 2022-23 and to 3.5% the year after.
Nicola Sturgeon dismisses claims of a conspiracy against Alex Salmond as “absurd”. The Scottish first minister’s comments came as she gave evidence to the inquiry into her government’s unlawful handling of sexual harassment complaints against Salmond. The former first minister has accused several figures within Sturgeon’s Scottish National party of making a “malicious and concerted effort” to end his political career and even have him jailed.
Speaking to the inquiry on Wednesday, Sturgeon acknowledged that Salmond had been cleared of the sexual assault charges and admitted that the government had made a serious mistake in its handling of the allegations against him. However, she has rejected much of her predecessor’s version of events and said even by Salmon’s own account his behaviour had been “deeply inappropriate”. While Scottish Conservatives have accused her of lying to Holyrood about the investigation and called for her resignation, Sturgeon has insisted she “tried to do the right thing”.
In other news
VIRUS DATA ‘BETTER THAN EXPECTED’
New figures show Covid-19 deaths in England are falling more rapidly than expected. The most recent projections from the Scientific Pandemic Influenza Modelling (SPI-M) group estimated that daily deaths would not drop below 200 until mid-March. However, this point was reached on 25th February, suggesting the fall in deaths could be running around three weeks ahead of expectations.
Real-world figures may be outdoing estimates because the models underestimated the success of the vaccination scheme. Under the SPI-M’s models, which were used to inform the government’s lockdown roadmap, a single vaccine dose was estimated to reduce the risk of infection by up to 48%. However, real-world results show they are much more effective, with one dose cutting the risk by 70%.
AUSTRALIAN POLITICIAN DENIES RAPE CLAIM
Australia’s attorney general has described a historical rape allegation made against him as “entirely untrue”. In a statement on Wednesday, Christian Porter outed himself as the subject of a rape accusation made by a woman who took her own life last year.
The woman claimed Porter had assaulted her in January 1988 when she was 16. Porter, who would have been 17 at the time of the alleged rape, told reporters he had been friends with the woman but said the assault “simply did not happen”. While police say there is insufficient evidence to launch an investigation, prime minister Scott Morrison is facing growing calls to set up an inquiry into the allegations.
DUCHESS ‘SADDENED’ AT BULLYING CLAIMS
The Duchess of Sussex was said to be “saddened” by a report in the Times claiming she bullied staff at Kensington Palace. According to the newspaper, a complaint was made against Meghan Markle in 2018 alleging she had driven two personal assistants out of the household and undermined the confidence of another.
The duchess’s spokesperson said she was “saddened by this latest attack on her character, particularly as someone who has been the target of bullying herself”. In a response on Wednesday, Buckingham Palace said it was "very concerned" by the report in the Times and vowed to investigate the allegations. It comes just days before Meghan and Prince Harry’s “wide-ranging” interview with Oprah Winfrey – in which they discuss their exit as senior working royals – is due to be broadcast by CBS.
‘INTENTIONAL’ BLAST AT DUTCH TEST CENTRE
An explosion at a Covid-19 testing centre outside Amsterdam appears to have been intentional, according to police. The blast in Bovenkarspel, a town north of the Dutch capital, went off just before 7am on Wednesday. The centre was not open at the time and no one was injured, although the explosion shattered the building’s windows.
A police spokesperson said experts were still examining the device but suggested it had been deliberately placed. The incident is not the first attack on a Dutch testing centre: three people were arrested for torching a separate facility following the introduction of a nationwide curfew in January.
CONTACTLESS LIMIT TO RISE TO £100
The Treasury has confirmed plans to raise the limit on contactless spending to £100. The move comes just months after the limit on single payments was increased from £30 to £45. The use of contactless payments has been encouraged by retailers to reduce physical contact in shops and restaurants during the pandemic.
However, some experts have warned that raising the limit could increase theft by making it easier for fraudsters to spend large sums of money on stolen or cloned contactless cards. Ultimately, it will be up to individual banks to decide whether they introduce the higher limit for their customers.
The 62-year-old star of a car crash council meeting has now featured in her first dance track to help raise awareness of the lack of diversity in local government. Jackie Weaver, the clerk for Handforth parish council, became an internet sensation after footage of its chaotic December Zoom meeting went viral. Alongside musician Helen Meissner, she has now released her first single, ‘Jackie Weaver’s Kicked Him Out’. It aims to promote the Make a Change campaign, which works to improve diversity and tackle what some see as a stranglehold on local politics by middle-aged white men.