Budget 2021 news LATEST: Rishi Sunak to hand pubs cash injection as stamp duty extension to see house prices soar

EXPLAINER – WHAT IS THE RED BUDGET BOX?

The red box, which carries the Budget speech from No.11 to the House of Commons, is often held up outside 11 Downing Street by the Chancellor.

The briefcase has been used for more than 150 years with the first box being made for William Gladstone in 1860.

Gladstone’s box was lined with black satin and covered with scarlet leather.

Parliament explains: “The word Budget comes from an old French word ‘bougette’ meaning little bag.

“It was customary to bring the statement on financial policy to the House of Commons in a leather bag.

“The modern equivalent of the bag is the red despatch box or Budget box.”

WHAT IS EXPECTED IN THE BUDGET?

EXPLAINER – HOW MUCH DID THE GOVERNMENT BORROW IN 2020?

The Government borrowed a staggering £400billion over the past year – eight times more than in 2019.

Economist Liam Halligan wrote in The Sun in February 2021: “The pandemic has caused Britain’s deepest economic downturn in three centuries.

“Our locked-down economy has… struggled to generate tax.

“That has opened a vast hole in the public finances, with this year’s multi-billion-pound deficit adding to our already huge national debt.”

Business Secretary Kwasi Kwarteng said Mr Sunak had acknowledged the country could not “go on spending money forever”.

CASH IN

Rishi Sunak is almost certain to extend furlough in tomorrow’s Budget as Boris Johnson vows to “unleash growth”

The Chancellor is expected to include a fourth furlough scheme extension in his public economic proposals tomorrow – in a bid to continue keeping workers afloat during the pandemic.

Business Secretary Kwasi Kwarteng has signalled that Chancellor will announce the extension during his public announcement of the Budget on Wednesday.

Mr Kwarteng told BBC Breakfast: “I think the Chancellor has already indicated that we will be extending furlough.

“I think that has been part of a public announcement. I think there will be other measures that we will see tomorrow.”

EXPLAINER – WHERE DOES THE GOVERNMENT BORROW MONEY FROM?

The government borrows money by selling bonds, explains the BBC.

Public finances have been battered by the coronavirus pandemic since it gripped the UK from early 2020.

The Government has been handing out huge sums of money to businesses and employees to prevent millions of people winding up unemployed.

The cost of the Chancellor’s furlough scheme – which pays furloughed staff 80 per cent of their wages up to £2,500 a month – is £14billion a month, according to the Office for Budget Responsibility. Raising taxes are one way to boost coffers.

EXPLAINER – WHAT IS THE BUDGET?

The Budget will be held on Wednesday March 3, 2021. The government confirmed the date in December 2020.

It is scheduled on the parliament website to take place after the Prime Minister’s Questions.

PMQs usually lasts around half an hour so the Budget will start just after 12.30pm.

It may be later if PMQs overruns and time is often given to allow MPs to enter the House of Commons chambers.

There is also a short break as the Budget is traditionally chaired by the principal Deputy Speaker rather than the Speaker of the House of Commons.

BIZ BOOST

Rishi Sunak will give a £520million “shot in the arm” to Britain’s army of small businesses to help the nation recover from the Covid recession.

The Chancellor wants to use the cash to help small firms act like City giants so they get a bigger slice of lucrative online sales.

Under the ‘Help to Grow’ scheme, which will be unveiled in Wednesday’s Budget, businesses will get up to £5,000 in vouchers to help improve their IT and become more productive.

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TOP TORY WARNS BRITS TO BRACE FOR TAX RISES

Brits need to brace for tax rises to get the nation’s finances back in the pink, a top Tory has warned ahead of Rishi Sunak’s budget tomorrow.

William Hague, who is a close ally of the chancellor, said levies on businesses and individuals “have to go up” to pay off the pandemic debt pile.

And he warned MPs who oppose tax rises because of the current economic climate are buying into “dangerous illusions”.

Mr Kwarteng said: “We have got another three years to run in the parliament and the Chancellor will be looking to reduce the deficit.

“For now, I think the real emphasis is on trying to provide critical support.”

FURLOUGH SCHEME EXPECTED TO CONTINUE

The furlough scheme is expected to continue, along with other support for businesses.

Mr Sunak has tried to wean the economy off the eye-wateringly expensive furlough scheme before, only for the worsening pandemic to force a U-turn, so it will be interesting to see how long an extension he grants and whether it becomes less generous as more of the economy reopens.

BORIS SAYS BUDGET 2021 WILL BUILD ON EVERYTHING WE’VE DONE

Boris Johnson said he was confident the Budget would “build on everything we have done” to look after businesses and the public throughout the coronavirus crisis.

“I’m not going to anticipate what the Chancellor is going to say on Wednesday,” the Prime Minister told reporters.

“But I am absolutely confident that it will be a Budget that builds on everything we have done to look after the businesses and the people of this country throughout the pandemic.

“But that also paves the way for a strong, jobs-led recovery. That’s what our focus is going to be on.”

BUDGET TO ‘UNLEASH GROWTH’ SAYS JOHNSON & SUNAK

Boris Johnson and Rishi Sunak want the Budget to “unleash growth”, Downing Street said.

The Prime Minister’s press secretary Allegra Stratton told reporters: “It is a challenging time for the public finances but what they want to be doing is unleashing growth and supporting jobs.”

CONTINUED

He warned the country can’t “go on spending money forever” but suggested significant tax rises and cuts won’t come until later on this year.

Mr Kwarteng said: “We have got another three years to run in the parliament and the Chancellor will be looking to reduce the deficit.

“For now, I think the real emphasis is on trying to provide critical support.”

He added: “Obviously we have to balance the books over time, but I am a low tax Conservative and the real key is to grow the economy.

“The best remedy for the deficit is to open up the economy, allow people to get on with their lives, allow businesses to start trading again.

“If we stick to the road map there’s every chance that the second half of this year will see the economy grow. Through that growth I think we’ll be able to tackle the deficit.”

TAXING TIMES

Brits need to brace for tax rises to get the nation’s finances back in the pink, a top Tory has warned ahead of Rishi Sunak’s budget tomorrow.

William Hague, who is a close ally of the chancellor, said levies on businesses and individuals “have to go up” to pay off the pandemic debt pile.

And he warned MPs who oppose tax rises because of the current economic climate are buying into “dangerous illusions”.

His intervention on the eve of the budget will be seen as a clear indication of Mr Sunak’s determination to press ahead with new levies.

This morning the business secretary Kwasi Kwarteng admitted the Treasury will need to start clawing back the cash spent on schemes like furlough.

EXPLAINER – HOW DOES THE STAMP DUTY HOLIDAY HELP THE ECONOMY?

The Treasury announced the stamp duty holiday in a bid to breathe life into the property market after it effectively froze during the first lockdown with viewings, sales and moves suspended.

Experts said a stamp duty holiday would encourage more home owners to move, helping to kickstart economic activity in other sectors.

Recent data from HMRC shows stamp duty receipts hit £6.7billion by the end of January.

This means the last four months’ receipts are at 82% of normal levels in comparison to last year’s levels despite the tax holiday.

This could mean that only small changes may be needed in the Budget to get tax revenue from stamp duty back on track.

SUNAK TO FOCUS HIS BUDGET ON SUPPORT FOR BUSINESSES AND FAMILIES, KWARTENG SAYS

Rishi Sunak will focus on “critical support” for businesses and households in his Budget rather than immediate efforts to balance the books, a Cabinet colleague indicated.

The Chancellor has said his address to MPs on Wednesday will be characterised by “honesty and fairness”, indicating he will set out how he intends to begin the task of repairing the public finances which have been battered by coronavirus.

Business Secretary Kwasi Kwarteng played down the prospect of immediate large tax increases but said Mr Sunak had acknowledged the country could not “go on spending money forever”.

“For now, what we have to do is support businesses, individuals, families, through what has been an extremely difficult time,” he told BBC Breakfast.

“We have got another three years to run in the parliament and the Chancellor will be looking to reduce the deficit.

“For now, I think the real emphasis is on trying to provide critical support.”

WILL THE STAMP DUTY HOLIDAY BE EXTENDED?

Mr Sunak is expected to make an announcement on the stamp duty holiday in the Budget on March 3.

Mr Sunak has previously said to be reluctant as he looks for ways to pay the huge Covid bill, which was at nearly £300billion in January.

Although the nine-month stamp duty holiday may have sparked a mini-boom in the housing market, it has cost taxpayers an estimated £3.3billion.

Buyers looking to take advantage of the scheme before the deadline may well have missed their opportunity to get their sale completed in time.

Another industry expert warned in early November that half of house sales agreed from then will miss the stamp duty discount deadline.

EXPLAINER – WHEN DOES THE STAMP DUTY HOLIDAY END?

The stamp duty holiday is due to expire on March 31, 2021.

But there have been calls for the Chancellor to extend this deadline to prevent 100,000 property sales from falling through.

Mr Sunak is expected to make an announcement about the future of the schemes in this week’s Budget.

The government’s plans for spending and the economy will be revealed in his speech taking place on Wednesday, March 3.

BUSINESS BOOST

Rishi Sunak will give a £520million “shot in the arm” to Britain’s army of small businesses to help the nation recover from the Covid recession.

The Chancellor wants to use the cash to help small firms act like City giants so they get a bigger slice of lucrative online sales.

Under the ‘Help to Grow’ scheme, which will be unveiled in Wednesday’s Budget, businesses will get up to £5,000 in vouchers to help improve their IT and become more productive. They will also be able to get management training from Britain’s world-beating business schools.

Mr Sunak said: “Our brilliant SMEs are the backbone of our economy, creating jobs and generating prosperity – so it’s vital they can access the tools they need to succeed “Help to Grow will ensure they are embracing the latest technology and management training, fuelling our Plan for Jobs by boosting productivity in all corners of the UK.”

CONTINUED

And Paul Nowak, Deputy General Secretary at TUC, added: “Young people have borne the brunt of the job losses caused by the coronavirus pandemic, and we need an urgent plan to make sure this experience doesn’t scar their future.”

At the weekend the Chancellor announced that the cash bonus scheme for hiring young apprenticeships is set to double to £3,000.
And it will be extended by six months to help get more young people back to work.

RISHI ECO PLEA

Rishi Sunak must use tomorrow’s Budget to create 250,000 green apprenticeships, eco-campaigners have urged.

Friends of the Earth said the Chancellor could tackle both climate change and soaring youth unemployment in one “double whammy”.

The Chancellor is under pressure to use his last Budget before the COP26 climate change conference to push a raft of eco-changes through.

The charity calls for a green apprenticeship programme to be run alongside other schemes from the DWP, Department for Education and Treasury.

Denis Fernando, climate campaigner at Friends of the Earth, said it would “prevent a new wave of youth unemployment while helping the UK towards a more climate-friendly future.”

HOME BUY AID

First-time buyers and current homeowners will be able to get mortgages on properties up to £600,000 with five per cent deposits.

On Wednesday the government will outline to lenders how it will guarantee the other 95 per cent.

PM Boris Johnson said: “I want generation rent to become generation buy.

“Young people shouldn’t feel excluded from the chance of owning their own home.”

Here’s what we know about the scheme so far.

TAX HIKE PLEA

Ex-Chancellor Ken Clarke urged Rishi Sunak to consider an income tax rise even though it would break a Tory manifesto vow.

He told the BBC: “Sensible people know in their bones all this emergency government spending is going to have to be paid for and is going to be a burden on them.

“Authors of the manifesto had no idea this massive economic blow was about to hit.”

BERR BILL CHEER

Beer duty is expected to be frozen to give pubs a flying start when lockdown is lifted.

Tory colleagues have urged the Chancellor to slash 2p off the price of a pint.

But sources say he will resist that but consider higher rates on supermarket booze.

Conservative MP Jane Stevenson said: “Landlords have gone above and beyond. A cut in beer duty would be warmly welcomed.”

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 government’s and services, such as the NHS.

The Budget is read out in the House of Commons by the Chancellor of the Exchequer. It will be 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.

EXPLAINER – WHEN IS THE BUDGET?

The Budget will be held on Wednesday March 3, 2021. The government confirmed the date in December 2020.

It is scheduled on the parliament website to take place after Prime Minister’s Questions.

PMQs usually lasts around half an hour so the Budget will start just after 12.30pm.

It may be later if PMQs overruns and time is often given to allow MPs to enter the House of Commons chambers.

There is also a short break as the Budget is traditionally chaired by the principal Deputy Speaker rather than the Speaker of the House of Commons.