Budget 2021 news – Rishi Sunak supports self-employed with fourth grant and extends stamp duty holiday until September

DARLINGTON ‘A FANTASTIC PLACE TO LIVE’ FOR TREASURY NORTH EMPLOYEES

A financial boss who made the move from London to Darlington has said Treasury workers who relocate will find it a “fantastic place to live”.

Andrew Craddock, chief executive of Darlington Building Society, told the PA news agency: “I moved up two and a half years ago.

“I spent most of my career in financial services in London. I got a call from a recruiter asking me about the building society and to be honest I had never heard of Darlington. I came up for the interview and loved the place. I think its a fantastic place to live.”

Mr Craddock, who previously lived in Buckinghamshire and commuted into London, listed the things he appreciated about his new home town: “The cost of living, the affordability of housing, the transport links.

CONTINUED

He added: “Nor has he changed the super-spreader policy of poverty sick pay that prevents people from self-isolating.

“This Budget is an insult to the millions of NHS, schools, care, local government workers who have seen us through this crisis.”

Mark Serwotka, general secretary of the Public and Commercial Services union (PCS), said: “Rishi Sunak has failed to vaccinate the economy from the effects of the Covid-19 pandemic.

“His refusal to lift the pay cap on civil servants and other public sector workers, who have kept the country going during the pandemic, is a disgrace and economically illiterate.

“It is clear the Government will not listen to public sector workers on pay, and therefore a united trade union movement must be prepared to take action together in order for our members to see pay justice.”

UNIONS ATTACK CHANCELLOR OVER PUBLIC SECTOR PAY

Union leaders said the Chancellor’s silence on pay for public sector workers was “deafening”.

Officials of unions representing hundreds of thousands of public sector workers and civil servants described Rishi Sunak’s Budget as an “insult”.

Many public sector workers face a pay freeze this year despite calls for an increase because of their efforts during the coronavirus crisis.

Rehana Azam, national officer of the GMB, said: “The Chancellor can dance around his living room with the ministerial red box all he wants, but all this Budget shows to public sector workers is that his clapping is a worthless gesture.

“When it comes down to it, the big ‘love-in’ and ‘immense praise’ has amounted to nothing for the workers that carried us through the pandemic.”

PUBLIC SPENDING CASH IN NI INCREASED BY £4.2M AFTER BUDGET

Cash for everyday public spending in Northern Ireland has only increased by £4.2 million and there is no additional capital funding, Finance Minister Conor Murphy has said.

Almost all the extra £411.9 million announced by Chancellor Rishi Sunak on Wednesday will go on a one-off response to Covid-19.

Extension of the jobs furlough and support for the newly self-employed will help the recovery, Mr Murphy said.

He added: “Almost all of this money is one-off funding for the Covid response, which is welcome as we look to the recovery phase. However, it still leaves us with a flat-cash budget for mainstream public services.

“It is also disappointing that there is no extra capital money to spur economic recovery.”

TAX BURDEN

British households and businesses will shoulder the biggest tax burden since the 1960s after Rishi Sunak set out plans to begin repairing the nation’s finances after the coronavirus crisis.

The Chancellor used his Budget to extend the furlough scheme and Universal Credit increase as part of a £65 billion lifeline for an economy still battered by the pandemic.

But taxes on business profits are set to be hiked from 2023, while income tax thresholds will be frozen, meaning more than a million extra people will be dragged into paying it as wages increase.

The Office for Budget Responsibility (OBR) said increasing the headline corporation tax rate, freezing personal tax allowances and thresholds, and cuts of around £4 billion from departmental spending plans would raise a total of £31.8 billion in 2025-26.

The measures increase the tax burden from 34% to 35% of gross domestic product (GDP) – a measure of the size of the economy – in 2025-26, “its highest level since Roy Jenkins was chancellor in the late 1960s”.

BUDGET BOUNCE

Rishi Sunak’s Budget was welcomed by Brits last night with more people thinking the policies announced were a good idea than bad, snap polling for The Sun showed.

Pollsters Opinium found 52 per cent approve of the budget with 12 per cent disapproving – a net score of a whopping +40.

And even controversial hikes to corporation tax and the freezing of income tax allowances were backed.

51 per cent thought the Budget was fair, with just 19 per cent thinking it is unfair.

But less than one in five thought they would feel any positive effect on their household finances.

 No interest loan trial

The Government will trial a no-interest loan scheme to help low-income households pay off any unexpected debts.

It has promised £3.8million for the pilot programme to stop vulnerable Brits from falling further into debt.

The Government says the short-term loans would be handed out to help cover any unexpected costs, such as falling behind on rent due to a loss of income.

The loans would support vulnerable customers who would otherwise have to rely on high-cost credit to get them through.

Borrowers who are turned away from traditional high street lenders, for example because they have a poor credit history, often turn to creditors like doorstep lenders, which charge sky-high interest rates.

The extra charges can often leave households spiralling further into debt.

Air Passenger Duty hike

A family of four will have to shell out an additional £20 to go on holiday.

Taxes on long-haul flights are to rise despite airlines calling for them to be scrapped – though short-haul rates remain frozen.

Air Passenger Duty (APD) rates for departures from Britain will increase by £2 per economy ticket, going from £80 to £82, and by £5, from £176 to £181, for those in premium, business and first class cabins.

This means a family of four on a long-haul flight could be forced to pay an extra £20 for their flights.

However, ADP doesn’t apply on flights back to the UK, or on kids under the age of 16.

The change is in line with the RPI measure of inflation.

More time to repay Universal Credit loans

The Chancellor confirmed he is bringing forward several changes to loan repayments, including how soon you have to pay back an advance.

An advance is an upfront loan up to the value of the first Universal Credit amount a person is expected to receive.

Advances currently have to be paid back in instalments from future Universal Credit payments over the next 12 months – but that repayment period is set to increase to 24 months.

Deductions are currently capped at 30% of the standard allowance, but this will reduce to 25%.

The following measures will now come into force from April 2021 instead of October 2021.

Universal Credit MIF suspension extended

Mr Sunak confirmed he won’t reinstate the Universal Credit minimum income floor until the end of July 2021.

It will gradually be reintroduced from August 2021, but Department for Work and Pensions coaches will be given discretion to not apply it on an individual basis.

The minimum income floor was originally meant to be reapplied from April 2021.

It’s the amount you are thought to earn each month, and is used to work out how much Universal Credit you get on top of your earnings.

It applies to those who’ve been self-employed for more than a year.

Universal Credit surplus earnings threshold extended

Universal Credit claimants will continue to get the higher surplus earnings threshold of £2,500 until April 2022.

After this time, it will be reduced to £300. Surplus earnings are taken into account in your next monthly assessment period for Universal Credit.

For example, if your monthly earnings are more than £2,500 over where your payment stopped – the current threshold – this becomes “surplus earnings”. These surplus earnings are then carried forward to the following month, where they count towards your earnings.

If your regular income and surplus earnings are then still over the amount where your payment stops, your Universal Credit payment will be affected.

FIVE THINGS HIDDEN IN THE 2021 BUDGET DOCUMENTS

Rishi Sunak has set out his Budget 2021 plan to help struggling families and keep British businesses afloat.

1. Universal Credit surplus earnings threshold extended

2. Universal Credit MIF suspension extended

3. More time to repay Universal Credit loans

4. Air Passenger Duty hike

5. No interest loan trial

EXPLAINER – WHAT IS THE BUDGET?

The Budget is when the Government outlines its plans for tax hikes, cuts and things like changes to Universal Credit and the minimum wage.

It’s different to the Spending Review, which sets out how much public cash will go towards funding certain departments, devolved governments and services, such as the NHS.

The Budget is read out in the House of Commons by the Chancellor of the Exchequer. It was Rishi Sunak‘s second Budget as Chancellor.

Mr Sunak’s first Budget in March last year was dubbed the “coronavirus Budget” after it focused on supporting Brits financially through the crisis, rather than the Government’s “levelling up” agenda as promised in the 2019 general election.

Normally, the Budget is held once a year but the unprecedented circumstances of the pandemic in 2020 saw Mr Sunak give a “mini-budget” in the Commons on July 8.

THE 2021 BUDGET AT A GLANCE

NO HOPE

Rishi Sunak’s Budget gave “little hope” to the struggling social care sector, experts today warned.

Charities, care groups and MPs criticised the lack of support for the NHS, warning carers have been “forgotten” while cancer patients could “die needlessly” due to a lack of investment.

The Government said last month it is committed to reform and will bring forward proposals later this year.

Chancellor Rishi Sunak unveiled his budget this afternoon with a range of packages including a £1.6billion injection to the jabs programme.

PRESS CONFERENCE HAS ENDED

40/45 TOWNS HELPED ARE CONSERVATIVE-HELD – ARE THESE DECISIONS POLITICAL?

Mr Sunak said he is delivering support to all areas of the country. There are freeports in all different regions.

PICTURED

Mr Sunak speaking at the press conference.

CHANCELLOR ASKED ABOUT WHETHER HE IS WORRIED TAKING THE TAX BURDEN TO ITS HIGHEST LEVEL SINCE ROY JENKINS

The Chancellor said that none of the other Chancellor’s had to deal with a pandemic or any Chancellor in the last 100 years.

Mr Sunak said that he is funding strong public services.

CORPORATION TAX STILL FIFTH LOWEST RATE IN G20

Mr Sunak said that despite the tax rate going up, Britain will still have the fifth lowest rate in the G20.

‘NOBODY’S CURRENT TAKE HOME PAY WILL BE AFFECTED’

Rishi Sunak said that no person’s take home page will change with the freeze of the personal tax allowance.

CHANCELLOR ASKED ABOUT CLADDING

An additional £3.5billion pounds was given a few months ago toward helping remediate unsafe cladding over 18metres.

That work is already underway.

“We’re getting on with that at pace”.

CHANCELLOR REMEMBERS ALL THOSE WHO LOST THEIR LIVES TO COVID-19

“To the family and friends left behind your loss felt most acutely in the quietest of moments must be overwhelming. but I promise you,” Mr Sunak asked.

“We will meet this moment with the passion and energy it demands.

“And we will build a fairer and more just country in their memory.”

SUNAK CONFIRMS TO RISE IN TAXES

“I am not going to increase the rate of income tax, national insurance or VAT,” the Chancellor said.

THIS BUDGET IS ABOUT ‘LAYING THE FOUNDATIONS FOR OUR FUTURE ECONOMY’ SAYS SUNAK

“We are building our economy by doing things we haven’t before,” the Chancellor said.