United Kingdom

Rishi Sunak announces £1.2billion extra cash for Scotland and £740million for Wales

Chancellor Rishi Sunak split nearly £2billion between Scotland and Wales as he bolstered the union in his 2021 budget.

The Treasury supremo served up a £1.2billion pot to the Scots before delivering £740million to the Welsh.

His generous financial booster will make it difficult for those calling for independence to argue they would be better off without central Government.

The Scottish funding also came as First Minister Nicola Sturgeon was mired in an investigation into the botched probe into complaints made against Alex Salmond.

Rishi Sunak said: 'Through the Barnett formula, the decisions I'm taking in this Budget also increase the funding for the devolved administrations, by £1.2 billion for the Scottish government, £740 million for the Welsh government and £410 million for the Northern Ireland executive.

'Our future economy depends on being a United Kingdom. businesses in Scotland, Wales and Northern Ireland have contributed to and benefited from our coronavirus response.

British Chancellor of the Exchequer Rishi Sunak speaking in the House of Commons

Scottish First Minister Nicola Sturgeon and First Minister of Wales Mark Drakeford

'Central to that has been a Treasury that acts for the whole United Kingdom. That it not a political point, that is a undeniable truth. The majority of today's Budget measures will apply directly to people in all four nations of the United Kingdom.

'The UK Government has protected millions of jobs and livelihoods across Scotland – and the strength and stability of our economic union will ensure we bounce back from this pandemic together.'

The Barnett Formula is the name for the way block grants are calculated for the different areas. 

The 2021 Budget 'paves the way for brighter days ahead' in Wales, Welsh Secretary Simon Hart has said.

He described the plan as 'a fantastic Budget for Wales' which would help protect jobs and livelihoods through the pandemic.

He said: 'The continuation of furlough, self-employed and business support, the Universal Credit uplift, the hospitality VAT cut and the fuel duty freeze will provide vital certainty of people and businesses in Wales in the months ahead, while the announcements of the Centre for Rail Excellence, hydrogen hub and investment in growth deals will bring thousands of high-skilled jobs, signalling Wales's place as a centre for innovation and the industries of the future. 

Rishi Sunak did the traditional Chancellor's pose outside 11 Downing Street today as he headed for the House of Commons

The costs of the government's response to coronavirus have racked up dramatically since Rishi Sunak delivered his first Budget last March

Budget 2021 at a glance

Here are the main points of Rishi Sunak's Budget today:

  • Office for Budget Responsibility (OBR) predicts economy will return to pre-Covid levels by the middle of 2022, six months earlier than previously though.
  • OBR forecast economy will grow this year by 4 per cent, by 7.3 per cent in 2022, then 1.7 per cent, 1.6 per cent and 1.7 per cent up to 2025 
  • Unemployment now expected to peak at 6.5 per cent, down from 11.9 per cent expected in July 2020 forecast, meaning 1.8million fewer people out of work.  
  • Furlough scheme extended to the end of September under current 80 per cent of salary rate. 
  • Employers asked to pay 10 per cent in July, then 20 per cent in August and September. 
  • Support for self-employed also goes on until September. 
  • £20 Universal Credit uplift remains in place for another six months. 
  • Apprentice grants for employers doubled to £3,000.
  • £5billion fund for Restart Grants for businesses. Retailers will get up to £6,000 per site from April. Hospitality and leisure open later and will be able to claim up to £18,000.
  • New recovery loan scheme for businesses of £25,000 to £10million, 80 per cent guaranteed by the Government.
  • Business rate holiday in place until June and discounted for the remaining nine months of 2021-22 financial year. 
  • 5 per cent VAT rate for hospitality extended to September, then at 12.5 per cent until April 2022 before returning to 20 per cent regular rate.
  • Stamp Duty holiday extended until June for homes worth up to £500,000, then phased back in. 
  • Mortgage guarantee scheme for those with 5% deposit to boost home sales.
  • UK's total public spending bill estimated at £407billion. 
  • The UK has borrowed £355billion - 17 per cent of GDP - the highest since the Second World War.
  • No income tax, VAT or national insurance rises.  
  • Tax free income threshold will rise to £12,570 next year and then frozen until 2026.
  • Higher rate threshold rises to £50,270 next year and then frozen until 2026. 
  • Corporation Tax increased to 25 per cent in 2023.
  • Small Profit Rate of 19 per cent set up for small businesses. 
  • Inheritance tax thresholds, pensions lifetime allowance, and annual exempt amount in capital gains tax maintained at current levels until April 2026.
  • Alcohol duty frozen.
  • Fuel duty frozen. 

'As we have seen over the past year, the strength of the United Kingdom has never been more important to Wales and we will continue to provide vaccines, Covid testing and armed forces support which are key to lifting restrictions and reopening the Welsh economy. 

'Today's Budget delivers for every part of Wales and paves the way for brighter times ahead.'

In a statement, Mr Sunak said: 'Throughout the pandemic, the UK Government has stepped in to support millions of lives and livelihoods across Wales.

'The Budget bolsters that support - ensuring our Plan for Jobs continues through the next stage our recovery.

'We are also investing millions in Welsh towns and cities, key infrastructure and green industries that will be vital to long-lasting economic growth.'

The UK Government said it was committing £4.8 million for the Holyhead hydrogen hub, a green demonstration project which will create 30 jobs in Anglesey.

It was also committing up to £30 million for the construction of the Global Centre for Rail Excellence in Neath Port Talbot, which will create 120 jobs at the new rail and infrastructure testing facility.

It said it would continue to work with the Welsh Government to establish at least one freeport in Wales as part of the aim 'to make Wales a premier destination for trade and investment'.

The Welsh Conservative leader in the Senedd, Andrew RT Davies, said he wanted the Welsh Government to use the additional funding to extend business support for Welsh firms and freeze council tax rates.

His calls were echoed by the director of the Confederation of British Industry (CBI), Ian Price, who said the Budget would protect the economy and kickstart recovery.

He said: 'With a significant Barnett consequential delivered, local businesses will be looking to the Welsh Government to use these funds to extend business rate reliefs offered to counterparts in other parts of the UK.

'That additional breathing space will undoubtedly protect jobs and livelihood across the country in the weeks and months ahead.'

The Welsh Government's finance minister Rebecca Evans said Mr Sunak had 'done the right thing' in extending the UK-wide support package for businesses, but also said there was 'no sign of real long-term help for the most vulnerable in our society' including funding of social care.

Ms Evans said on Twitter: 'The Chancellor had the opportunity to make permanent the additional universal credit uplift, but he didn't. And the longer-term changes to personal tax allowances are a stealth tax which will hit the lowest paid hardest.

'The Chancellor has splashed the cash, but none of it on capital investment by the government.

'The Welsh Government will get precisely nothing in terms of additions to our capital budget.'

Ms Evans also said she was 'disappointed' there was no mention of funds to ensure the safety of 2,000 coal tips in Wales following a 60,000-tonne landslide last year at one in Rhondda.

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