Tag Archives: Rishi Sunak

Will The Treasury Call Time On Boris Johnson’s ‘Buy Now, Pay Later’ Premiership?

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Promises, promises, what price promises? Back in the summer of 2019, fresh from his Tory leadership triumph, Boris Johnson famously couldn’t resist the temptation of trying to make a political pledge sound all the more binding by making it outside No.10.

He didn’t just stand on the steps of Downing Street to promise a social care plan. In a strange bit of meta-politics he actually told us: “I am announcing now, on the steps of Downing Street, that we will fix the crisis in social care once and for all with a clear plan we have prepared.” Of course, we’ve long since learned there was no plan; it wasn’t “clear” and it certainly wasn’t “prepared”.

Just three days later, the newly-installed PM was at it again. In his first major policy speech, he turned up to Manchester to commit to building a brand new rail line to Leeds, part of the Northern Powerhouse Rail across the Pennines. While many in the social care sector remember the No.10 words, quite a few in the north remember the rail pledge too.

“Today I am going to deliver on my commitment to that vision with a pledge to fund the Leeds to Manchester route,” Johnson said. He said there would need to be agreement on the exact proposal “but I have tasked officials to accelerate their work on these plans so that we are ready to do a deal in the autumn.”

That was autumn 2019, but it may end up being autumn 2021 before any “deal” is done. It has emerged that there are new plans to cut costs by upgrading an existing rail route through Huddersfield and Dewsbury.

Our Arj Singh has sources claiming a split between No.10 and the Treasury, with the latter preferring to wait until the spending review later this year. If it is scaled back as well as delayed, the ‘Crossrail for the North’ may leave plenty in the north cross.

It’s just one example of several tensions between No.10 and No.11 in coming months, with the Sunday Times pointing to the pensions lock, catch-up funding and, yes, social care, as potential flashpoints. On the intriguing proposal of a one-year ‘moratorium’ on not putting up pensions to match earnings, Johnson said: “I’m reading all sorts of stuff at the moment which I don’t recognise at all.” 

Similarly, the PM’s spokesman insisted the £200m successor to the Royal Yacht was definitely going ahead and it would definitely come from the Ministry of Defence’s budget. On both pensions and the new Britannia, it felt like No.10 asserting itself.

On the longest day of the year, it was a midsummer murder of the idea the Treasury calls the shots. After all, when James Dyson complained about Rishi Sunak’s failure to meet his tax break demands last year, it was the PM who texted back: “James, I am first lord of the Treasury…”.

Johnson’s own description of his political philosophy is that he is a “Brexity Hezza”. Just like Michael Heseltine, he likes grand projets, state-led investment. His record of getting value for money, however, is not so peachy: highly expensive ‘Boris buses’, loss-making cable cars over the Thames, millions on a garden bridge to nowhere.

The image of a spendthrift prime minister who doles out short-term cash to avoid making long-term hard choices was one outlined by Dominic Cummings in his latest broadside. “The most valuable commodity in govt is focus and the PM literally believes that focus is a menace to his freedom to do whatever he fancies today,” the Substack Svengali wrote. “Hence why you see the opposite of focus now and will do till he goes.”

Given Cummings’ own lavish praise for Sunak of late, he clearly thinks a sense of grip, both fiscal and managerial, will arrive once the chancellor moves into the next house in Downing Street. The battle with Tory backbenchers over planning reform, a Cummings cause celebre, may well end up with another Johnsonian tweak of policy that avoids another hard choice.

The joke among some Conservative fiscal hawks is that Johnson really is a 2021 version of the old joke: “a billion here, a billion there, pretty soon, you’re talking real money”. Having ruled out a return to ‘austerity’, it appears he’s forcing his own Treasury into an unenviable choice between yet more borrowing and new tax hikes.

There’s a strong suspicion that Johnson really does think more borrowing is the answer, if growth fails to look sustainable. If so, that would be in keeping with the PM’s “buy now, pay later” approach. The begging bowl needed for the rash and flash renovation of his Downing Street flat seemed to encapsulate his entire political philosophy of putting off nasty bills.

Johnson hates political costs almost as much as he hates balancing the books. Hard choices will be softened, the can kicked down the road as long as he can keep the voters smiling.

The only spending he seems to hate is spending his own political capital. Most PMs use the early part of a term to do the tough stuff before wooing the voters later, but Johnson seems to be as permanently in campaign mode as any US president.

Yet as Cummings suggests, the lack of focus on actual governance between elections may one day catch up with him. Splashing the cash on northern rail projects is nowhere near as valuable as having a proper, coherent plan to “level up” life chances. Avoiding a planning revolt won’t work unless houses really are built somewhere.

“Chaos isn’t that bad – it means people have to look to me to see who is in charge,” Cummings claimed the PM once told him. Will Rishi Sunak be the one to eventually call time on the chaos? Or will the voters?

Johnson’s lockdown this year shows the merits of telling it how it is, giving it to the public straight and making a really hard choice. But he’s got a long way to go before making a habit of it.

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Will Rishi Sunak Realise That Covid Isolation Is Just As Vital As Vaccination?

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When it emerged today that Dido Harding had indeed applied for the top job to run NHS England, the verdict from Labour’s Justin Madders was drier than the Sahara.

“I would hope that all candidates’ applications are judged on the basis of their recent performance in public sector roles, which in her case speaks for itself,” the shadow health minister said. “Failing which, Dominic Cummings WhatsApp ought to provide a candid assessment.”

Trying to replace NHS chief exec Sir Simon Stevens is certainly a bold move by the former head of Test and Trace. The litany of failures is well documented, but it’s worth a swift recap of some. The Commons Public Accounts committee said there was “no clear evidence” her organisation had cut Covid rates despite its huge cost (£22bn last year, £37bn over two years).

Former Treasury permanent secretary Nick Macpherson said Test and Trace “wins the prize for the most wasteful and inept public spending programme of all time”. The National Audit Office discovered the DHSC’s business case for the spending last year was “the avoidance of a second national lockdown”. (Narrator: a second, and third, national lockdown took place).

Harding is characteristically unabashed, however. She recently told Radio 4’s Woman’s Hour that her “one regret” was that the expectations for the service were “set too high”. She suggested that the big mistake at its conception was the hope that “testing and tracing and isolating, on its own, would stop the course of the disease”.

Part of the problem, almost certain to be highlighted in the forthcoming “lessons learned” report by the joint health and tech committees inquiry, was the lack of local expertise in contact tracing. While testing capacity was hugely expanded, much of that progress was undermined if each person’s contacts were not being tracked down quickly or effectively enough.

Yet the real clue to the problem lay in the organisation’s very name. It was always ‘Test and Trace’, never ‘Test, Trace and Isolate’. And all the tests in the world, and all the contact tracing in the world, count for nothing if at the end of the process there are large chunks of people failing to stay at home in self-quarantine.

As Jeremy Hunt has pointed out, there was such an obsession about the numbers of tests done per day that the government failed to focus on the metric that mattered: how many potentially infectious people were isolating. At times, the proportion of those who were not doing so was upto 40%.

To be fair to Harding, she eventually grasped this and admitted in February that perhaps as many as 20,000 people a day were ignoring calls to isolate. There are lots of reasons, from boredom to lack of shopping and childcare, for people breaking 10-day isolation. But lack of cash is certainly a key one, as many in public health will attest.

The Tory peer did manage to get some more state support, notably in offering £500 isolation payments for people on low incomes, often administered locally. But as with most means testing, the take up is far less than it would be if there was a universal, across the board, salary replacement system.

And the blame for that may ultimately lie with chancellor Rishi Sunak. When a flat-rate payment was floated earlier this year, the Treasury ruled it out on the grounds that the cost would be too high because of the sheer numbers who were getting Covid. That ignored both just how dynamic the situation was (the cost reduces as cases reduce) and also the huge savings to the public purse achieved by avoiding lengthy lockdowns.

This whole issue reignited today when Politico revealed emails from senior civil servants complaining that the furlough scheme was being used to help those temporarily off work because of Covid isolation. The most telling line, written in January at the height of the third wave, was this: “Incentive payments are too low to incentivise employees to take tests due to risk of loss of income.”

Even aside from using furlough more flexibly to cope with illness, the chancellor has refused repeated requests to increase statutory sick pay (the UK has one of the lowest rates in Europe).

That seems to be partly because of a fear (possibly misplaced given the government’s majority) that such a hike could not be reversed in future. Yet the sums needed for isolation payments are minor compared to the £37bn earmarked for Test and Trace.

Of course, surge testing still matters (and Test and Trace should get credit for its ability to help councils rapidly boost testing). So too does surge vaccination, although as Blackburn’s public health director today pointed out, jabbing the over-12s is desperately needed particularly in areas with high Asian populations, many of them young.

But it’s the lack of a surge in sick pay that is perhaps the most baffling part of the government’s response. With vaccine protection taking two weeks, getting the infected to swiftly stay at home arguably matters more even than getting them jabbed.

And with Chris Whitty warning today of an “exit wave” that will follow the July 19 unlocking, and “winter surge” later this year, the need for higher levels of self-isolation is as pressing as ever.

The economic risks of further possible lockdowns ought to be enough to prompt a rethink on isolation payments from Sunak, before he’s inevitably urged to do so by the parliamentary inquiry.

If not, he may just gift Keir Starmer the present he desperately needs to tie both No.10 and No.11 in a joint enterprise on Covid failures.

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Treasury ‘Suppressed’ Access To Furlough Payments For Workers Sick With Covid

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HANNAH MCKAY via Getty Images

Keir Starmer has hit out at claims that the government suppressed furlough funding for sick workers self-isolating at the height of the Covid pandemic.

The Labour leader waded into the row after it emerged that senior civil servants had complained that the Treasury was worried about publicising a relatively unknown provision in the furlough rules that allows temporary payments for staff forced to quarantine.

The Politico.eu website said it had seen emails, dated from January and February this year, showing that officials had complained about the failure to make employers and staff aware of the guidance.

“Furlough can be used to cover self-isolation, but [the Treasury] are reluctant to say this explicitly in guidance because it could lead to employees being furloughed who do not need to be,” one email read. “This is a live issue being worked through.”

One senior official explained in their complaint: “Incentive payments are too low to incentivise employees to take tests due to risk of loss of income.”

Both Downing Street and the Treasury insisted that the guidance was clear on the government’s own website that the furlough scheme had never been intended to be used as a substitute for statutory sick pay.

But Labour said the revelations were “shameful and reckless”, with Starmer adding he was “really concerned” about any suggestion of restricting cash help for home quarantine.

“One of the big issues for the 14 months or so we have been in the pandemic has been whether people feel that they can afford to self-isolate,” he told reporters during a visit to Airbus in Bristol.

“Self-isolation is a huge tool in the armoury when it comes to defeating the pandemic, but too many people felt that they couldn’t afford to self-isolate.

“We have been saying this for a year or more, so the idea now that this has been suppressed I think is so wrong in terms of how we fight this pandemic.”

Shadow Treasury minister Bridget Phillipson added: “It is shameful and reckless that the Chancellor ignored professional advice and put countless people and workplaces at unnecessary risk when he had the opportunity to help.”

The government guidance for firms makes clear that short-term illness or isolation “should not be a consideration when deciding if you should furlough an employee”.

But it adds: “If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee.”

Government sources said that the reason for the rules was that HM Revenue & Customs would have no mechanism or way of identifying those being furloughed for short term sickness, and it could open the whole scheme to fraud risk.

The prime minister’s official spokesperson said: “The guidance on Gov.uk sets out that the furlough scheme is not intended for short-term absences from work due to sickness and self-isolation should not be a consideration when a business is deciding if a business should furlough an employee.”

A Treasury spokesperson added: “It has always been clear that the purpose of the furlough scheme is to support jobs – we’ve been upfront about that from the start.

“We have a specific support package in place for those self-isolating due to coronavirus, including £500 one off payments for those on low incomes.

“If an employer wants to furlough an employee for business reasons and they are currently off sick then they are eligible to do so as with other employees. This has been set out in guidance since April last year.”

Separately, Downing Street tried to play down reports that ministers would legislate to allow a legal right to work from home because of the pandemic.

“We’ve asked people to work from home where they can during the pandemic but there are no plans to make this permanent or introduce a legal right to work from home,” the PM’s spokesperson said.

“There’s no plans to make working from home permanent or introduce a legal right to work from home.”

But he added the government was committed in its manifesto to a possible default right to flexible working. “What we’re consulting on is making flexible working a default option, unless employers have good reasons not to.”

He defined flexible working as “a range of working arrangements around time, place and hours of work including part-time working, flexi-time or compressed hours” but not necessarily working from home.

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Tax ‘Avoiding’ Firms Like Amazon Should Not Benefit From Post-Covid Subsidy, MPs Say

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Amazon and other multinational companies that shift profits to “avoid tax” in the UK should not benefit from Rishi Sunak’s post-Covid super deduction, MPs have said.

Senior Labour MP Dame Margaret Hodge is leading cross-party moves to ensure multinationals that shift profits to lower tax countries do not benefit from the taxpayer subsidy, designed to boost investment as the UK recovers from the coronavirus pandemic.

The super deduction announced by the chancellor in March’s Budget would allow companies to reduce their tax bills by up to 25p for every £1 they invest in plant and machinery, according to the Treasury.

Sunak hopes the 130% super deduction will boost business investment by £20bn a year and contribute to the UK’s economic recovery.

But analysis by campaigners TaxWatch suggests the likes of Amazon could use the super deduction to “entirely wipe out” their UK tax bill, which is already low as the company’s European operations are based in Luxembourg.

Hodge has teamed up with senior Tory MP Andrew Mitchell to propose a cross-party amendment to the finance bill, which will put the super deduction in law. 

She told HuffPost UK her super deduction amendment would ensure “our taxpayers’ money is not used to subsidise companies that deliberately avoid paying UK corporation tax”.

The former minister said: “We just think it is wrong that companies should be eligible for the super deduction scheme if they deliberately create financial structures which have no other purpose than to avoid tax, and if they deliberately export their profits.

“The way in which you can show that is by getting them to report their earnings country-by-country so you can see where the economic activity took place, and therefore where the profits were made, and therefore where they should be taxed.”

ADRIAN DENNIS via Getty Images

A ‘picker’ worker collects items from storage shelves as she collates a customer order inside an Amazon.co.uk fulfillment centre in Hemel Hempstead, north of London, in 2015

She added: “What really riles taxpayers – obviously it riles people that they don’t pay their tax – but what is absolutely unacceptable is that we should then subsidise them further with taxpayers’ money,” she said.

“It is just the pits, and most people think that, and the government should wake up and listen to them.”

The amendment would force large multinationals that want to access super deductions to make public their country-by-country reporting on global activities, profits and taxes.

The government in 2016 accepted a cross-party amendment to force those companies to produce country-by-country reports, but the government at the moment only requires them to be submitted to HM Revenue and Customs, rather than be made public.

Separately, Hodge and Mitchell also want to make it easier to prosecute so-called “enablers” who design tax avoidance schemes. 

Hodge argued that while individuals benefiting from such schemes are punished if they are found to be illegal, those that design them often get away “scot-free”.

She said: “If we start holding those enablers to account then you would much more quickly get rid of these egregious tax avoidance schemes which are constantly marketed.”

Mitchell told HuffPost UK: “We should really be moving towards a position where those who devise and set up these schemes are treated as guilty as those who use them.”

Amazon said it created 10,000 new jobs across the UK last year and has invested more than £23bn in the UK since 2010.

It paid £293m in direct taxes last year, as its sales surged 26% to £13.7bn.

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Boris Johnson Defends 1% NHS Pay Rise By Saying Times ‘Tough’

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Press Association

Prime minister Boris Johnson

Boris Johnson has claimed ministers gave NHS workers “as much as we can” as the angry backlash over the government’s proposed 1% pay rise offer continues. 

Speaking on a visit to a vaccination centre in Brent in north London, the prime minister would not be drawn on whether he would perform a U-turn over the proposed hike in pay for healthcare staff, who have been on the frontline during the Covid pandemic. 

Nurses and other staff who could be affected by the “insulting” rise were preparing to protest outside Downing Street, in London, and in Manchester, on Sunday afternoon. 

Pressed on the issue, Johnson said: “I’m massively grateful to all NHS staff and indeed to social care workers who have been heroic throughout the pandemic.

“What we have done is try to give them as much as we can at the present time.

“The independent pay review body will obviously look at what we’ve proposed and come back.” 

Asked if ministers could be forced into a U-turn over the pay offer, which is being looked at by an independent pay review board, Johnson said: “Don’t forget that there has been a public sector pay freeze, we’re in pretty tough times.

“We’ve tried to give the NHS as much as we possibly can and that means, in addition to the £140 billion of annual money, we’ve got another £62 billion we’ve found to help support the NHS throughout the crisis.

“My gratitude is overwhelming and I’m so grateful particularly to the nurses, and thankfully we are seeing more nurses now in our amazing NHS – there are 10,000 more nurses this year than there were last year.”

Speaking earlier on Sunday, education secretary Gavin Williamson said the offer was “part of a process”, suggesting the government could rethink the rise. 

Shown a video of prime minister Boris Johnson and Sunak clapping for carers during the pandemic, as hospitals and care homes were struggling to cope with the pandemic, BBC One presenter Andrew Marr put it to Williamson that the minuscule hike was “frankly an insult” to staff. 

“What we are having to deal with is incredibly challenging economic circumstances,” the education secretary said. 

Press Association

Ministers have offered NHS staff a 1% pay rise

“We have put forward a proposal. We have put forward what we believe that we can afford and it’s part of a process and that will sort of be looked at.

“But really, our focus is on making sure we recover from this pandemic.”

Pressed on a possible U-turn, he added: “We’ve stated that this is very much part of the process – what the government has put forward has been passed to an independent review.”

The “insulting” pay rise, reportedly insisted on by chancellor Rishi Sunak’s Treasury department, has provoked widespread anger. 

The British Medical Association (BMA), the Royal College of Midwives, the Royal College of Nursing and Unison have said in a letter to ministers that the pay deal “fails the test of honesty and fails to provide staff who have been on the very frontline of the pandemic the fair pay deal they need”.

The letter adds: “Our members are the doctors, nurses, midwives, porters, healthcare assistants and more, already exhausted and distressed, who are also expected to go on caring for the millions of patients on waiting lists, coping with a huge backlog of treatment as well as caring for those with Covid-19.”

Shadow foreign secretary Lisa Nandy said it was “reprehensible” for ministers not to recommend putting NHS pay up by more than 1%.

The senior Labour politician told Sky News” “The government, to be clear, is not planning a pay rise.

“That is a real-terms pay cut because it doesn’t keep up with inflation and for nurses to be offered a pay cut is just reprehensible in our view.

“In the NHS long-term plan, the government budgeted for a 2.1% pay rise – that is what nurses were promised and last year they legislated for that in order to give nurses a cast-iron guarantee that after years of seeing their real-terms pay fall, that the Government would finally reverse that decision and start to see their pay increase.

“We think they ought to go into these negotiations at a bare minimum of honouring that promise of a 2.1% (increase) and then consider what more they can offer to our NHS staff who have done so much to put their families and themselves at risk every day going into work – some of them have died.”

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Rishi Sunak’s Budget Explained In Two Minutes

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Chancellor Rishi Sunak has delivered his budget in the House of Commons as the UK plots a course out of the Covid crisis. 

Here are the key points. 

Furlough extended until September

The emergency wages scheme was due to close at the end of March, but Sunak has extended the UK-wide scheme until September. However, he will taper the Treasury’s 80% contribution from July. 

Universal Credit uplift to stay… for 6 months 

The £20-a-week uplift to Universal Credit will be extended for a further six months. But it is likely the government will continue to face pressure to make the uplift permanent.

Stealth income tax rise 

Sunak introduced a four-year freeze on income tax thresholds.

The move does not hike taxes as such, but will be viewed as a stealth tax in that it will drag employees into higher tax bands as their salaries rise. 

It has been suggested the freeze will bring an extra £6bn into the Treasury coffers. 

The pensions lifetime allowance, and the annual exempt amount in capital gains tax, will also be maintained at current levels until April 2026, he said. 

Hike in tax on big business

Sunak announced he will raise corporation tax, which is paid on company profits, from the current 19% to 25% in April 2023. 

Small businesses with profits of £50,000 or less will continue to be taxed at 19%.

The measure will be controversial among some low tax-backing Tory MPs. 

Sunak stressed the UK would till have lowest rate is the lowest in the G7, with France firms paying 33% and Germany’s 30%. 

Joe Biden’s new US administration is reportedly preparing to raise its corporation tax level from 21% to 28%. 

95% mortgages and stamp duty holiday 

Sunak said help for home-buyers is on its way with the return of 5% deposits. As part of a mortgage guarantee scheme on properties worth up to £600,000, the government will underwrite the remaining 95% of the loan.

He said it was a “policy that gives people who can’t afford a big deposit the chance to buy their own home”, adding: “As the prime minister has said, we want to turn generation rent into generation buy.”

In a separate move to bolster the property market, Sunak extended the stamp duty holiday on homes worth up to £500,000 until the end of June. 

Total cost of Covid hits £325bn

Sunak has pumped extra £1.65bn into the rollout of the Covid vaccination programme. 

He told MPs the total Covid-19 support package amounted to a staggering £352bn, or £407bn once other fiscal support is included.

He said: “Coronavirus has caused one of the largest, most comprehensive and sustained economic shocks this country has ever faced and, by any objective analysis, this government has delivered one of the largest, most comprehensive and sustained responses this country has ever seen.”

Covid-hit firms to share £5bn grant fund

Businesses hammered by Covid, such as shops, pubs, clubs, gyms and hair salons, can apply for grants of up to £18,000 as part of a £5bn scheme.

He added that the 5% reduced rate of VAT for the tourism and hospitality sector will be extended for six months to the end of September, with an interim rate of 12.5% for another six months after that.

Super deduction

The chancellor announced a new “super deduction” for companies investing after the Covid pandemic. He said the new measure for investing firms can see them reduce their tax bill by 130% of the cost.

Alcohol and fuel

All alcohol duties will be frozen for the second year in a row and the planned increase in fuel duty has also been cancelled, the chancellor said.

Contactless payment limit

The contactless payment limit is to more than double to £100 from £45. While legally in force from Wednesday, the increase will not happen immediately as firms will need to make systems changes.

Money for the Union

Sunak announced an increase in funding for the devolved administrations by £1.2bn for the Scottish government, amid growing demands for a second independence referendum.

He also announced £740m for the Welsh government and £410m for the Northern Ireland Executive.

Arts funding boost 

Sunak allocated £400m to help museums, galleries and especially theatres in England to reopen. 

This is in addition to the £1.57bn Culture Recovery Fund, established by Sunak and culture secretary Oliver Dowden. 

There will also be a £300m package for sports – much of it targeted at cricket.

Treasury jobs moved north 

Hundreds of jobs will be relocated from London to Darlington under the chancellor’s Treasury North project.

Sunak said that after “a lot of thought and energy”, the new economic campus would be in the north-east market town. 

Civic leaders across the north had made overtures in recent weeks for the Chancellor to send Treasury jobs their way.

A new £12bn UK infrastructure bank will be established in Leeds, with £10bn of government guarantees, Sunak added. 

Freeports announced

Sunak announced the establishment of a new set of freeports, something he claims was only possible post-Brexit. 

They are: East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside.

The policy will give tax breaks, cheaper customs and make planning regulations simpler for firms. 

Domestic violence cash boost

Sunak announced an extra £18m for domestic violence programmes. 

It comes after the Covid lockdown saw a rise in attacks and domestic violence killings. 

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Budget 2021: Rishi Sunak Unveils Tax ‘Super Deduction’ For Firms Investing After Covid

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Chancellor Rishi Sunak has unveiled a new “super deduction” for companies investing after the Covid pandemic.

Announcing his budget in the Commons, Sunak said when firms invest, his new policy would see them reduce their tax bill by 130% of the cost.

Sunak also revealed that the government will separately hike corporation tax on the profits of big business from 19% to 25% in April 2023, something which will make him unpopular with some low-tax Tory backbenchers. 

But insisting that the UK will have a “pro-business tax regime” after Covid, he told MPs the new super deduction will unlock investment and specifically reward firms with bold expansion plans in the wake of the pandemic.

Though little detail is yet clear about the new policy, Sunak said in the Commons: “While many businesses are struggling, others have been able to build up significant cash reserves. We need to unlock that investment, we need an investment-led recovery.

Press Association

Chancellor Rishi Sunak will unveil his budget on Wednesday 

“So today I can announce the ‘super deduction’. For the next two years, when companies invest they can reduce their tax bill, not just by a proportion of the cost of that investment, as they do now, or even by 100% of the cost, the so-called full expensing some have called for – with the super deduction they can now reduce their tax bill by 130% of the cost.”

It is forecast to boost business investment by 10%, or around £20 billion extra per year, Sunak said.

Sunak said the corporation tax rise will come in from April 2023 and only apply to 10% of companies. 

Smaller businesses with profits of £50,000 or less will be protected from the hike and will continue paying corporation tax at the current level of 19%, he said.

Sunak said it meant 1.4m business – around 70% of companies – “will be completely unaffected”.

The rise puts the UK above the EU average of 21.7% but remains below the US corporation tax level of 27%, though president Joe Biden has said he is looking to increase.

France’s rate is 26.5%, Germany has a rate at 30%, Canada at 26.5%, Japan at 30.62% and Italy at 24%, according to data from KPMG.

The chancellor also said a new UK Infrastructure Bank will be located in Leeds.

He told MPs: “The bank will invest across the UK in public and private projects to finance the green industrial revolution.”.

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Rishi Sunak Says ‘More’ Financial Support To Come In Budget

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Rishi Sunak has indicated he will extend emergency support packages as the coronavirus lockdown is unwound and did not deny he would first raise taxes before cutting them ahead of the election.

The chancellor insisted ahead of this week’s Budget that he is in favour of low taxes but said he needs to repair the public finances from the “shock” of the pandemic.

He did not deny telling Tory MPs in private that he would raise them now before cutting them in a pre-election Budget in the future.

Sunak said he must “level with people”, with Covid having had an “enormous hold on our economy” that will cause debt to “rise indefinitely” if borrowing continues after the recovery.

But he suggested current support packages for jobs and businesses, such as the furlough scheme, would continue as England comes out of the national lockdown in the coming months.

He said he wants to “support people and businesses along that path” to ending restrictions steadily until June 21, as set out by Boris Johnson.

“We went big, we went early and there’s more to come next week,” Sunak told Sky’s Sophy Ridge On Sunday.

The chancellor was pressed on whether he told Conservative MPs in private that he would seek to raise taxes now and then cut them before the election.

“I think in the short term what we need to do is protect the economy and keep supporting the economy through the road map, and over time what we need to do is make sure our public finances are sustainable,” Sunak said.

“That isn’t going to happen overnight, that’s going to be work that takes time given the scale of the shock that we’ve experienced but if you’re asking do I want to deliver low taxes for people, of course I do.”

Sunak said he cannot talk about tax outside the Budget and declined to say whether he would stick by the manifesto pledge not to raise the rate of income tax, VAT or national insurance.

Treasury sources did not deny a report suggesting the chancellor plans to raise £6 billion by freezing income tax thresholds for at least three years.

The Sunday Times said he would freeze the £12,500 point at which people start paying the basic rate of income tax and the £50,000 threshold where they begin paying the higher 40p rate, as he aims to raise £43 billion a year.

The move would allow Sunak to raise extra funds without breaking the manifesto pledge that guaranteed the Conservatives would not raise the “rate” of income tax.

But it was estimated the move would push an extra 1.6 million people into a higher tax bracket before the next general election is due in 2024.

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Rishi Sunak Hits The Pause Button As The Dominic Cummings Legacy Lives On

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Why Boris Johnson And Rishi Sunak Are Running A LastMinute.Com Government

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