Rishi Sunak’s Budget 2021 speech in full

Rishi Sunak’s Budget 2021 speech in full

Here is the speech in full.

Madam Deputy Speaker,
A year ago, in my first Budget, I announced our initial response to coronavirus.
What was originally thought to be a temporary disruption to our way of life has fundamentally altered it.
People are still being told to stay in their homes; businesses have been ordered to close; thousands of people are in hospital.
Much has changed.
But one thing has stayed the same.
I said I would do whatever it takes; I have done; and I will do so.
We have announced over £280 billion of support, protecting jobs, keeping businesses afloat, helping families get by.
Despite this unprecedented response, the damage coronavirus has done to our economy has been acute.
Since March, over 700,000 people have lost their jobs.
Our economy has shrunk by 10% – the largest fall in over 300 years.
Our borrowing is the highest it has been outside of wartime.
It’s going to take this country – and the whole world – a long time to recover from this extraordinary economic situation.
But we will recover.
This Budget meets the moment with a three-part plan to protect the jobs and livelihoods of the British people.
First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis.
Second, once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that.
And, third, in today’s Budget we begin the work of building our future economy.

 

Madam Deputy Speaker,
Today’s forecasts show that our response to coronavirus is working.
The prime minister last week set out our cautious but irreversible roadmap to ease restrictions whilst protecting the British people.
The NHS, deserving of immense praise, has had extraordinary success in vaccinating more than 20 million people across the United Kingdom.
And combined with our economic response, one of the most comprehensive and generous in the world, this means the Office for Budget Responsibility are now forecasting, in their words:
“A swifter and more sustained recovery” than they expected in November.
The OBR now expect the economy to return to its pre-covid level by the middle of next year – six months earlier than previously thought.
That means growth is faster, unemployment lower, wages higher, investment higher, household incomes higher.
But while our prospects are now stronger, coronavirus has done and is still doing profound damage.
And today’s forecasts make clear repairing the long-term damage will take time.
The OBR still expect that in five years’ time, because of coronavirus, our economy will be 3% smaller than it would have been.
Before I share the detail of the OBR’s forecasts, let me thank Richard Hughes and his team for their work.
The OBR forecast that our economy will grow this year by 4%, by 7.3% in 2022, then 1.7%, 1.6% and 1.7% in the last three years of the forecast.
And the OBR have said that our interventions to support jobs have worked.
In July last year, they expected unemployment to peak at 11.9%. Today, because of our interventions, they forecast a much lower peak: 6.5%.
That means 1.8 million fewer people are expected to be out of work than previously thought.
But every job lost is a tragedy, which is why protecting, creating and supporting jobs remains my highest priority.

 

So, Madam Deputy Speaker,
Let me turn straight away to the first part of this Budget’s plan: to protect the jobs and livelihoods of the British people through the remaining phase of this crisis.
First, the furlough scheme will be extended until the end of September.
For employees, there will be no change to the terms – they will continue to receive 80% of their salary, for hours not worked, until the scheme ends.
As businesses reopen, we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees.
Nothing will change until July, when we will ask for a small contribution of just 10% and 20% in August and September.
The government is proud of the furlough – one of the most generous schemes in the world, effectively protecting millions of people’s jobs and incomes.

 

Second, support for the self-employed will also continue until September with a fourth grant covering the period February to April, and a fifth and final grant from May onwards.
The fourth grant will provide three months of support at 80% of average trading profits.
For the fifth grant, people will continue to receive grants worth three months of average profits, with the system open for claims from late July.
But as the economy reopens over the summer, it is fair to target our support towards those most affected by the pandemic.
So people whose turnover has fallen by 30% or more will continue to receive the full 80% grant.
People whose turnover has fallen by less than 30% will therefore have less need of taxpayer support and will receive a 30% grant.
And I can also announce a major improvement in access to the self-employed scheme.
When the scheme was launched, the newly self-employed couldn’t qualify because they hadn’t all filed the 2019-20 tax return.
But as the tax return deadline has now passed, I can announce today that, provided they filed a tax return by midnight last night, over 600,000 more people, many of whom became self-employed last year can now claim the fourth and fifth grants.
Over the course of this crisis, we will have spent £33bn supporting the self-employed; one of the most generous programmes for self-employed people anywhere in the world.

 

Third, we’re also extending our support for the lowest paid and most vulnerable.
To support low-income households, the Universal Credit uplift of £20 a week will continue for a further six months, well beyond the end of this national lockdown.
We’ll provide Working Tax Credit claimants with equivalent support for the next six months.
And Because of the way that system works operationally, we will need to do so with a one-off payment of £500.
And over the course of this year, as the economy begins to recover, we are shifting our resources and focus towards getting people into decent, well-paid jobs.
We reaffirm our commitment to end low pay, increasing the National Living Wage to £8.91 from April – an annual pay rise of almost £350 for someone working full time on the National Living Wage.
And My Right Honourable Friends the Education Secretary and the Work and Pensions Secretary, are taking action to give people the skills they need to get jobs or get better jobs:
The Restart programme – supporting over a million long term unemployed people.
The number of work coaches – doubled.
The Kickstart scheme – funding high quality jobs for over a quarter of a million young people.
The Prime Minister’s Lifetime Skills Guarantee – giving every adult the opportunity for a fully-funded Level 3 qualification.
And we want businesses to hire new apprentices so we’re paying them more to do it.
Today, I am doubling the incentive payments we give businesses to £3,000 – that’s for all new apprentice hires, of any age.
Alongside investing £126 million of new money to triple the number of traineeships we’re taking what works to get people into jobs and making it better.

 

Madam Deputy Speaker,
One of the hidden tragedies of lockdown has been the increase in domestic abuse.
So I’m announcing today an extra £19 million – on top of the £125 million we announced at the Spending Review – for domestic violence programmes to reduce the risk of reoffending, and to pilot a network of ‘Respite Rooms’ to provide specialist support for vulnerable homeless women.
To recognise the sacrifices made by so many women and men in the Armed Forces community, I’m providing an additional £10 million to support veterans with mental health needs.
And, on current plans, the funding to support survivors of the Thalidomide scandal runs out in 2023.
They deserve better than to have constant uncertainty about the future costs of their care.
So not only will I extend this funding with an initial down payment of around £40 million; I am today announcing a lifetime commitment, guaranteeing funding forever.
And let me thank the Thalidomide Trust and the Honourable Member for North Dorset for their leadership on this important issue.
As well as supporting people’s jobs, incomes, the lowest paid and most vulnerable, this Budget also protects businesses.
We’ve been providing businesses with direct cash grants through the recent restrictions. These grants come to an end in March.
I can announce today that we will provide a new Restart Grant in April, to help businesses reopen and get going again.
Non-essential retail businesses will open first, so they’ll receive grants of up to £6,000 per premises.
Hospitality and leisure businesses, including personal care and gyms, will open later, or be more impacted by restrictions when they do, so we’ll give them grants of up to £18,000.
That’s £5 billion of new grants; on top of the £20 billion we’ve already provided; taking our direct total cash support to business to £25 billion.
And I pay tribute to My Right Honourable Friend the Member for Romsey and Southampton North for highlighting the particular needs of the personal care sector.
And, with My Right Honourable Friend the Culture Secretary, we’re making available £700 million to support our incredible arts, culture and sporting institutions as they reopen;
Backing the United Kingdom and Ireland’s joint 2030 World Cup bid, launching a new approach to apprenticeships in the creative industries, and extending our £500 million film and TV production restart scheme.

 

Even with the new Restart Grants, some businesses will also need loans to see them through.
As the Bounce Back Loan and CBIL programmes come to an end, we’re introducing a new Recovery Loan Scheme to take their place.
Businesses of any size can apply for loans from £25,000 up to £10 million, through to the end of this year.
And the government will provide a guarantee to lenders of 80%.
Last year, we provided an unprecedented 100% business rates holiday, in England, for all eligible businesses in the retail, hospitality and leisure sectors – a tax cut worth £10 billion.
This year, we’ll continue with the 100% business rates holiday for the first three months of the year, in other words, through to the end of June.
For the remaining nine months of the year, business rates will still be discounted by two thirds, up to a value of £2 million for closed businesses, with a lower cap for those who have been able to stay open.
A £6 billion tax cut for business.
One of the hardest hit sectors has been hospitality and tourism: 150,000 businesses that employ over 2.4 million people need our support.
To protect those jobs, I can confirm that the 5% reduced rate of VAT will be extended for six months to 30th September.
And even then, we won’t go straight back to the 20% rate.
We’ll have an interim rate of 12.5% for another six months; not returning to the standard rate until April of next year.
In total, we’re cutting VAT next year by almost £5 billion.

 

Madam Deputy Speaker,
The housing sector supports over half a million jobs.
The cut in stamp duty I announced last summer has helped hundreds of thousands of people buy a home and supported the economy at a critical time.
But due to the sheer volume of transactions we’re seeing, many new purchases won’t complete in time for the end of March.
So I can announce today the £500,000 nil rate band will not end on the 31st of March, it will end on the 30th of June.
Then, to smooth the transition back to normal, the nil rate band will be £250,000, double its standard level, until the end of September – and we will only return to the usual level of £125,000 from October 1st.
Even with the stamp duty cut, there is still a significant barrier to people getting on the housing ladder – the cost of a deposit.
So I’m announcing today a new policy to stand behind homebuyers: a mortgage guarantee.
Lenders who provide mortgages to home buyers who can only afford a five percent deposit, will benefit from a government guarantee on those mortgages.
And I’m pleased to say that several of the country’s largest lenders including Lloyds, NatWest, Santander, Barclays and HSBC will be offering these 95% mortgages from next month, and I know more, including Virgin Money will follow shortly after.
A policy that gives people who can’t afford a big deposit the chance to buy their own home.
As the Prime Minister has said, we want to turn Generation Rent into Generation Buy.

 

So, Madam Deputy Speaker,
The furlough – extended to September.
Self-employed grants – extended to September.
Universal Credit uplift – extended to September.
More money to tackle domestic violence.
Bigger incentives to hire apprentices.
Higher grants to struggling businesses.
Extra funds for culture, arts and sport.
New loan schemes to finance businesses.
Kickstart, Restart, a Lifetime Skills Guarantee.
Business rates – cut.
VAT – cut.
Stamp duty – cut.
And a new mortgage guarantee.
The first part of a Budget that protects the jobs and livelihoods of the British people.

 

And, Madam Deputy Speaker,
As you can see, we’re going long, extending our support well beyond the end of the Roadmap…
…to accommodate even the most cautious view about the time it might take to exit the restrictions.
Let me summarise for the House the scale of our total fiscal response to coronavirus.
At this Budget we are announcing an additional £65 billion of measures over this year and next to support the economy in response to coronavirus.
Taking into account the significant support announced at the Spending Review 20, this means our total COVID support package, this year and next, is £352 billion.
Once you include the measures announced at Spring Budget last year, including the step change in capital investment, total fiscal support from this Government over this year and next amounts to £407 billion.
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.

 

So, Madam Deputy Speaker,
We’re using the full measure of our fiscal firepower to protect the jobs and livelihoods of the British people.
But the damage done by coronavirus, combined with a level of support unimaginable only twelve months ago, has created huge challenges for our public finances.
The OBR’s fiscal forecasts show that this year, we have borrowed a record amount: £355 billion.
That’s 17% of our national income, the highest level of borrowing since World War Two.
Next year, as we continue our unprecedented response to this crisis, borrowing is forecast to be £234 billion, 10.3% of GDP – an amount so large it has only one rival in recent history; this year.
Without corrective action, borrowing would continue at very high levels, leaving underlying debt rising indefinitely.
Instead, because of the steps I am taking today, borrowing falls to 4.5% of GDP in 22-23, 3.5% in 23-24, then 2.9% and 2.8% in the following two years.
And while underlying debt rises from 88.8% of GDP this year to 93.8% next year, it then peaks at 97.1% in 2023-24, before stabilising and falling slightly to 97% and 96.8% in the final two years of the forecast.
Let me explain why this matters.
The amount we’ve borrowed is comparable only with the amount we borrowed during the two world wars.
It is going to be the work of many governments, over many decades, to pay it back.
Just as it would be irresponsible to withdraw support too soon, it would also be irresponsible to allow our future borrowing and debt to rise unchecked.
When crises come, we need to be able to act.
And we need the fiscal freedom to act.
A freedom that you only have if you start with public finances in a good and strong place.

 

When the next crisis comes, we need to be able to act again.
And while our borrowing costs are affordable right now, interest rates and inflation may not stay low for ever; and just a 1% increase in both would cost us over £25 billion.
And as we have seen in the markets over the last few weeks, sovereign bond yields can rise sharply.
This Budget is not the time to set detailed fiscal rules, with precise targets and dates to achieve them by – I don’t believe that would be sensible.
But I do want to be honest about what I mean by sustainable public finances, and how I plan to achieve them.
Our fiscal decisions are guided by three principles.
First, while it is right to help people and businesses through an acute crisis like this one, in normal times the state should not be borrowing to pay for everyday public spending.
Second, over the medium term, we cannot allow our debt to keep rising, and, given how high our debt now is, we need to pay close attention to its affordability.
And third, it is sensible to take advantage of lower interest rates to invest in capital projects that can drive our future growth.
So the question is how we achieve that; how we balance the extraordinary support we are providing to the economy right now, with the need to begin the work of fixing our public finances.
I have and always will be honest with the country about the challenges we face.
So I’m announcing today two measures to begin that work.
Let me take each in turn.

 

Madam Deputy Speaker,
Our response to coronavirus has been fair, with the poorest households benefiting the most from our interventions.
And our approach to fixing the public finances will be fair too, asking more of those people and businesses who can afford to contribute and protecting those who cannot.
So this government is not going to raise the rates of income tax, national insurance, or VAT.
Instead, our first step is to freeze personal tax thresholds.
We’ve nearly doubled the income tax personal allowance over the last decade, making it the most generous of any G20 country.
We will of course deliver our promise to increase it again next year to £12,570, but we will then keep it at this more generous level until April 2026.
The Higher Rate threshold will similarly be increased next year, to £50,270, and will then also remain at that level for the same period.
Nobody’s take home pay will be less than it is now, as a result of this policy.
But I want to be clear with all Members that this policy does remove the incremental benefit created had thresholds continued to increase with inflation.
We are not hiding it, I am here, explaining it to the House and it is in the Budget document in black and white.
It is a tax policy that is progressive and fair.
And, I will also maintain, at their current levels, until April 2026:
The inheritance tax thresholds.
The pensions lifetime allowance.
The annual exempt amount in capital gains tax.
And, for two years from April 2022, the VAT registration threshold which, at £85,000, will remain more than twice as generous as the EU and OECD averages.
We’ll also tackle fraud in our Covid schemes, with £100m to set up a new HMRC taskforce of around 1,000 investigators as well as new measures, and new investment in HMRC, to clamp down on tax avoidance and evasion.
The full details are set out in the Red Book.

 

Madam Deputy Speaker,
The government is providing businesses with over £100 billion of support to get through this pandemic, so it is fair and necessary to ask them to contribute to our recovery.
So the second step I am taking today is that in 2023, the rate of corporation tax, paid on company profits, will increase to 25%.
Even after this change the United Kingdom will still have the lowest corporation tax rate in the G7 – lower than the United States, Canada, Italy, Japan, Germany and France.
We’re also introducing some crucial protections.
First, this new higher rate won’t take effect until April 2023, well after the point when the OBR expect the economy to have recovered.
And even then, because corporation tax is only charged on company profits, any struggling businesses will, by definition, be unaffected.
Second, I’m protecting small businesses with profits of £50,000 or less, by creating a Small Profits Rate, maintained at the current rate of 19%.
This means around 70% of companies – 1.4 million businesses – will be completely unaffected.
And third, we will introduce a taper above £50,000, so that only businesses with profits of a quarter of a million or greater will be taxed at the full 25% rate.
That means only 10% of all companies will pay the full higher rate.
So yes, it’s a tax rise on company profits. But only on the larger, more profitable companies. And only in two years’ time.
And I wanted to announce this now because I think for business, certainty matters.
For the next two years, I’m also making the tax treatment of losses significantly more generous by allowing businesses to carry back losses of up to £2 million for three years providing a significant cash flow benefit. This means companies can now claim additional tax refunds of up to £760,000.
And because of the current 8% bank surcharge, the implied overall tax rate for banks would be too high.
So we will review the surcharge, to make sure the combined rate of tax on the United Kingdom banking sector doesn’t increase significantly from its current level and to make sure this important industry remains internationally competitive.

 

Madam Deputy Speaker,
These are significant decisions to have taken.
Decisions no Chancellor wants to make.
I recognise they might not be popular.
But they are honest.
And let’s consider the alternatives.
The first is to do nothing.
To leave our deficit problem untreated.
Our debt problem for someone else in future to deal with.
And nor do I believe it can be the way of a responsible chancellor.
Another alternative would be to try to find all the savings we need from public spending.
The only other alternative would be to increase the rates of tax on working people – but I don’t believe that would be right either.
So I believe our approach, while bold, is compatible with our duty as a fiscally responsible and business friendly government.
This is the right choice and I’m confident it will command public assent.

 

I have one final announcement on business tax.
With the lowest corporation tax in the G7, and a new, small profits rate, the United Kingdom will have a pro-business tax regime.
But we need to do even more to encourage businesses to invest right now.
Business investment creates jobs, lifts growth, spurs innovation and drives productivity.
For decades we’ve lagged behind our international peers.
Right now, 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.
So today I can announce the ‘Super Deduction’.
For the next two years, when companies invest, they can reduce their taxable profits not just by a proportion of the cost of that investment, as they do now or even by 100% of their cost, the so-called full expensing some have called for, with the Super Deduction they can now reduce their taxable profits* by 130% of the cost.
Let me give the House an example.
Under the existing rules, a construction firm buying £10 million of new equipment could reduce their taxable income, in the year they invest, by just £2.6 million.
With the Super Deduction, they can now reduce it by £13 million.
We’ve never tried this before in our country.
The OBR have said it will boost business investment by 10%; around £20 billion more per year.
It makes our tax regime for business investment truly world-leading, lifting us from 30th in the OECD, to 1st.
And, worth £25 billion during the two-years it is in place this will be the biggest business tax cut in modern British history.
Bold, unprecedented action.
To get companies investing.
Creating jobs.
And driving our economic recovery.

 

Madam Deputy Speaker,
Let me now turn to duties.
This is a tough time for hospitality.
So I can confirm that the planned increases in duties for:
Spirits like scotch whisky.
Wine.
Cider.
And beer, will all be cancelled. All alcohol duties frozen for the second year in a row – only the third time in two decades.
And right now, to keep the cost of living low, I’m not prepared to increase the cost of a tank of fuel.
So the planned increase in fuel duty is also cancelled.

 

Madam Deputy Speaker,
This Budget protects the jobs and livelihoods of the British people.
This Budget is honest about the challenges facing our public finances, and how we will begin to fix them.
And this Budget does one other thing:
It lays the foundations of our future economy – the third part of our plan.
If we want a better future economy, we have to make it happen.
We have to do things that have never been done before.
The world is not going to be any less competitive after coronavirus.
So it’s not enough to have some general desire to grow the economy.
We need a real commitment to green growth.
It’s not enough to have a general desire to increase productivity.
We need a real commitment to give every business, large or small, the opportunity to grow, innovate and succeed.
It’s not enough to have a general desire to create jobs.
We need a real commitment to create jobs where people are and change the economic geography of this country.
And we can’t strengthen our domestic economy without remaining a global, outward-looking nation.
This future economy won’t be created in any one Budget, but today we lay the foundations.

 

Madam Deputy Speaker,
Our future economy needs investment in green industries across the United Kingdom.
So I can announce today the first ever UK Infrastructure Bank.
Located in Leeds, the Bank will invest across the United Kingdom in public and private projects to finance the green industrial revolution.
Beginning this spring, it will have an initial capitalisation of £12 billion and we expect it to support at least £40 billion of total investment in infrastructure.
Offshore wind is an innovative industry where the United Kingdom already has a global competitive advantage.
So we’re funding new port infrastructure to build the next generation of offshore wind projects in Teesside and Humberside.
And in November I announced we would launch a world-leading Sovereign Green Bond.
Today we’re going further, announcing a new, retail savings product to give all United Kingdom savers the chance to support green projects.
We’ve also asked Dame Clara Furse to establish a new group to position the City as the global leader for voluntary, high quality carbon offset markets.
And underpinning all of this will be an updated monetary policy remit for the Bank of England.
It reaffirms their 2% target.
But now, it will also reflect the importance of environmental sustainability and the transition to net zero.

 

Madam Deputy Speaker,
Our future economy will also address our productivity problem and support small businesses.
Too often smaller firms don’t have the time or resources to acquire the extra skills and training they need to be more efficient, more digital, and more productive.
Thanks to Be the Business, we have made a good start at supporting these firms.
Today, the Business Secretary and I are going further with a new set of UK-wide schemes: Help to Grow.
First, Help to Grow: Management will help tens of thousands of small and medium sized businesses get world-class management training.
Dozens of business schools across the United Kingdom will offer a new executive development programme with mentoring and peer learning, and government will contribute 90% of the cost.
A real commitment to learn more, make more and earn more.
Second, Help to Grow: Digital.
With the pandemic, many businesses have moved online. This has been a challenge. But we want to turn it into an opportunity.
We’re going to help small businesses develop digital skills by giving them free expert training and a 50% discount on new productivity-enhancing software, worth up to £5,000 each.
Both programmes will commence by the autumn; and I’d urge interested businesses to register today on gov.uk/HelpToGrow.
A real commitment to help over a hundred thousand businesses become more innovative, more competitive and more profitable.

 

Madam Deputy Speaker,
A future economy requires us to be at the forefront of the next scientific and technological revolutions.
Becoming a scientific superpower is something we can be; I don’t think that’s hubristic or unrealistic.
Our incredible vaccination programme has shown the world what this country is capable of.
So I’m providing an extra £1.6 billion today to continue the rollout and improve our future preparedness.
And I want to make the United Kingdom the best place in the world for high growth, innovative companies.
So I’m launching two wide-ranging consultations today: to make sure our research and development tax reliefs – and our Enterprise Management Incentives – are internationally competitive.
And, My Right Honourable Friend the Home Secretary knows that a scientific superpower needs scientific superstars so together we’re announcing ambitious, visa reforms aimed at highly skilled migrants, including:
A new unsponsored points-based visa to attract the best and most promising international talent in science, research and tech.
New, improved visa processes for scale-ups and entrepreneurs.
And radically simplified bureaucracy for high skilled visa applications.
Now as well as support for innovation and access to talent, high growth firms need access to capital.
To do that, we’re taking steps to give the pensions industry more flexibility to unlock billions of pounds from pension funds into innovative new ventures launching a new Future Fund Breakthrough, to help fill the scale-up funding gap and changing the rules to encourage more companies to list here.
Let me thank Lord Hill for leading this landmark review, the FCA will be consulting on his proposals very shortly.

 

Madam Deputy Speaker,
Our future economy depends on remaining a United Kingdom.
Millions of families and businesses in Scotland, Wales and Northern Ireland have contributed to and benefitted from our coronavirus response.
And central to that has been a Treasury that acts for the whole United Kingdom.
That’s not a political point, it’s an undeniable truth.
The majority of today’s Budget measures will apply directly to people in all four nations of the United Kingdom.
And I’m taking further specific steps, with:
Three accelerated Scottish City and Growth Deals in Ayrshire, Argyll and Bute, and Falkirk;
Three more in North Wales, Mid Wales, and Swansea Bay;
And funding for the Holyhead hydrogen hub.
The Global Centre of Rail Excellence in Neath Port Talbot.
The Aberdeen Energy Transition Zone.
As well as the Global Underwater Hub and the North Sea transition deal.
Along with the first allocations of the £400m New Deal for Northern Ireland.
And through the Barnett formula, the decisions I’m taking in this Budget also increase the funding for the devolved administrations, by:
£1.2 billion in Scotland;
£740 million in Wales;
And £410 million for the Northern Ireland executive.

 

And Madam Deputy Speaker,
Our future economy demands a different economic geography.
If we are serious about wanting to level up, that starts with the institutions of economic power.
Few institutions are more powerful than the one I am enormously privileged to lead – the Treasury.
Along with the other critical economic departments, including BEIS, DIT, and MHCLG, we will establish a new economic campus in Darlington.
Redrawing our economic map means rebalancing our economic investment.
I have already revised the Treasury’s Green Book; and set out the highest sustained levels of public investment across the United Kingdom since the 1970s.
But we can go further.
I’m announcing today over a billion for 45 new Towns Deals.
From Castleford to Clay Cross; Rochdale to Rowley Regis; and Whitby to Wolverhampton.
And let me pay tribute to local leaders like the brilliant Mayor for the West Midlands, Andy Street, who are making the case for investment in their area.
We’re also creating a £150 million fund, to help communities across the United Kingdom take ownership of pubs, theatres, shops, or local sports clubs at risk of loss – putting more power in the hands of local people.
And I am launching the first round of the Levelling Up Fund today, inviting applications from local areas across the United Kingdom.
And I’m grateful to My Right Honourable Friends the Transport Secretary and the Communities Secretary for their support on this crucial initiative.

 

Madam Deputy Speaker,
I have one final announcement that exemplifies the future economy.
A policy on a scale we’ve never done before;
A policy to bring investment, trade, and, most importantly, jobs, right across this country.
To replace the industries of the past with green, innovative, fast growing new businesses.
To encourage free trade and reinforce our position as an outward-looking, trading nation, open to the world.
A policy we can only pursue now we’re outside the European Union:
Freeports.
Freeports are special economic zones with different rules to make it easier and cheaper to do business.
They’re well-established internationally, but we’re taking a unique approach.
Our Freeports will have:
Simpler planning – to allow businesses to build;
Infrastructure funding – to improve transport links;
Cheaper customs – with favourable tariffs, VAT or duties;
And lower taxes – with tax breaks to encourage construction, private investment and job creation.
An unprecedented economic boost across the United Kingdom.
Freeports will be a truly UK-wide policy – and we’ll work constructively with the Scottish, Welsh and Northern Irish administrations.
Today, I can announce the eight freeport locations in England:
East Midlands Airport.
Felixstowe and Harwich.
Humber.
Liverpool City Region.
Plymouth.
Solent.
Thames.
And Teesside.
Eight new Freeports in eight English regions unlocking billions of pounds of private sector investment, generating trade and jobs up and down the country.
I commend Members from across the House for their campaigning.

 

Madam Deputy Speaker,
Let’s take just one of those places – Teesside.
In the past, it was known for its success in industries like steel.
Now, when I look to the future of Teesside I see old industrial sites being used to capture and store carbon.
Vaccines being manufactured.
Offshore wind turbines creating clean energy for the rest of the country.
All located within a Freeport with the Treasury just down the road and the UK Infrastructure Bank only an hour away.
I see innovative, fast-growing businesses hiring local people into decent, well-paid, green jobs.
I see people designing, manufacturing and exporting incredible new products and services.
I see people putting down roots in places they are proud to call home.
I see a people optimistic and ambitious for their future.
That, Madam Deputy Speaker, is the future economy of this country.
And so, whilst this last year has been a test unlike any other, that which we are, we are.
The fundamentals of our character as a people have not changed.
Still determined. Still generous. Still fair.
That’s what got us through the last year; it’s what will guide us through the next decade and beyond.
This time last year we set out to deliver on the promises we made to the British people.
But the most important promise was implicit and, in truth, is made by every government, irrespective of their politics.
And that is to do what must be done, when the danger is imminent, and when no one else can.
Today we set out a plan to protect the jobs and livelihoods of the British people, but the promises that underpin that plan, remain unchanged from those we pledged ourselves to twelve long months ago.
To unite and lead.
To level up.
To create a world class education system.
To keep our streets safe.
To keep our NHS strong.
To support the most vulnerable.
To reform and improve public services.
To grow the economy.
To spread prosperity.
To extend the awesome power of opportunity to all corners of the United Kingdom.
And, yes to be honest and fair in all that we do.

 

Madam Deputy Speaker.
An important moment is upon us.
A moment of challenge and of change.
Of difficulties, yes, but of possibilities too.
This is a Budget that meets that moment.
And I commend it to the House.

 

Big banks poised to launch 95 per cent government-backed mortgages

Big banks poised to launch 95 per cent government-backed mortgages

 

The scheme will be open to home buyers with a five per cent deposit, not just first-time buyers, for properties worth up to £600,000. It has been largely modelled on the previous Help to Buy scheme launched in 2013 to help lenders transition back in to the market, and is open to second hand properties not just new-build.

Sunak confirmed the UK’s biggest banks are poised to lend on the scheme from mid-April, include Lloyds, NatWest, Santander, Barclays and HSBC with Virgin Money readying to launch in May.

All mortgages will need to be repayment, not interest-only on a loan to value of between 91 to 95 per cent and are subject to the usual affordability rules. All participating lenders will also be required to offer a five-year fixed rate product as part of its guaranteed range of mortgages.

He said: “To quote the Prime Minister, we will turn generation rent into generation buy.”

HSBC’s head of buying a home, Michelle Andrews, said: “We’re delighted to once again be supporting the Government Help to Buy scheme. Here at HSBC UK we’re committed to supporting people to get on to, or move up the property ladder. This scheme will make a real difference in enabling more first-time buyers and home movers, with a minimum of 5 per cent deposit, to get the keys to their new home, and we’re excited to play our part in it.”

A Santander spokesperson said it had no product details yet but they would be available through intermediaries, branches and over the phone.

Mortgage broker, Hiten Ganatra, Visionary Finance said: “The mortgage guarantee scheme will help open up options within the second hand property market and it’s incredible that so many lenders are already on board and will be rolling out products by April.”

He added: “The key to success of the guarantee scheme will determined by the competitiveness of the mortgage rates being offered to those looking to use it.”

Stock market-listed mortgage broker firm Mortgage Advice Bureau is already listing the product on its website.

The scheme will be open for new mortgage applications from April 2021 to December 2022, reflecting the government view that the scarcity of high loan-to-value lending is primarily a response to the pandemic rather than a more structural problem.

The government will review the continuing need for the scheme towards the planned end date and has capped the bill for the scheme at £3.9bn.

Fears remain that the already hot property market with rising house prices driven up by the Stamp Duty Land Tax (SDLT) holiday, which has been extended today, could be driven ever-higher after this move.

 

Mortgage Brain builds Harpenden BS affordability calculator

Mortgage Brain builds Harpenden BS affordability calculator

 

The project is the first of its kind for Mortgage Brain, which worked closely with Harpenden to design a bespoke solution to replace the society’s manual affordability calculation process.

Staff also plan to use the calculator internally for decision in principle (DIP) assessments and make it available to brokers.

As a result, the Harpenden can also be included on Affordability Hub, Mortgage Brain’s affordability-based sourcing solution.

Craig Middleton, mortgage sales and distribution manager for Harpenden Building Society (pictured) said: “Affordability is a crucial consideration for mortgage lenders, advisers and customers alike so we are thrilled to have our new affordability calculator in place.

“At Harpenden Building Society we are striving to improve our digital footprint and partnering with experts like Mortgage Brain helps us support our adviser community better.”

Neil Wyatt, sales and marketing director at Mortgage Brain, added: “While this is the first time we have developed an affordability calculator for a lender, it is a natural extension of what we do at Mortgage Brain.

“We are passionate about developing technology that supports the work of mortgage advisers and helps them find the right product for their client as swiftly as possible.”

 

Exclusive: Knowledge Bank and Iress launch integrated product and criteria search

Exclusive: Knowledge Bank and Iress launch integrated product and criteria search

 

The time-saving move follows a ten-month working partnership with the Iress system calling the Knowledge Bank API (Application Programming Interface) and using its data to produce ‘a more intelligent’ product search result.

From 25 February, more than 6,000 brokers using the software can input their client’s requirements via a single login. The system will then display results detailing the lenders who will accept the client based on both the products available and the criteria circumstances.

For XPlan users the cost is £12.75 a month or £134.99 + VAT to access this new search and licensed Knowledge Bank users can link the two accounts together through the manage my accounts button on the software.

Afterwards, the Iress’ Lender Connect proposition enables brokers to submit applications direct to lenders without rekeying data, with two live lenders so far including TSB and another at pilot stage.

Iress executive general manager of product UK Andrew Simon said: “Criteria searches without using Knowledge Bank are time consuming and impractical, making it difficult for brokers to be certain that they are giving their client best advice.

“This integration continues our commitment to making our customers’ lives easier and lets them spend more time focusing on providing advice, rather than on checking lending criteria.”

Nicola Firth, CEO of Knowledge Bank (pictured) said: “The result of this collaboration is a system that will revolutionise the market. It is no longer a viable option to search only for mortgage products and not criteria, not with over 52,000 criteria changes in 2020 alone – that’s 1,000 changes to criteria every single week.”

“Never again will it be necessary for brokers to log into multiple different systems, spending hours cross-referencing and rekeying client data, to find which lender will provide a mortgage for their client. This can now be done in moments, pulling all of the information into one place and providing robust evidence of research for compliance purposes satisfying the FCA’s requirements.”

Speaking to Mortgage Solutions, Firth added: “Competition in any market is good. The next natural progression for the other guys is to catch up to where we are and take it one step further.”

For broker firms and networks with their own platforms or client management systems, Xplan can offer a modular add-on approach as an integrated offering.

Simon said the next phase was to get the value through brokers using the software. “The rubber hits the road when people are using the integrated offering. When we get the users actually using it we’ll get some insight into what’s next.”

Firth adds that Iress has harnessed the Knowledge Bank system in a way that retains its familiarity by replicating it within Xplan – from the screens to knowing how to work it – making adoption an easier proposition.

 

Equity Release Council launches upskilling competency framework for advisers

Equity Release Council launches upskilling competency framework for advisers

 

The educational syllabus offers three pathways based on advisers’ levels of experience, designed to guide their development journey by benchmarking their knowledge and skills as well as signposting materials to support their progress.

The Council worked closely with specialists across the sector to produce six modules which have each been piloted in the field. It said the modules encompass all areas needed to advise consumers effectively and focus on understanding the industry, market, clients, soft skills, products, and processes.

Click here to access the modules.

Donna Bathgate, chief operating officer of the Equity Release Council, (pictured) said: “Property wealth is increasingly part of consumers’ thinking when they make later life financial plans, so it is vital to ensure the service they receive is of a consistently high standard as the market grows.

“The potential for unlocking property wealth should be on every homeowner’s retirement checklist to consider alongside appropriate advice to weigh up all the options and implications. The competency framework is the Council’s latest initiative to help firms and their advisers develop a 360-degree view of today’s market and ensure the best possible outcomes for consumers.”

And the other industry contributors for sharing their knowledge and experience to benefit the wider advice community.

Alice Watson, head of marketing, Canada Life Insurance, said: “As the market continues to evolve, we are proud to have been involved in developing this framework with the Equity Release Council from the beginning and look forward to seeing it develop over the coming years.”

In the last 12 months, the trade body has supported advice standards in a raft of ways, including updating its checklist for advisers and publishing an updated good practice guide. In 2020, 100 advice firms joined the council as its adviser membership grew by 35 per cent to 448 organisations.

We need to ‘step forwards into an unpredictable world’ – Spence at Cambridge BS

We need to ‘step forwards into an unpredictable world’ – Spence at Cambridge BS

 

Spence began his new role at the mutual on 1 November last year and hasn’t met any of his colleagues yet in person, but brings a big CV to an increasingly demanding role.

“The Cambridge truly holds [its] members at the heart of what it does and has a wonderfully rich history of helping people have a home. I’m honoured to join the team and look forward to helping guide and shape the next chapter of its history,” Spence said.

After a 32-year career in banking at Lloyds, rising to director of retail distribution and director of policy co-ordination and risk, Spence also continues as chairman of Spicerhaart, finance chairman of the Church of England’s Archbishop’s Council and in his role as an Essex county councillor.

A rare accolade, John has received an MBE, OBE and CBE for his services to the community, charity and business respectively. He is also blind and has held chairmanships of Action for Blind People, Vitalise, Blind in Business and Essex Community Foundation.

I ask Spence about what he predicts will be the long-term impact of the pandemic.

“If there’s one thing I’ve learnt to predict about the Covid virus, is that it’s unpredictable. In terms of strategy as a building society, we need to step forwards into an unpredictable world. It is only months since the predictions were for a significant fall in house prices and in the early days of 2021 there’s no sign of that at this stage,” he added.

He said he suspected that as furlough is unwound and the economy unlocked we may see a much more divisive economic performance with some sectors flourishing and others not, which particularly in the light of Brexit, could lead to major inflation.

“How do you get the right balance of ambition and caution in an unpredictable world?,” he asked.

Following a question on the pandemic, Spence said we are unlikely to ever go back to normal, adding we are likely to go forwards into a ‘new normal’ instead.

“We have learnt that hybrid working works. I think the days when we drag people large distances into a room for a meeting will be mixed now with a Zoom or a Teams on a digital basis. Time can be reinvested for a better purpose as long as you’re getting the right mix of face to face and digital. I think office space will be used for individual working, particularly for those with less conducive home arrangements, but much more for team gatherings, you can reinvest that time for better purpose.”

He added: “All those brokers have learnt to do things in new ways – they won’t go back. They’ve learned how to build relationships without being in the same room and they’ve learned how to glean the info – we need to see that progress into the legal sector. We can all see that’s a sector that has struggled and needs to join us on this journey of discovery of doing traditional things in a myriad of new ways.”

Given the pandemic and the shifting nature of of the outlook and economy, is more being asked I asked of board members than ever before I ask?

“You need more than ever now to have your eyes open to the full spectrum of possibility. Too often our thinking is confined between three and seven – now is the time to be thinking from nought to ten.”

However, Spence was very clear that face to face meetings and networking still offered huge value.

“Networking will remain critical. We’re human animals and thrive from being with other people. How often have we learnt things from being at a table at an event? How often have people said things that would never have occurred to you? That’s how you expand your mind,” he said.

The Cambridge has always lent nationally on its buy-to-let range but extended its lending area across England and Wales for all products in March 2020.

 

Filling the protection perception gap – Coreco’s Montlake

Filling the protection perception gap – Coreco’s Montlake

 

Following on from the new protection challenge launched in November by trade body AMI, panel guest Montlake discusses his preference to hand off the insurance discussion to a specialist.

In the podcast presented by protection adviser Kathryn Knowles, managing director at Cura with a PHD in business, Montlake said overcoming this disconnect can only be done by making sure brokers’ processes are spot on.

“Different people have different approaches – others like to have the protection discussion and the most successful make sure the first thing they talk about is protection, saying I want to talk about how I’m going to keep you in your home.”

He added: “The reality is as a busy mortgage broker, mortgages are hard in terms of the paperwork and managing lots of enquiries and the most important thing for the client is the fact they want that home or property.

“That’s what they’re focused on which makes it so hard for a broker to slow them down and get into a proper explanation of how it works and how they should have it.”

To listen to the debate, click here.

 

Mortgage Vision runs masterclasses online in March

Mortgage Vision runs masterclasses online in March

In its 12th year, Mortgage Vision is running as a series of eight 45-minute events, packed with industry insights and presented by numerous expert industry leaders.

The agenda covers a range of topics including adverse credit, navigating ever-changing policies and criteria, self-employed and general insurance and the events run from the 1 to the 25 March.

Each masterclass will start at 11am on its allotted day and focus on a different topic with every class offering up 0.5 hours of continual professional development (CPD), with delegates able to quiz presenters through a live Q&A.

Neil Wyatt, sales and marketing director at Mortgage Brain, (pictured) said: “Our Mortgage Vision event has been going strong for more than a decade, and provides advisers with an unparalleled range of diverse and insightful presentations.”

He added: “Advisers have a huge amount to keep on top of, from the challenges of securing mortgages for borrowers with adverse credit to helping those who are self-employed, and Mortgage Vision is a brilliant way to inform and educate advisers on the often-changing mortgage landscape.”

Sign up for the events here. 

Event schedule

1 March Mortgage Brain Navigating the ever-changing landscape of lender policy, product availability and client affordability

4 March Uinsure Reimagined insurance technology that makes giving GI advice a no brainer

8 March HSBC UK High LTV insight: let’s talk about all things 90%

11 March Pepper Money Adverse mortgage insight: An in-depth look at adverse credit and its impact on mortgage customers

15 March Mortgage Brain Simplifying your mortgage submissions to multiple lenders from a single login

18 March Leeds Building Society New Build and affordable housing: what’s coming down the track?

22 March HSBC UK Self-employed insight: let’s talk about all things self-employed

25 March Skipton Building Society for Intermediaries Underwriting and credit risk: behind the scenes

Primis product desk sees January enquiries spike 18 per cent

Primis product desk sees January enquiries spike 18 per cent

 

In a snapshot offering insight into the cases its Appointed Representatives (ARs) are finding hard to place, the network said its desk resolved 2,462 inbound calls; a record last month.

Between March and December 2020, the desk supported brokers with 18,746 queries in total, while throughout 2020, it resolved 23,777 queries from advisers.

The calls clearly focused on the fallout of the Coronavirus crisis as advisers also battle to beat pressure from the stamp duty land tax (SDLT) holiday deadline which ends on 31 March. The network confirmed cases involving second or holiday homes with a view to completion before the SDLT deadline were another popular enquiry.

Primis has also seen Right to Buy enquiries and income protection involving multiple and complex medical conditions in addition to complex income types.

The network said its product desk aims to address queries from advisers within four hours and is currently operating an email and call back-only service on all product sectors while Covid-19 restrictions remain in place.

Vikki Jefferies (pictured), proposition director at Primis, said: “January marked a strong start to the year for our product desk team, with a record number of queries from brokers coming in as this community looked for additional support to help them with client cases. Investing in our adviser members has continued to be a priority for us during the Covid-19 pandemic.”

On furloughed borrowers, Jefferies said lender appetite for these borrowers completely varies across the market.

“Lenders remain cautious about what will happen to sectors such as hospitality and retail from April onwards. Their main aim is to see what will happen to the market once government support schemes such as furlough end.”

She added that specialist lenders have a much better understanding of schemes like the Self-Employment Income Support Scheme (SEISS).

“Compared to where we were in the early autumn, we are seeing more considered decisions from underwriters at specialist lenders when assessing self-employed borrowers. However, the most recent development has been that many specialist lenders are unable to support borrowers who have taken an SEISS grant as recently as January.”

On the day the scheme was due to end, the government announced plans to extend the furlough scheme through to April this year, with an estimated 9.9m people registered in December and claiming 80 per cent of their income up to the cap of £2,500. The government has so far spent £46.5bn to December 2020 on furloughing workers in a bid to protect jobs.

According to Office of National Statistic (ONS) figures, UK unemployment figures were at five per cent to November-end, but are projected to rise to 7.5 per cent or 2.6m by mid-2021. The Bank of England estimates unemployment could rise to 10 per cent this year.

With hotels, restaurants, shops and entertainment industries the worst hit so far during the pandemic, 395,000 people were made redundant in the three months to November.

 

Discomfort over property wealth to fund social care is a major barrier for equity release

Discomfort over property wealth to fund social care is a major barrier for equity release

 

Dr Louise Overton, from the School of Social Policy at the University of Birmingham said in an Equity Release Council (ERC) report out today that lifetime mortgages could play a key role in funding care and a lifestyle at home, instead of waiting for escalation to critical needs.

“Most older people live in mainstream [housing] so there is an opportunity for the industry and government to send a clear message that equity release offers a (partial) solution here. Indeed, the Universal Deferred Payment Scheme applies only to care in an institutional setting, so commercial equity release products may be more aligned to older people’s preferences for ageing in place, and to achieving the Government’s aspirations of transform[ing] the social care system to focus on prevention and the needs and goals of people requiring care,” she said.

 

Mind the gap

 

Overton said the gap between the expectations of policymakers who think the elderly should fund their own care and the preferences and practices of elderly people must be bridged. The lack of trust between stakeholders like financial advisers and local councils was another obstacle, she said, when each party wanted the same outcomes but couldn’t bring themselves to work together.

She said: “Local authorities were often reluctant to signpost self-funders to financial advisers who could offer a range of funding options, due to the fear of liability for poor advice, and financial advisers saw local authorities as a source of misinformation, not acting in clients’ best interests.”

She added: “A much greater level of cross sector trust and awareness is therefore required if the potential for equity release to play a role in meeting social care costs is to be achieved.”

She concluded: “We found little evidence that reluctance to pay for care using housing equity was rooted in strong support for inheritance, or in cultural attachments to the owned home. Rather, perceptions of unfairness were associated with intragenerational disadvantage for responsible saver-citizens who had ‘done the right thing’, by paying taxes and mortgages.”

 

Desperation to stay in home

 

The 24-page Equity Release Council report also revealed the lack of thought and knowledge about future care needs, although a survey revealed 67 per cent of over 50s are still determined to stay in their own homes fearful of residential care homes post-Covid.

The ERC’s report, Solving the social care funding crisis: perspectives on the contribution of property wealth, published with Pure Retirement and My Care Consultant, shows the pressures of the pandemic have left a majority of UK adults concerned that care is too expensive, lacking in public funds and not fit for purpose.

Three in five over-50s say they are fearful of having to move into residential settings and the determination to receive care at home grows stronger with age, rising to 76 per cent among over-70s.

The findings also show over one in five didn’t know they have to contribute to social care costs in later life and half of the adult population have not considered how they will pay for long-term care needs, with 18 per cent making no provision at all.

Government has debated a range of care funding solutions over the last decade, including caps on care costs, a social insurance fund, a National Care Service and higher taxes.

Last week the Government published its blueprint to integrate health and social care services and has pledged to bring forward proposals for broader social care reforms this year.

 

Cross-section of views

 

The Council’s research suggests nearly half of UK adults feel state funded care should be available for everyone to access, up to a certain point, with the option to top this up using their own finances. Meanwhile, 40 per cent believe care should be completely free at the point of use, while four per cent believe care should be completely self-funded.

The findings also highlight that under the current system:

• 5.5m people and their families have had to use their own income or savings to pay for a parent or elderly relative’s care
• 4.6m  have had to provide care within the family due to financial pressures
• 4.1m people and their families have had to sell a parent or elderly relative’s home to pay for care needs
• 4.0m have had to compromise on low quality care for a parent or elderly relative because they could not afford any better.

David Burrowes, chairman of the Equity Release Council, said the country is crying out for a care funding plan that is fair for all and sustainable in the long-term.

“We welcome the Government’s commitment to progress social care reforms this year to help people live independent lives for longer. With this issue firmly back at the top of the agenda, we urge Government to bring forward solutions that can make state-funded care available to all, up to a point, with people using their own funds and assets to top this up where needed. We also need to ensure that care provision can support people’s desire to have their needs met in the sanctuary of their own homes.”

Claire Singleton, CEO of Legal & General Home Finance said the cost of residential care varies by more than £800 a week depending on location: “Property wealth can be an important asset that many families will naturally turn to and our research has shown that the value of homes locally will most likely correlate with the amount people entering residential care can expect to pay locally. On average, people can [also] expect to pay more than £800 a week for private residential care, which is more than double the average weekly income for people in retirement (£320), according to the Department for Work & Pensions. As the ERC’s research shows, the cost and complexity of going into residential care can leave some people hesitant as to whether it is an appropriate solution for them,” she added.

Will Hale, CEO at Key said: “We need to educate people about their choices and how these might be financed. 4.1m people and their families should not be forced to sell the family home in order to pay for care but encouraged to seek specialist advice around how their assets, including housing equity, might best be used to provide them with the care they want and need throughout the stages of later life.
“Whether they want care at home, to move into a sheltered community or into residential care, we need to build a system that combines public and private finances to better facilitate that choice.”

See the full report here.