Rishi Sunak is delivering his first Spring Statement in the Commons.
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Chancellor Rishi Sunak is delivering his Spring Statement to MPs. The Budget comes on a day when the Bank of England announced an interest rate cut to 0.25% to help mitigate the economic impact of the coronavirus.
Here’s the latest:
Mr Sunak sat down from his Budget statement at 1.37pm.
Mr Sunak pledged a package of measures to benefit the NHS including clamping down on “aggressive tax avoidance, evasion and non-compliance” with extra funding for HMRC to secure £4.4 billion of extra revenue.
The Chancellor said corporation tax will not be cut this year and will remain at 19%.
Mr Sunak announced a £1 billion building safety fund to ensure all unsafe combustible cladding is removed from buildings above 18 metres tall.
The Chancellor announced he was abolishing VAT on books, newspapers, magazines and academic journals from December 1.
Mr Sunak said he was providing every region in the country with funding for special 16-19 maths schools, an average of £25,000 per year for secondary schools to invest in arts activities and £30 million a year to improve PE teaching.
The Chancellor said he was committing to “the biggest ever investment in strategic roads and motorway” spending more than £27 billion.
The Chancellor said he will establish Treasury offices in Scotland, Wales and Northern Ireland and open a new “economic campus” in the north with more than 750 staff.
He said he will provide an additional £640 million for the Scottish Government, £360 million for the Welsh Government, £210 million for the Northern Ireland executive and £240 million for new city and growth deals.
Mr Sunak said 30,000 hectares of trees will be planted over the next five years and 35,000 hectares of peatland will be restored.
Mr Sunak said he will make £120 million available immediately to repair all defences damaged in the winter floods.
He added he will provide £200 million directly to local communities to build flood resilience and will double investment in flood defences over the next six years to £5.2 billion.
Mr Sunak said he would freeze the levy on electricity from April 2022 and raise the levy on gas to help tackle the climate crisis.
He said he will introduce a “plastics packaging tax” charging manufacturers and importers £200 per tonne on packaging made of less than 30% of recycled plastic.
Mr Sunak said research and development investment will be increased to £22 billion a year.
£1.4 billion will be invested in the science institute at Weybridge, which is analysing samples of cornavirus, and more than £900 million in nuclear fusion, space and electric vehicles.
Mr Sunak said research and development investment would be increased to £22 billion a year.
Beer duty will also be frozen, the Chancellor said, as he confirmed that the tampon tax would be abolished.
Mr Sunak announced that fuel duty will remain frozen for another year.
The planned increase in spirits duty will be cancelled and duties for cider and wine drinkers will be frozen as well.
The National Insurance threshold will increase from £8,632 to £9,500.
The Chancellor said ministers would publish a new remit for the independent Low Pay Commission to have a formal target of the National Living Wage reaching two-thirds of median earnings by 2024 “as long as economic conditions allow” – a rate of more than £10.50 an hour.
Mr Sunak met Bank of England governor Mark Carney this morning ahead of the Commons statement.
Mr Sunak said the OBR forecasts that headline debt will be lower at the end of this parliament than it is currently, falling from 79.5% this year to 75.2% in 2024/25.
The Chancellor said the OBR reports that borrowing will then fall to 2.5%, 2.4% and 2.2% in the following years.
The Chancellor said the OBR reports a current budget surplus in every one of the next five years, with borrowing increasing from 2.1% of GDP in 2019/20 to 2.4% in 2020/21 and 2.8% in 2021/22.
The Chancellor said that without accounting for the impact of coronavirus, the Office for Budget Responsibility has forecast growth of 1.1% in 2020, 1.8% in 2021 and then 1.5%, 1.3%, and 1.4% in the following years.
Mr Sunak said the Office for Budget Responsibility has “slightly reduced” its forecast for GDP growth compared with its March 2019 forecast.
Mr Sunak said he was setting aside a £5 billion emergency response fund to support the NHS and other public services, adding he “will go further if necessary”.
The Chancellor said the Government will meet the cost for businesses with fewer than 250 employees, to provide statutory sick pay to those off work “due to coronavirus”.
Mr Sunak said: “Those on contributory employment and support allowance will be able to claim from day one instead of day eight to make sure that time spent off work due to sickness is reflected in your benefits. I’m also temporarily removing the minimum income floor in Universal Credit.”
Mr Sunak said that “whatever extra resources our NHS needs” to cope with the coronavirus “it will get”.
The Chancellor said the Government’s response to the coronavirus will be “temporary, timely and targeted” and designed to have “maximum impact”.
Mr Sunak said there is likely to be “temporary disruption” to the economy while up to a fifth of the working age population could be off at any one time.
Mr Sunak said “we are doing everything we can to keep this country and our people healthy and financially secure” as he delivered his Budget against the backdrop of the coronavirus crisis.
The Chancellor of the Exchequer rose to deliver his Budget to the House of Commons at 12.34pm.
Labour figures have called on the Chancellor to offer support for residents forced to pay for cladding removal from their flats.
Mr Sunak with departmental colleagues on Downing Street.
Mr Sunak has left 11 Downing Street to head to the House of Commons.
Mr Sunak told the Cabinet his Budget’s measures to cope with Covid-19 “will make the UK one of the best placed economies in the world to manage the potential impact of the virus”, Downing Street said.
The economy stayed flat in January despite predictions that it would grow by 0.2% following a tough year, figures showed.
The Office for National Statistics said GDP remained unchanged after growing 0.3% in December, dashing hopes that the economy was bouncing back after a clear win for the Conservatives in December’s election.
The Bank of England announced an emergency interest rate cut to help the UK cope with the economic shock from coronavirus as Rishi Sunak prepared to unveil his first Budget.
Hours before he was due to unveil his package, the Bank set the scene with the rate cut from 0.75% to 0.25% and a series of other measures to help businesses and households through an economic shock “that could prove sharp and large, but should be temporary”.