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Budget 2021: Rishi Sunak insists ‘our plan is working’ in Budget for post-Covid era

·37-min read
Budget 2021: Rishi Sunak insists ‘our plan is working’ in Budget for post-Covid era

Rishi Sunak has hailed his Budget as ushering in a “new economy” after the Covid pandemic as he confirms billions of pounds of funding for the NHS and wage rises for millions of workers.

The Chancellor said the Budget was focused on the "post-Covid" era.

He told MPs: "Today's Budget does not draw a line under Covid, we have challenging months ahead.

"And let me encourage everyone eligible to get their booster jabs right away. But today's Budget does begin the work of preparing for a new economy post-Covid.

"The Prime Minister's economy of higher wages, higher skills, and rising productivity. Of strong public services, vibrant communities and safer streets. An economy fit for a new age of optimism.

"Where the only limit to our potential is the effort we are prepared to put in and the sacrifices we are prepared to make."

Read More

Budget 2021 key points: Highlights of Rishi Sunak’s speech

Budget 2021: Rishi Sunak promises ‘we will help families get by’

Budget 2021 alcohol duty: Wetherspoon, Marston’s and other pub shares jump as Rishi Sunak cuts beer tax

Budget 2021: Retailers and hospitality firms get some relief in new business rates update

Key Points

20:33 , Lily Waddell

This ends our extensive coverage of the Budget today.

‘More must be done to support the globally significant independent music sector'

17:22 , Gareth Richman

Paul Pacifico, chief executive of the trade body Association of Independent Music, said the tax relief extension in the Budget was “encouraging” but called for a music industry specific scheme.

He said: “It’s encouraging to see the Government recognise the serious blow Covid dealt to the UK’s music industry in today’s Budget, discounting business rates for music and other hospitality venues and for premises improvements and green tech use as well as increasing tax reliefs for orchestras.

“However, more must be done to support the globally significant independent music sector to ensure a viable future for diverse music, creators and entrepreneurs. One key proposal is a tax relief scheme for music, like those successfully implemented in other creative industries such as film and games.

“This cost-effective measure could provide our sector with the boost it needs, attracting inward investment and creating a ripple effect across the wider music ecosystem. We urge Government to include music in such schemes at the next opportunity.”

Sadiq Khan: A ‘disappointing Budget’

17:20 , Gareth Richman

Mayor of London Sadiq Khan has branded the budget as “disappointing” saying it takes London “for granted”. He said it “failed to deliver the support and investment London and the rest of the country desperately needs to recover from the pandemic”.

Toasting a successful budget?

17:10 , Gareth Richman

A picture show Boris Johnsonand Rishi Sunak raising a pint at a brewery in Bermondsey, south London this afternoon after delivering the budget.

 (PA)
(PA)

Jenrick : ‘Grow the economy rather than than raise taxes’

17:07 , Matt Watts

Conservative former cabinet minister Robert Jenrick said that while he welcomes Rishi Sunak’s Budget, he believes his focus should be on “growing the economy” rather than “seeing taxes rise”.

He told the House: “There is a huge amount within the Chancellor’s announcement today to be applauded, I commend him and the Treasury team and I wish them well.

“I do think their focus now needs to be on growing the economy and making the UK the most competitive place it possibly can be rather than seeing taxes rise, expenditure increase and risking the private sector not being able to flourish and build that optimistic vision that the Chancellor laid out.”

Meanwhile, Liberal Democrat MP Christine Jardine (Edinburgh West) condemned the Chancellor’s decision to slash the surcharge for bankers, saying: “How can it be that NHS and care workers are facing a £900 million tax hike while banks are, as he (Rishi Sunak) said, been given a £900 million tax cut?

“No doubt bankers will be toasting their tax cut and the Chancellor’s decision to reduce the bankers’ surcharges with cheaper bubbly tonight. It’s clear this Chancellor’s priorities are not the priorities of the British people.”

Arts and culture sector welcomes extension of tax relief

15:55 , Daniel Keane

The arts and culture sector has welcomed the Chancellor’s announcement of a tax relief extension in the Budget.

Rishi Sunak said tax relief for theatres, orchestras, museums and galleries will be extended for two years, to March 2024, in order to help them rally after months of closures and lost revenue.

Julian Bird, chief executive of Society of London Theatre and UK Theatre, said the tax break will “provide producers and investors with greater confidence in developing our world-leading theatre and drive the cultural recovery from the pandemic”.

Mr Bird added the “welcome news that core funding for the Department of Digital, Culture, Media and Sport and Local Authorities is set to increase will reassure the venues and performing arts companies up and down the country that rely on their support in delivering culture to their local communities”.

Treasury select committee chairman welcomes Budget but says ‘devil in detail'

15:37 , Laura Sharman

The chairman of the Treasury Select Committee said he “broadly” welcomes the Budget but said the “devil will be in the detail”.

Mel Stride, a Conservative MP, said the Chancellor has done a “pretty remarkable job” to support work throughout the pandemic.

However, he warned he now has an “even tougher job” to deliver growth and the government’s priorities while making sure the public finances are on a sustainable trajectory.

“I think it is fair to say my right honourable friend did a pretty remarkable job to support the jobs market and to support jobs,” he said.

“Not without criticism from my committee, but overall, a remarkable job.”

Theresa May on the Budget

15:31 , Laura Sharman

Former prime minister Theresa May appeared to make a thinly-veiled dig at the Chancellor for briefing the media ahead of the Budget.

“It is good news the Chancellor has felt able to announce, albeit over a number of days publicly rather than today to this House, a number of areas of increased spending on issues like infrastructure, the NHS and science,” she said.

“I agree that today we must start to build the new economy post-Covid and we are on the verge of what could be an economy fit for the new age of optimism.”

The Conservative MP for Maidenhead insisted she has always been optimistic by what can be achieved by the British people.

However, she noted: “The brighter future won’t be built simply by telling people it will be there. A new economy needs sure foundations and optimism needs to be backed by practical delivery.”

Ms May also questioned the government on the announcement it will introduce new fiscal rules, saying: “I may have misheard or misunderstood.

“I think he (Rishi Sunak) said that new fiscal rules will be met in the third year of every forecast period but the forecast period rolls forward every year, which suggests to me we are never going to reach the fiscal rules, that they are just going to be rolled forward every year.”

Theresa May (PA)
Theresa May (PA)

Two-year delay to £22bn funding for ‘sciences superpower’, reveals Chancellor

15:14 , Laura Sharman

The UK’s world-leading tech and life sciences sector is facing a two-year delay to funding worth £22 billion.

Budget 2021: Rishi pushes back £22billion R&D target

Disappointing figures on household growth “deep in the bowels” of Budget report

15:10 , Laura Sharman

Disappointing figures lie “deep in the bowels” of the OBR document, experts have said.

Autumn Budget is “missed opportunity” for London’s housing crisis, say experts

15:04 , Laura Sharman

Experts criticised the Autumn Budget as “underwhelming” and a “missed opportunity” to tackle the ever-growing affordable housing crisis in London.

Read more here.

Hospitality chief working hard to protect punters from surging transport costs

14:54 , Laura Sharman

A hospitality boss said said his team is unsure whether the Chancellor’s beer duty cut will offset the surging transportation and production costs companies are facing following his Budget speech today.

Sandy Jarvis, managing director of small London pubco, The Culpeper Family Hospitality Group, said the the rates relief will “certainly help”.

But he cautioned that his team is unsure whether the beer duty cut will offset these other costs.

“We’re working hard to not have to pass on any costs to our customers,” he added.

Chancellor’s statement “more about prosecco than pensions”, says wealth expert

14:49 , Laura Sharman

“Buoyed by better than expected economic forecasts, the Chancellor’s statement was more about prosecco than pensions,” said Nick Ritchie, director at RBC Wealth Management.

“Private investors will breathe a sigh of relief that feared increases to capital gains tax and a reduction in pension tax relief haven’t materialised.

“But while paying less for sparkling wine will be welcome news for many, the freezing of income tax thresholds and increase in national insurance announced earlier this year means household incomes continue to be eroded in real terms.”

Business and union reacton to the Budget...

14:41 , Laura Sharman

A union leader has attacked the Budget as a “confidence trick”, while business groups were also less than enthusiastic about the Chancellor’s announcements.

Mick Whelan, general secretary of the train drivers’ union Aslef, said: “It’s a confidence trick, because it’s not new money - or even a new announcement.

“It’s just a rehash of money that has already been promised, and already allocated, dressed up to make the Chancellor look good.

“On the eve of Cop26, cuts to air passenger duty send out all the wrong signals.”

Kitty Ussher, chief economist at the Institute of Directors, said the crucial test was whether the Budget gave business the confidence to invest.

“The Chancellor’s business rates and R&D tax credit reforms are welcome, but with hefty hikes in other taxation on the horizon that may not be enough to convince business leaders to press go on their plans for growth, she said.”

Shadow Chancellor on climate

14:37 , Laura Sharman

Rachel Reeves accused the Chancellor of failing to tackle the “huge issue” that is “adapting to climate change”.

She said failure to act will mean public sector debt “to explode later” according to the Office for Budget Responsability.

“It is nearly 300% of GDP,” she added.

She told MPs: “Adapting to climate change presents opportunities, more jobs, lower bills and cleaner air. But only if we act now and if we act at scale.

“The only way to be a prudent and responsible Chancellor is to be a green Chancellor, to invest in a transition to a zero carbon economy and give British businesses a head start in the industry of the future.”

Instead, Ms Reeves insisted home owners are left to face the cost of insulation on their own, and industries like steel and hydrogen are “in a global race but without the support they need”.

Health Secretary thanks Chancellor for backing the NHS

14:31 , Laura Sharman

Sajid Javid expressed his gratitude to the Chancellor for prioritising the UK’s recovery and health reform in his Budget delivery speech.

“Today’s Budget sends a clear message - recovery and reform of health & care an absolute priority,” the Health Secretary said on Twitter.

“Thank you to (Rishi Sunak) for backing our plans to tackle the backlog, fix social care and keep the UK at the forefront of research and development.”

Health Secretary Sajid Javid walks outside Downing Street (REUTERS)
Health Secretary Sajid Javid walks outside Downing Street (REUTERS)

Budget fails to lead on climate crisis, says Ed Miliband

14:24 , Laura Sharman

Labour’s shadow business and energy secretary Ed Miliband said the Chancellor has failed on both the cost of living crisis and the climate crisis in his Autumn Budget.

“No green recovery, no plan to save families £400 on bills, no plan for green steel,” he tweeted.

“Working people will pay the price of Tory climate delay.”

 (AFP via Getty Images)
(AFP via Getty Images)

Reeves on tax and government cronyism

14:17 , Laura Sharman

Shadow Chancellor Rachel Reeves described the government as “a by-word for waste, cronyism and vanity projects” addressing issues of tax in her response to the Autumn Budget.

“Taxes on those with the broadest shoulders, those who earn their income from stocks and shares and dividends and property portfolios, they’ve been left barely - untouched,” she said.

Chancellor “out of touch” and “out of ideas” says Reeves

14:13 , Laura Sharman

Responding further to Rishi Sunak’s Budget delivery, Shadow Chancellor Rachel Reeves said families were “struggling with rising gas and electricity bills, with rising prices of petrol at the pump and with rising food prices.”

Of her Conservative counterpart, she said: “He’s out of touch, he’s out of ideas and he’s left working people out of pocket.”

Shadow Chancellor on Brexit

14:12 , Laura Sharman

Shadow Chancellor Rachel Reeves told MPs the UK economy is set to be permanently weaker with exporters facing more barriers than their European competitors post-Brexit.

“British exporters facing more barriers than their European competitors because of the deal that this Government did is not good for our economy,” she said.

“If this were a plan it would be economic sabotage.”

Chancellor on air passenger duty rates

14:03 , Laura Sharman

Rishi’s new business rates to support recovering companies

14:02 , Laura Sharman

Chancellor Rishi Sunak has moved to give more business rates support to firms, many of which have been hammered by the pandemic.

Firms hoping for drastic reforms were left waiting, but Sunak did use the Budget to update on a number of measures.

Read them here.

Importance of early years spending

14:00 , Laura Sharman

Shadow chancellor Rachel Reeves responded to the Chancellor’s words on the importance of early years spending, saying the government cut Sure Start programmes.

“The Chancellor says today that he’s realised what a difference early years spending makes,” she said.

“I would just say to the Chancellor has he ever heard of the Sure Start programme that this Government has cut?”

Rachel Reeves challenges Rishi Sunak on his Budget delivery

13:56 , Laura Sharman

Shadow Chancellor Rachel Reeves (Sky News)
Shadow Chancellor Rachel Reeves (Sky News)

Shadow Chancellor Rachel Reeves responds to Budget speech

13:55 , Laura Sharman

Shadow Chancellor Rachel Reeves said the UK boasts faster growth because it is lagging behind in its recovery on the global stage.

"As well as having the highest death toll in Europe, Britain has suffered the worst economic hit of any major economy,” she told the House.

“The Chancellor now boasts that we are growing faster than others but that is because we fell the furthest.”

Ms Reeves said while the US and others have already seen their economy bounce back to pre-Covid levels, the UK has not.

“Our economy is set to be permanently weaker,” she added.

Rishi Sunak sums up

13:48 , Sarah Harvey

The Chancellor summed up his budget as “investment in infrastructure, innovation and skills” and a pay rise for over 2 million people”.

He ended by saying: “A £2bn tax cut for the lowest paid. This Budget helps with the cost of living. This Budget levels up to a higher-wage, higher-skill, higher-productivity economy. This Budget builds a stronger economy for the British people.”

He made no apology for record tax rise during pandemic.

“Last year, the state grew to be over half the size of the total economy. Taxes are rising to their highest level as a percentage of GDP since the 1950s.

“I don’t like it but I cannot apologise for it. It is a result of the unprecedented crisis we faced and the extraordinary action we took in response.”

Universal Credit shake up

13:40 , Sarah Harvey

The Chancellor announces changes to benefits for working people. Currently for every extra £1 someone earns, their Universal Credit is reduced by 63p. This will be cut to 55p.

Cheers! Investors quick to cheer the changes to alcohol duties

13:35 , Sarah Harvey

Shares in Wetherspoon shot up 5.07%, closely followed by All Bar One pub owner Mitchells & Butlers up 4.38%. Young’s was also up 1%.

Scotch Whisky Association CEO, Karen Betts, said: “The industry is delighted that spirits duty has been frozen for the fifth budget in succession. Freezing duty is a win-win – it enables the industry to continue to invest in jobs and growth and it delivers more revenue for the Treasury. The Chancellor deserves huge credit for resisting the temptation to raise tax on the Scotch Whisky industry at a time when we are still recovering from the impacts of the pandemic and US tariffs.

“By freezing duty, the Chancellor given welcome relief to all distillers, but especially in Scotland where 92% of all UK spirits are produced or bottled. It is confirmation that the UK government backs one of Scotland’s most important industries and will take action to protect jobs, investment and exports, and bolster the recovery in hospitality and tourism.

“The reform of alcohol taxation is the next step in ensuring that Scotch Whisky is treated fairly in the UK. Despite the duty freeze, spirits are still taxed more than beer, wine and cider. Alcohol taxation urgently needs to be reformed to be fit for the 21st century, linking tax rates with alcohol content and allowing all categories of alcohol to compete on a level playing field.”

Suank on the minimum wage

13:34 , Sarah Harvey

This was one of the many bits of the Budget that was briefed before today but Sunak confirms the minimum wage will rise 6.6 per cent to £9.50 next year. “For a full time worker, that’s a pay rise worth over £1,000”, he says.

You can read more on this here.

Sunak on fuel

13:32 , Sarah Harvey

“With fuel prices at the highest level in 8 years I’m not prepared to add to the squeeze on families and small businesses,” the Chancellor says.

“So I can confirm today: the planned rise in fuel duty will be cancelled. That’s a saving over the next five years of nearly £8billion. Compared to pre-2010 plans, today’s freeze means the average tank of fuel will cost around £15 less per car; £30 less for vans; £130 less for HGVs. After 12 consecutive years of frozen rates, the average car driver will now save a total of £1,900.”

Read more: Shares in Barclays hit as Sunak makes move on bank tax rates

13:29 , Sarah Harvey

Budget 2021: Bank shares take a hit as Sunak moves on tax rates

Sunak on business rates

13:27 , Sarah Harvey

Chancellor Rishi Sunak has moved to give more business rates support to firms, many of which have been hammered by the pandemic.

He used the Budget to update on a number of measures. They include: introducing a new revaluation cycle that will be delivered from 2023; a new investment relief to encourage businesses to adopt green technologies like solar panels.

There will be a new ‘business rates improvement relief’. From 2023, firms will be able to make property improvements, and, for 12 months, pay no extra business rates.

Sunak added: “I’m announcing today, for one year, a new 50% business rates discount for businesses in the retail, hospitality, and leisure sectors. Pubs, music venues, cinemas, restaurants, hotels, theatres, gyms.”

Any eligible company can claim a discount on their bills of 50%, up to a maximum of £110,000. Sunak said that is a business tax cut worth almost £1.7 billion.

The government had earlier this year been consulting on plans that would see revaluations of non-domestic properties take place every three years instead of the current system of five.

High street tenants have long complained about the tax, which is linked to the underlying value of a property, but currently based on values from April 2015.

Sunak on alcohol duties

13:25 , Sarah Harvey

New system that imposes higher rates on stronger drinks will be introduced to end era of “cheap high strength drinks”.

“Today we are taking advantage of leaving the EU to announce the most radical simplification of alcohol duties for over 140 years.

“We are taking five steps today to create a system that is simpler, fairer and healthier.

“First, to radically simplify the system we are slashing the number of main duty rates from 15 to just six.

“Our new system will be designed around a common sense principle - the stronger the drink, the higher the rate.”

Prosecco is set to get cheaper as Sunak announces end to the premium on low strength sparkling wines, which was 28 per cent higher than still wines.

Sunak on Tonnage Tax

13:22 , Sarah Harvey

Companies will be rewarded for adopting the UK’s merchant shipping flag, the Red Ensign.

“Now that we’ve left the EU, today we start reforming our tonnage tax regime to make it simpler and more competitive and we’re also making it fairer for UK taxpayers.

“Our tonnage tax will for the first time ever reward companies for adopting the UK merchant shipping flag the Red Ensign.”

The Chancellor joked: “I’m sure the opposition will be delighted that red flags are still flying somewhere in this country, even if they are all at sea.”

Sunak on education

13:21 , Sarah Harvey

As well as investing in infrastructure and innovation, it is “crucial” the government invests in “providing a world-class education to all our people”, he says.

“We’re increasing skills spending, over the Parliament by £3.8billion - an increase of 42 per cent per cent. We’re expanding T Levels. Building Institutes of Technology. Rolling out the Prime Minister’s lifetime skills guarantee.”

Read more: No hit to housebuilder shares on property developer tax latest

13:20 , Sarah Harvey

Our business team has the latest on the property developer tax, below:

Budget 2021: No hit to housebuilder shares on property developer tax latest

Read more: Rishi Sunak’s housing measures from new homes to cladding removal

13:19 , Sarah Harvey

Our property team has all the updates on housing in one place, below:

Autumn Budget 2021: Rishi Sunak’s housing measures from new homes to cladding removal

Sunak on innovation

13:11 , Sarah Harvey

The government will invest more in innovation, the Chancellor says.

“By the end of this parliament spending on Research and Development will be £20billion a year - a 50 per cent increase. And that is in addition tax relief,” he says.

Research and development spending will be 1.1 per cent of GDP, while the average for other comparable countries is just 0.7 per cent, he says.

Warm words for the UK’s tech and lifes sciences are backed with a pledge to increase spending on R&D to create a “science superpower”.

But perhaps more important could be moves to relax regulatory charge cap for the big pensions schemes which could unlock some of the £2.2 trillion currently off-limits to higher-risk, less liquid start-ups.

The new £1.4bn Global Britain Investment Fund will support “transformative economic activity, in our world-leading sectors”, says Sunak. Let’s see.

Sunak on devolved administrations

13:10 , Sarah Harvey

Devolved administrations will be given the "largest block grants" since 1998, according to the Chancellor.

Rishi Sunak said, through the Barnett formula, the UK Government's decisions would increase Scottish Government funding "in each year by an average of £4.6 billion, Welsh Government funding by £2.5 billion, and £1.6 billion for the Northern Ireland Executive".

The Chancellor told MPs: "This delivers, in real terms, the largest block grants for the devolved administrations since the devolution settlements of 1998."

Sunak on transport funding

13:09 , Sarah Harvey

The Chancellor said £2.6 billion is committed via a "long-term pipeline" for more than 50 local road upgrades while more than £5 billion is being committed to local roads maintenance.

He told MPs: "Enough to fill one million more potholes a year."

Mr Sunak said funding for buses, cycling and walking totals more than £5 billion adding: "The Prime Minister promised an infrastructure revolution - this Budget delivers an infrastructure revolution."

Pictured: Rishi Sunak delivers his Budget in the House of Commons

13:00 , Sarah Harvey

 (PA Wire)
(PA Wire)

Sunak on Culture

13:00 , Sarah Harvey

Tax relief for museums and galleries will be extended for two years to March 2024. Tax relief for theatres, orchestras, museums and galleries will be doubled until April 2023 before returning to the normal rate in April 2024.

Sunak on Crime

12:59 , Sarah Harvey

The Government aims to recruit 20,000 new police officers. There will also be an extra £2.2billion for the courts, prisons and probation services.

This includes £0.5billion to reduce courts backlogs and funding for programmes to tackle “neighbourhood crime, reoffending, County Lines, violence against women and girls, victims’ services, and improved responses to rape cases”.

Read more: UK economy to return to pre-pandemic size by end of the year, says Rishi Sunak

12:58 , Sarah Harvey

Budget 2021: UK economy to boom this year and next, says OBR

Homelessness funding

12:56 , Sarah Harvey

There will be a £640million a year investment to tackle rough sleeping and homelessness, the Chancellor says. This is an “85 per cent increase in funding compared to 2019”.

Unsafe cladding

12:55 , Sarah Harvey

The Chancellor has confirmed £5 billion to remove unsafe cladding from the highest risk buildings. That will be partly funded by the Residential Property Developers Tax, which Sunak said will be levied on developers with profits over £25 million at a rate of 4 per cent.

In February the tax was first mentioned as part of the government’s wider plan to bring an end to unsafe cladding. Numerous flat owners are facing huge bills for fire-safety improvements after the tragic Grenfell blaze in 2017. You can read our piece from February here

Mary-Anne Bowring, group managing director at property management consultancy Ringley Group, said: “A blanket tax on developers is fairer than leaving leaseholders to shoulder the burden but it is still a blunt instrument to use to fix the cladding crisis.”

Cory Askew, Chestertons’ Head of Sales, says on the government’s plans to address the cladding scandal: “We applaud the Chancellor’s decision to put £5billion towards the removal of unsafe cladding; a vital step towards resolving the cladding crisis in our country.

“There are a large number of property owners who are unable to sell due to their home being deemed un-mortgageable. We expected the government to coordinate a solution to this crisis in order to give affected owners hope that they won’t remain in limbo any longer.”

Health investment

12:54 , Sarah Harvey

Rishi Sunak promises the “largest health capital budget” since 2010.

There will be “record investment in health R&D, including better new-born screening as campaigned for by the Member for Cities of London and Westminster, “ he says.

“40 new hospitals. 70 hospital upgrades. More operating theatres to tackle the backlog. And 100 community diagnostic centres.”

Sunak on Conservatives: Party of public services

12:52 , Laura Sharman

The Chancellor announced a real terms rise in overall spending for "every single department" with public sector net investment at the highest sustained level for nearly half a century.

"If anybody still doubts it, today's budget confirms the Conservatives are the real party of public services," he told MPs.

New fiscal rules

12:52 , Sarah Harvey

The Chancellor says he’s setting out new fiscal rules.

“Borrowing as a percentage of GDP is forecast to fall in every single year. From 7.9 per cent this year to 3.3 per cent next year,” he says.

“We will meet our fiscal rules with a margin to protect ourselves against economic risks. That is the responsible decision at a time of increasing global economic uncertainty when our public finances are twice as sensitive to changes in interest rates as they were before the pandemic.”

Sunak on Growth

12:45 , Sarah Harvey

The Chancellor says the economy to set to return to its pre-Covid level at the turn of the year. This earlier than was forecast - March.

"Growth this year is revised up from 4% to 6.5%. The OBR then expect the economy to grow by 6% in 2022, and 2.1%, 1.3% and 1.6% over the next three years.

"In July last year, at the height of the pandemic, unemployment was expected to peak at 12%. Today, the OBR expect unemployment to peak at 5.2%.

"That means over 2 million fewer people out of work than previously feared."

Our business desk has the full details on this here.

Inflation

12:43 , Sarah Harvey

The Chancellor warns inflation is “likely to rise further”, saying the Office for Budget for Responsibility expects inflation to average 4 per cent next year.

Rishi backs the Bank of England to keep inflation under control. “They have a strong record in doing so,” he says.

Douglas Grant, director of commercial finance firm Conister, says: “If the Office for Budget Responsibility’s inflation forecast of 4 per cent over the next year materialises, this will lead to both raw material and labour cost rises which will have to be passed on to the consumer. Otherwise, this will have a negative impact on firms’ working capital, something which is already scarce due to disrupted supply chains and the Covid-19 pandemic.”

Rishi Sunak is here for the Budget

12:42 , Sarah Harvey

He says on the economy the Budget “delivers a stronger economy for the British people: Stronger growth, with the UK recovering faster than our major competitors.” He says the Budget will deliver an “economy fit for a new age of optimism.”

As Rishi starts speaking, odds on length of his speech from Ladbrokes. It’s 5-6 for under 52 minutes, and 5-6 for over that. Last year’s speech took 50 minutes.

Prime Minister invited to enjoy “carbon neutral cheese toastie” during PMQs

12:37 , Laura Sharman

Boris Johnson was invited to sample the world’s first carbon neutral cheddar cheese sandwich to mark National Cheese Toastie Day in Parliament.

Speaking at the Commons, David Warburton invited the Prime Minister to commit to trying the toastie produced within his constituency of Somerton and Frome.

“Glorious Somerset is the home of cheddar cheese,” Mr Warburton said.

“With the news that Wyke Farms in my constituency is now producing what I think is the world’s first entirely carbon neutral cheddar cheese, did my Right Honourable Friend know that eating cheddar from Somerset can reduce your cheese consumption of carbon footprint by 55 per cent?

“Will my Right Honourable Friend support our vital dairy industry by committing to enjoying a carbon neutral cheese toastie today?”

David Warburton hails “National Cheese Toastie Day” during PMQs

12:26 , Laura Sharman

David Warburton used his time at Prime Minister’s Questions to remind MPs that today is National Cheese Toastie Day.

“As the whole House will know, today is National Cheese Toastie Day. It’s a fact,” the Somerton MP said.

“A massive 4.3 billion toasties were consumed last year, they are the nation’s favourite snack.

Johnson continues...

12:21 , Laura Sharman

“It is of course correct that Cop 26 is both unbelievably important for our planet but also very difficult and it’s in the balance.”

Johnson: COP26 is “unbelievably important for our planet”

12:20 , Laura Sharman

Cop26 is “both unbelievably important for our planet but also very difficult and it’s in the balance”, Prime Minister Boris Johnson has said.

Standing in for Sir Keir Starmer after he tested positive for Covid-19, shadow business secretary Ed Miliband joked: “Just like the old days... I just want to reassure both sides of the House it’s one time only that I’m back.

“We all need the vital Cop26 summit in Glasgow to deliver next week because failing to limit global warming to 1.5 degrees will have devastating consequences for our planet and that is shared across this House.

“Does the Prime Minister agree that to keep that goal of 1.5 degrees alive we need to roughly halve global emissions in this decisive decade?”

PM confirms UK is not cutting £11.6bn climate change fund

12:19 , Laura Sharman

Boris Johnson said the UK will not cut spending in its £11.6bn commitment to helping developing countries to tackle climate change.

“We haven’t cut that. We have not cut that. We are keeping that investment.

“We remain absolutely committed to the “11.6bn that were invested to tackle climate change around the world. That is absolutely rock solid.”

The Prime Minister added that the UK is “working flat out” to ensure it reaches the £100bn target from the whole of the world.

“We have a way to go, whether we will get there or not. I cannot say. It is in the balance but the challenge is there,” he added.

Ed Miliband urges PM not to “shift goal post” in climate emergency

12:13 , Laura Sharman

Ed Miliband urged the prime minister not to “shift the goal post” when it comes to emissions reductions targets.

“It is easy to make promises for 30 years time. It is much more difficult to act now,” he told MPs during Prime Minister’s Questions today.

“Please do not shift the goal post when it comes to Glasgow. It is about the emergency we face this decade. Please keep the focus on 2030, not 2050 and beyond.”

Ed Miliband to stand in for Keir Starmer self isolating with Covid

12:10 , Laura Sharman

Shadow business secretary Ed Miliband is standing in for Sir Keir Starmer at Prime Minister’s Questions after the Labour leader tested positive for Covid-19.

Sir Keir will also miss the Budget speech later this afternoon.

On Tuesday, the House of Commons ordered for everyone except MPs to wear face coverings while on the parliamentary estate due to rising infections.

Chancellor Rishi Sunak and Justice Secretary Dominic Raab were among those Conservative MPs wearing masks in the Commons chamber, although Commons Leader Jacob Rees-Mogg was not.

Mask-wearing on the Tory benches was mixed during Prime Minister’s Questions.

Ed Miliband speaks during Prime Minister's Questions (PA)
Ed Miliband speaks during Prime Minister's Questions (PA)

Sir Keir Starmer to miss Budget speech after testing positive for Covid

12:06 , Laura Sharman

Sir Keir Starmer has tested positive for Covid-19 and will not be doing PrimeMinister’s Questions or responding to the Budget, Labour has said.

Boris Johnson has arrived in Parliament for PMQs

12:04 , Laura Sharman

Boris Johnson has arrived in Parliament for PMQs.

Boris Johnson (PA)
Boris Johnson (PA)

Post-Brexit freedoms will deliver tax reforms

12:00 , Laura Sharman

Rishi Sunak has pledged to use post-Brexit freedoms to deviate from EU rules to “deliver substantive reform of our tax system”.

He stated that the Budget prepares for a new economy post-Covid and that it is a Budget that “will take the opportunities leaving the EU has afforded us to deliver substantive reform of our tax system.”

A Downing Street spokesperson added: “The Chancellor described how the levelling up agenda would be the golden thread that runs through this Spending Review and Budget, delivering on our promises to spread opportunity across our country.”

Chancellor Rishi Sunak leaves No 11 today for his Budget speech (Jeremy Selwyn)
Chancellor Rishi Sunak leaves No 11 today for his Budget speech (Jeremy Selwyn)

Chancellor reveals the “three building blocks” of the Budget

11:56 , Laura Sharman

Rishi Sunak told Cabinet ministers the three building blocks of the Budget are strong public services, infrastructure innovation and skills, and support for working families.

A Downing Street spokesperson said: “The Chancellor outlined his plans for the Budget and Spending Review that will deliver a stronger economy for the British people, promoting high skills, high productivity and higher wages.”

Mr Sunak emphasised that there would be strong investment in all three including £6 billion to help clear NHS backlogs and £3 billion investment in skills.

Pictured: Rishi leaves Downing St

11:22 , Daniel Keane

Rishi Sunak has been pictured leaving 11 Downing Street before delivering his Budget to the House of Commons.

The Chancellor will use his Budget to set out plans for a post-coronavirus economy, boosted by better-than-expected forecasts but against a backdrop of a rising cost of living.

Rishi Sunak pictured with the famous ministerial red box (PA)
Rishi Sunak pictured with the famous ministerial red box (PA)

Chief Secretary says agoraphobia means he will not feature in pre-Budget photo

11:09 , Daniel Keane

The Chief Secretary to the Treasury has announced he will not feature in the traditional pre-Budget photograph with the Chancellor as he is agoraphobic.

Simon Clarke tweeted that his condition “prevents me being comfortable in some open spaces” and so as a result would not take part in the shots outside No 11 Downing Street.

The Treasury ministerial team is ritually photographed together outside the famous black door while the Chancellor holds up their Budget red box before the Commons fiscal speech.

Forecasting group says OBR will hike GDP prediction

10:54 , Daniel Keane

The EY Item Club, an economic forecasting group, believes the Office for Budget Responsibility (OBR) will hike its gross domestic product (GDP) forecast for 2021 to growth of 7 per cent from the 4 per cent forecast at the last fiscal statement in March.

It also predicts the OBR will slash its estimate for how much the pandemic has scarred the economy to as low as 1 per cent.

This could boost the Government’s fiscal position by £25 billion a year by 2025.

The Times said the GDP growth figures, matched with “favourable” employment figures, could give the Chancellor another £20 billion to £30 billion extra to spend.

Hopes for Universal Credit and public sector pay

10:33 , Laura Sharman

Former Shadow Chancellor John McDonnell said he hopes Rishi Sunak will reverse universal credit cuts and guarantee public sector workers “a real pay rise” above inflation rate in his Budget speech today.

Skepticism over Chancellor’s message of optimism

10:31 , Laura Sharman

John McDonnell has expressed skepticism over the Chancellor’s message of optimism ahead of his Budget speech today.

The former Labour Shadow Chancellor raised doubts over Rishi Sunak’s ability to bring optimism while “disappointing so many.”

“People out there are suffering. The chancellor has put out this slogan today about optimism,” he told Sky News.

“I don’t think people who have just had their Universal Credit cut are going to feel particularly optimistic with inflation rising and energy prices rising.”

He continued: “Even the announcement of lifting the pay freeze was spoilt when they said we are lifting the pay freeze but you are not guaranteed that...

“This idea that suddenly you can bring about optimism when you are disappointing so many people, I think is going to come back and the Chancellor is going to have to think again.”

Calls for immediate action following end of £20 Universal Credit boost

10:09 , Laura Sharman

Labour continued calls for Chancellor Rishi Sunak to set out an immediate plan to support families through the winter when he delivers his Budget.

Shadow Treasury chief secretary Bridget Phillipson said many low-income families have been hit hard by the ending of the temporary £20-a-week increase in Universal Credit.

“It is the biggest cut to social security we have seen since the welfare state was created,” she told Sky News.

“For many families it is all they have ever known. A lot of families started receiving Universal Credit because of the pandemic. It is a massive hit to families’ incomes.

“We want to see immediate action to deal with the cost-of-living crisis facing families as we are entering a pretty tough winter for lots of people, but also businesses too.

“We have had a lot of smoke and mirrors going into this Budget, and it’s all very good and well the government promising things, but if that doesn’t lead to people feeling that extra support in their pocket, that will be the real test for the government.”

The Budget on NHS backlog

10:05 , Laura Sharman

The NHS backlog will take longer to clear without extra funding for social care in this week’s Budget, bodies representing councils and healthcare groups have warned.

It comes after the Health Secretary said he could not be sure if fresh billions would clear the backlog in three years.

Chancellor Rishi Sunak will use his Budget on Wednesday to commit a further £5.9 billion in capital funding to help sort the crisis created by the pandemic.

It comes on top of £12 billion announced last month, but Sajid Javid said it is “impossible to know” how well the issue will be tackled in the coming years.

Dominic Raab and Priti Patel arrive for Cabinet meeting

09:48 , Laura Sharman

Deputy Prime Minister Dominic Raab and Home Secretary Priti Patel have arrived in Downing Street.

Deputy Prime Minister Dominic Raab (AFP via Getty Images)
Deputy Prime Minister Dominic Raab (AFP via Getty Images)

Mr Raab was pictured wearing his blazer slung over his shoulder as he made his way to the weekly Cabinet meeting ahead of Rishi Sunak’s Budget delivery.

Home Secretary Priti Patel (Getty Images)
Home Secretary Priti Patel (Getty Images)

Ms Patel appeared to be in high spirits carrying a smile and a folder under her arm.

Cabinet arrives ahead of Budget presentation

09:39 , Laura Sharman

Cabinet members were seen arriving in Downing Street for their weekly meeting before the Budget is delivered on Wednesday.

Later this morning, Chancellor Rishi Sunak will head to the House of Commons to present his Autumn Budget and spending review.

Chief Whip Mark Spencer, Leader of the House of Commons Jacob Rees-Mogg and Attorney General Suella Braverman were pictured en route to the meeting.

Chief Whip Mark Spencer, Leader of the House of Commons Jacob Rees-Mogg and Attorney General Suella Braverman (left to right) (PA)
Chief Whip Mark Spencer, Leader of the House of Commons Jacob Rees-Mogg and Attorney General Suella Braverman (left to right) (PA)

British Defence Secretary Ben Wallace and Foreign Secretary Liz Truss were also seen arriving.

British Defence Secretary Ben Wallace arrives ahead of the weekly Cabinet meeting at Downing Street (Getty Images)
British Defence Secretary Ben Wallace arrives ahead of the weekly Cabinet meeting at Downing Street (Getty Images)

Keir Starmer: The Budget must help working people

09:29 , Laura Sharman

Labour leader Sir Keir Starmer has said the Budget must take the pressure off working people.

“With costs growing and inflation rising, Labour would cut VAT on domestic energy bills immediately for six months,” he tweeted.

“Unlike the Tories, we wouldn’t hike taxes on working people and we’d ensure online giants pay their fair share.”

Sir Keir Starmer (PA)
Sir Keir Starmer (PA)

“New age of optimism” anticipated for today’s Budget

08:30 , Laura Sharman

Rishi Sunak will hail a “new age of optimism” in his Budget amid predictions he will have more money than expected to spend due to a fast bounce-back from Covid.

Rishi Sunak wears £95 designer flipflops with socks to pre-Budget meeting

08:09 , Laura Sharman

The Chancellor was pictured wearing a pair of £95 Italian sliders ahead of today’s Budget.

Rishi Sunak wore the Palm Angels shoes over a pair of white socks as he went over last minute details with an advisor.

Another photo showed his customary “pre-game Twix and can of Sprite” on his desk by the Budget red box.

Budget must help those on low incomes through the winter, says Jenrick

08:01 , Laura Sharman

The chancellor must help those on low incomes through the winter in today’s Budget, urged Robert Jenrick.

“He is also going to have to think carefully about those people on the most modest incomes and how he can help them through a difficult period where we are seeing inflation rising, higher energy prices and so on,” he added.

MP says we will all be better off from the new Budget

07:58 , Laura Sharman

The former treasury minister said we are all going to be better off from The Budget, with experts predicting that the economy has substantially grown.

Robert Jenrick told Sky News: “Therefore we are borrowing much less as a country and that gives some more room for the chancellor to invest in the future of public services which we all depend on like the NHS.”

Robert Jenrick (PA)
Robert Jenrick (PA)

Rishi may have more to spend as country rebounds better than expected

07:51 , Laura Sharman

Rishi Sunak is thought to have more to spend in the Autumn 2021 Budget as the country has rebounded better than expected from the pandemic.

What does business want from Rishi’s Autumn Budget 2021?

07:47 , Laura Sharman

Chancellor Rishi Sunak will deliver the government’s latest budget at 12.30pm in Parliament today.

More support loans, business rate reforms and more funding for skills training are among the wish list.

Reversing the rise in corporation tax plus VAT and other tax cuts is also desirable.

Rishi Sunak (PA)
Rishi Sunak (PA)
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