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What Rishi Sunak’s new budget means for people in Greater Manchester

Everything you need to know

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Rishi Sunak has said he wants to be honest about the government’s plans for fixing the public finances.

The chancellor says there has been ‘acute damage’ to the economy, with more than 700,000 people losing jobs and the economy shrinking by 10% – the largest fall in 300 years.

Borrowing has also been as high as during wartime.

He said: “It’s going to take this country, and the whole world, a long time to recover from this extraordinary situation.”

Here are the key points from his 2021 budget announcement….

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Furlough

  • Sunak explains that 1.8 million fewer people are expected to be out of work than previously thought, with the peak at 6.5% down from the forecasted peak of 11.9%.
  • Furlough is set to be extended until the end of September this year, however, firms will be asked to contribute 10% of employee’s wages in July and 20% in August and September as the scheme is gradually phased out.
  • A fourth grant worth 80% of average trading profits up to £7,500 covering February to April that will help self-employed people.
  • The £20 increase in universal credit will extend for six months

Business Support

  • Total cash support to businesses has reached £25bn. A further £5bn restart grant has now been confirmed to help companies get going after lockdown.
  • Hospitality and leisure businesses will pay no business rates for three months, then discounted for the remaining nine months of the year by two-thirds.
  • The 5% VAT cut will be extended to the end of September and gradually increased at 12.5% for six months before returning to the normal rate in April 2022.

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Housing

  • The stamp duty holiday will be extended on properties up to £500,000 to the end of June. It will return to normal levels from October 1st.
  • Mortgage guarantees were also confirmed to help first-time buyers access 95% mortgages, with just 5% deposits.

Public Finances

  • The government will take a ‘fair’ approach to ‘fixing the public finances’ the chancellor confirms.
  • There will be no increase in national insurance, income tax or VAT.
  • The personal allowance will remain at £12,750 until 2026 and the higher rate will increase to £50,270 next year.
  • Inheritance tax threshold, pensions lifetime allowance, annual exempt allowance from capital gains tax and VAT exemption thresholds will all be frozen.
  • New minimum wage rates come into force in England on April 1st. Basic rate workers will see a 2.2% increase, with the National Living Wage rising to £8.91 an hour.

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Borrowing

  • The budget deficit will reach £355billion this year (17% of GDP) – the highest level in peacetime.
  • Sunak said: “It’s going to be the work of many governments over many decades to pay it back, just as it would be irresponsible to withdraw support too soon, it would also be irresponsible to allow our future borrowing and debt to rise unchecked.”

Growth

  • The chancellor explains that the economy will recover more quickly than previously thought.
  • GDP will grow by 4% this year and 7.3% next year according to official forecasts.

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Labour pledges to renationalise railways and hire thousands of doctors and nurses

The party’s shadow transport secretary said the conservative’s ‘disastrous rail system’ has ‘catastrophically failed us all’

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The Labour Party

The Labour party has pledged to bring the nation’s railways back into state ownership if it wins the next general election.

Speaking at the party’s annual conference in Liverpool today, Shadow Transport Secretary Louise Haigh said putting ‘failing private operators in the hands of the public’ would ‘improve services and lower fares’. 

Haigh added that the government’s ‘disastrous rail system’ has ‘catastrophically failed us all’ and turned railways into a ‘cash machine for companies and foreign governments’.

She cited the recent Avanti West Coast disruption as an example, slamming it as ‘the worst performing operator in the country’ over its long delays and service disruptions.

During its conference, the party also promised a recruitment drive for thousands more NHS doctors, nurses and midwives by reversing the Conservative party’s abolition of the 45p tax rate for top earners.

The scrapping of the 45p tax rate – which is paid for by those who earn over £150,000 a year – has received huge backlash from both Labour and Conservative MPs, many of whom say the move is only set to benefit the wealthy.

Shadow Chancellor Rachel Reeves said the billions of pounds saved on reversing this cap would deliver ‘one of the biggest expansions of the NHS workforce in history’, instead of handing financial rewards to the UK’s top earners.

She announced that under Labour’s plan, the money saved would pay to double the number of district nurses qualifying every year, train 5,000 more health visitors, and create an extra 10,000 nursing and midwifery each year.

She also said that the number of medical school places would be doubled from 7,500 to 15,000 to ‘make sure that everyone who wants to train as a doctor in Britain can’.

Reeves said: “Our priority is not tax cuts for the wealthiest few – it is securing our public finances and investing in our public service.

“I can tell you: with a Labour government, those at the top will pay their fair share. The 45p top rate of income tax is coming back.”

 

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Boy, 15, arrested after teenage boy stabbed to death outside school

He’s the second person to be arrested

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West Yorkshire Police

A teenage boy has been arrested following the murder of a 15-year-old on Wednesday.

The suspect, also 15, was picked up by police after student Khayri McLean was stabbed to death in Huddersfield.

He has now been arrested in connection with the murder.

He’s the second person to be arrested as police investigate Khayri’s death outside his school.

West Yorkshire Police said: “Police investigating the murder of 15-year-old Khayri McLean in Huddersfield have arrested a second youth in connection with the incident.

“The 15-year-old male was arrested yesterday and is currently in custody. A 16-year-old male who was arrested yesterday also remains in custody.

“Officers from West Yorkshire Police’s homicide and major enquiry team (HMET) are continuing to conduct enquiries into the death of Khayri, who died after being stabbed on Woodhouse Hill, Huddersfield, on Wednesday.”

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Kwasi Kwarteng scraps cap on bankers’ bonuses in first mini-budget as Chancellor

NEWS JUST IN

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Chancellor Kwasi Kwarteng gave his first mini-budget in the House of Commons this morning.

He began by discussing the government’s plan to support people with the cost of energy, including freezing domestic bills at £2,500 and giving out the £400 rebate.

There’s also unit price limits for companies.

Kwarteng said he believes the UK needs a ‘new approach for a new era’ to achieve growth of 2.5%, saying the three important parts of his mini-budget are reforming the economy’s supply side, tax cuts and a responsible approach when it comes to public finances.

As part of this, the Chancellor announced a new bill to overhaul planning restrictions, saying this will ‘unpick the complex patchwork of planning restrictions and EU-derived laws’.

He revealed that benefit claimants will see their benefits reduced if they do not fulfil their job searching commitments.

Kwarteng also confirmed that the cap on bankers’ bonuses will be scrapped, following reports that he would make this one of his first moves.

As well as that, the planned corporation tax increase has been cancelled, and will remain at 19%, with the Chancellor also setting out a series of tax cuts for businesses.

This includes tax cuts for businesses in designated tax sites for 10 years, accelerated tax reliefs for buildings, and no business rates to pay for newly occupied business residences.

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