Starmer says it is right that corporation tax is not going up this year.
But why is Sunak announcing increases now? Starmer refers to multiple reports saying that Sunak has told Tory MPs in private that he wants tax rises now, so that he can cut them before the election. He goes on:
Let me be crystal clear the proper basis for making tax decisions is the economic cycle, not the electoral cycle.
Starmer says, behind the videos, Sunak does not believe in an active state. He is desperate to return to free market principles, he says.
Back in the Commons, Starmer says this was not the bold, long-term plan the nation needed.
And he says that instead of putting his faith in free ports, the chancellor should have focused on making sure the government’s Brexit deal actually works.
We’ve updated some of the earlier posts covering what was said in Rishi Sunak’s speech. You may need to refresh the page to get the updates to appear.
Starmer says there was nothing in the speech about social care. The government may have forgotten about it, but Labour hasn’t, he says.
He says in September Rishi Sunak announced a plan for winter, and told MPs that people should not live in fear in the future.
But at the same time the government was ignoring the science. He says it did not order a lockdown, and as a result the second wave was much longer and harsher than it needed to be.
The chancellor is betting on a consumer-led recovery, he says. He jokes that he might do the same if his neighbour was spending tens of thousands of pounds redecorating his flat.
A Labour budget would have kept the £20 a week universal credit uplift until a better universal credit system were available, he says.
He says the budget should also have extended the criteria for the £500 self-isolation payments.
On housing, he says the plan for 95% mortgages reminds him of the Cameron/Obsorne right-to-buy plan, which he says just increased house prices.
Sir Keir Starmer is now responding for Labour.
He starts by saying it is a relief to be finally standing up in the Commons opposite the person who is actually taking the decisions.
Sunak ends by saying this is a budget that will “unite and level up”.
Sunak turns to free ports. He claims the UK can only implement them because it is out of the EU. (That is not strictly true. They were possible under EU rules.)
He says they will have different rules, making it easier and cheaper to do business. Simpler planning rules will help the construction of infrastructure.
He says eight locations for free ports are being announced today. They are: East Midlands airport, Liverpool, Felixstowe, Humber, Plymouth, Thames, Teesside, and Solent.
One will be in Teesside. Referring to it, Sunak sums up what his measures could achieve.
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 free port, with a Treasury just down the road, and the UK infrastructure bank only an hour away.
Sunak says there is another £150m fund to help communities take ownership of pubs, theatres or sports clubs.
Sunak says we need a different economic geography.
That means changing the location of economic institutions.
The Treasury, and the business department, will establish a new economic campus in Darlington, he says.
He says 45 new town deals are being announced.
Sunak says the Treasury works for the whole of the UK.
He says three new city deals are being announced for Scotland, and another three in Wales.
And the first allocations are coming under the £400m deal for Northern Ireland, he says.
Here are the new UK growth forecasts from the Office for Budget Responsibility, compared to last November’s forecasts.
- 2021: +4%, compared with +5.5% forecast in November
- 2022: +7.3%, compared with +6.6%
- 2023: +1.7%, compared with +2.3%
- 2024: +1.6%, compared with +1.7%
- 2025: +1.7%, compared with +1.8%
As you can see, growth forecast this year has been cut to 4%, from 5.5% (as the current lockdown wasn’t factory in back in November), followed by stronger growth in 2022.
Last year’s slump was less severe than the OBR expected, so the economy is expected to reach its pre-pandemic size in the middle of 2022, six months earlier than previously thought.
The slowdown from 2023 onwards, to below 2% per year, is disappointing, though.
Alpesh Paleja, chief economist at the CBI, says this is a ‘relatively cautious outlook’.
Mark Gregory, chief economist at EY UKI, is also unimpressed by the growth outlook:
Sunak says he is launching a programme to help firms with digital skills.
An extra £1.6bn is being allocated for the vaccine rollout, he says.
And there will be a new visa system for people with high-level skills. He wants the UK to attract the most skilled people for research.
Sunak says a new infrastructure bank will be set up in Leeds, with capitalisation of £12bn.
The government is launching a world-leading sovereign green bond, he says.
He also says he wants to make the City a global leader for voluntary high quality carbon offset markets.
Sunak says alcohol duty will be frozen for the second year in a row, and fuel duty for the 11th year in a row.
Sunak is now announcing a “super-deduction” – a tax break for firms that invest.
He says it will allow firms to reduce their tax bill by 130% of what they spend on investment.
He says under the current rule means a firm spending £10m on equipment gets a £2.6m tax reduction. Under this plan it would get one worth £30m, he says.
He says this has not been tried. But the OBR thinks it could boost investment by 10%, he says.