Budget 2021 news: Minister can’t rule out below-inflation pay rise and Tory MP broke lobbying rules

Rishi Sunak’s 2021 Budget will include an end to the year-long public sector wage freeze imposed during the coronavirus pandemic, the Treasury has said.

The chancellor said in a statement ahead of his Commons speech on Wednesday that “with the economy firmly back on track, it's right that nurses, teachers and all the other public sector workers who played their part during the pandemic see their wages rise”.

However, unions warned any pay rises must be above the rate of inflation, which is soaring. On Tuesday morning Paul Scully, the business minister, was unable to confirm this would be the case, saying any rises would be based on the recommendations of pay review bodies.

Meanwhile, the government has also announced a rise in the minimum wage for workers aged 23 or older. Some 2 million people on the so-called “national living wage” will see their pay increase from £8.91 an hour to £9.50 from 1 April.

The minimum pay for 21- and 22-year-olds is also set to rise, as well as for apprentices.

Read More

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Budget: What has already been announced?

Budget 2021: Tax, childcare and what else to expect

Key points

• Public sector pay freeze imposed on millions during pandemic to be lifted...

• ...but minister can’t say if salary rises will keep pace with inflation

• Minimum and living wages to rise

Public sector pay freeze imposed on millions during pandemic to be lifted

07:51 , Jon Sharman

The government is set to lift the public sector pay freeze it imposed on millions of workers last year, Rishi Sunak will announce on Wednesday.

The partial pay freeze was imposed by the chancellor in response to the coronavirus pandemic, and was described by unions as "kick in the teeth" for key workers who it hit, writes Jon Stone.

Critics accused the chancellor of economic mismanagement for taking demand out of the economy during a downturn, but Mr Sunak said he wanted public sector wages to match "the context of the wider economic climate" in which wages were falling.

Public sector pay freeze imposed on millions of workers during pandemic to be lifted

Minimum and living wages to rise

07:56 , Jon Sharman

Some 2 million workers will get a pay rise next year when the national living wage is increased from £8.91 an hour to £9.50.

The change will take effect on 1 April, the Treasury said ahead of Rishi Sunak’s Budget address.

The 59p hourly boost will mean a full-time worker on the living wage will get a pay rise of more than £1,000 per year, according to the government.

But critics questioned how much better off workers will be considering the chancellor has already hiked National Insurance and cut universal credit as inflation rises. Many universal credit claimants are in work.

Nonetheless, the 6.6 per cent hike is more than twice the current consumer price inflation rate of 3.1 per cent.

While the national minimum wage applies to everyone of school-leaving age, the living wage is for the over-23s.

For those aged 21 and 22, the minimum wage will rise from £8.36 an hour to £9.18, while the figure for apprentices will go from £4.30 to £4.81 per hour.

Minister can’t say if public sector pay will keep pace with inflation

08:08 , Jon Sharman

Paul Scully, the business minister, has refused to say whether public sector workers will get an above-inflation pay rise next year.

The Treasury has announced an end to the coronavirus-driven public sector pay freeze ahead of Rishi Sunak’s Budget speech tomorrow.

However, Mr Scully said the level of any increase would depend on the recommendations of the pay review bodies when they report in the spring.

Speaking on Sky News, he declined to say whether they would be above the rate of inflation at the time.

"That will be determined by the pay review bodies. The chancellor is keen to give people a rise," he said.

"They will then take that into account as they look to what should be an appropriate rise for the public sector, given the public finances.

"I can't pre-empt what they are going to do. We will see where we are come next April when the review bodies have reported."

Living wage hike will cause small firms to struggle, lobby group claims

08:27 , Jon Sharman

The UK’s smallest companies could struggle to fill jobs because of the impending living wage rise, a lobby group has claimed.

Mike Cherry, the chairman of the Federation of Small Businesses, told LBC he was worried about Rishi Sunak’s Budget.

He said: “For the smallest employers they will struggle to maintain jobs they need because of the increase of the national living wage, and employees will have to face the increase of NI contributions next April so it is problems all around.

“As we look at consumers we should look at businesses and tradesman, the cost of diesel and the cost of materials. That's alongside debts and coming out of the pandemic.”

He added: “The smallest businesses will really struggle to keep people employed with the living wage going up higher than expected. The government should increase the employment allowance to allow businesses to employ people on their books.”

‘Go slow’ strategy for customs checks ‘planned by France in fishing row’

08:37 , Jon Sharman

A “go-slow” strategy for customs checks coming in and out of the UK before Christmas is reportedly being prepared by France as the row over fishing rights after Brexit escalates.

France will finalise a set of potential sanctions on Tuesday which could be rolled out if its fishermen are not given greater access to UK waters, writes Emily Atkinson.

Fury was sparked after the government in London announced last month that it had approved just 12 of the 47 applications it had received from French small boats. Paris called the move “unacceptable”.

‘Go slow’ strategy for customs checks ‘planned by France in fishing row’

MPs should wear masks in Commons, WHO envoy suggests

08:47 , Jon Sharman

MPs should wear masks in the Commons to mitigate the risks of “unstoppable” Covid-19, a senior World Health Organisation (WHO) official has said.

Dr David Nabarro, the WHO’s Covid-19 special envoy, told Sky News: “This virus, it is absolutely unstoppable, it gets everywhere, and so we have to do everything we possibly can to stop it.

“And one of the best ways to stop it is a well-fitting surgical mask properly over your face, pushed in over your nose, covering everything, and that reduces the risk to others and the risk to you.

“If it works, why on earth don't people use it? It's not a party political issue – this virus doesn't vote.

“And indeed, there's no difference in how you deal with the virus when you vote for this party or that party.

“So everybody, wear masks when you are in close confinement, it's the right sensible proper thing to do, and everybody should be doing it, including our leaders.”

Though not as fraught an issue as in the US, mask-wearing by MPs has become a talking point in recent days. Last week Sajid Javid, the health secretary, urged his colleagues to cover their faces while in the Commons, though at the weekend Rishi Sunak would not be drawn on whether he thought they should as a matter of course.

Read more about all that here:

Tories won’t wear masks in Commons as they ‘know each other’, Jacob Rees-Mogg says

Speaker says ministers should resign for pre-Budget briefings on spending

08:57 , Jon Sharman

#icymi

Sir Lindsay Hoyle has suggested ministers should resign for pre-briefing details of the Budget, as he said it was unacceptable for the government to “try to run roughshod” over parliament.

Expressing his anger at the move, the Commons speaker hit out at the decision of the Treasury to announce a multi-billion pound funding boost for the NHS — three days before the Budget, writes Ashley Cowburn.

The £5.9bn package unveiled on Sunday evening is aimed at tackling waiting lists, with the number of people waiting routine hospital treatment in England at the highest levels since records began in 2007.

Speaker says ministers should resign for pre-Budget briefings on spending

Cop26 on brink as Boris Johnson reveals he’s ‘very worried’ and climate fund deadline is missed

09:07 , Jon Sharman

Hopes for a breakthrough on tackling the climate crisis at Cop26 are fading after Boris Johnson admitted he is “very worried” the summit will fail and it was revealed poor nations will not receive the $100bn of help they were promised until 2023 – three years late.

With just six days until the crucial Glasgow gathering, the United Nations also released fresh alarming evidence that the world is “way off track” in curbing greenhouse gas emissions.

Speaking to children in Downing Street, the prime minister dropped his previous optimism about the chances of reaching an agreement to deliver net zero emissions by 2050, writes Rob Merrick.

Cop26 on brink as PM says he’s ‘very worried’ and climate fund deadline missed

Sunak ‘rules out VAT cut on household energy bills'

09:25 , Matt Mathers

Rishi Sunak has ruled out cutting VAT on household energy bills to help families struggling through the winter, according to a report.

Treasury insiders told the Mail that the chancellor believes slashing VAT would subsidise the rich while providing little benefit to poorer households.

Labour has been calling on the government to bring in the measure, promised by Michael Gove and Boris Johnson during the Brexit campaign.

Earlier this week Labour produced research which it said showed poorer households pay a far bigger proportion of their income in fuel bills.

Government cannot guarantee public sector pay rise will be above inflation

09:35 , Matt Mathers

Sunak is scrapping the public sector pay freeze - but will any rise be above inflation?

Paul Scully, a business minister sent out on the broadcast round this morning, said he couldn’t be sure.

“It could be anything,” he told Sky News. “We will see where we are come next April when the review bodies have reported.”

My colleague Adam Forrest has more below:

Government cannot guarantee public sector pay rise will be above inflation

WHO urges all MPs to wear masks in Commons

09:50 , Matt Mathers

Face masks are increasingly becoming a battle line in British politics, with Tory MPs generally not wearing them while those on the opposition benches take a more cautious approach to covering up.

Last week Jacob Rees-Mogg, Leader of the House, bizarrely claimed that he and his colleagues didn’t need to wear them because they “know each other”.

But the World Health Organisation has today called on all MPs to make use of coverings during tomorrow’s Budget.

Dr David Nabarro, the WHO’s special envoy for Covid-19, said that “everybody” should be wearing masks in close confinement with other people, “including our leaders”. More below:

WHO’s Covid chief says MPs should wear masks in Commons

Out on the broadcast round this morning, Paul Scully, a business minister, said he would wear a mask on Wednesday if it’s “busy” - a strange comment given Budget day is never exactly a quiet one.

“Where I have been in a room or area where it is absolutely rammed I wear a mask - on the cab on the way here, on the Tube, on the trains, he told Sky News.

Tory MP faces suspension from Commons over ‘egregious’ breach of lobbying rules

10:05 , Matt Mathers

Conservative MP Owen Paterson faces suspension from the House of Commons after a watchdog found he broke lobbying rules in an “egregious case of paid advocacy”.

The Parliamentary Commissioner for Standards said the Tory backbencher had breached the code of conduct after investigating his lobbying on behalf of two companies he was a paid consultant for.

My colleague Adam Forrest has more details:

Tory MP faces suspension over ‘egregious’ breach of lobbying rules

What do we already know will be in the chancellor’s Budget?

10:25 , Matt Mathers

Such has been the volume of announcements made by the Treasury in recent days ahead of the Budget, Sir Lindsay Hoyle, the Commons speaker, felt moved to slap down Rishi Sunak for running "roughshod" over parliament.

The £5.9bn package announced for the NHS on Sunday appeared to be the straw that broke the camel's back, with the furious speaker yesterday saying it was "unacceptable" for MPs not to hear about Budget details first.

So with just a day to go until Sunak poses outside No 11 Downing Street with his red box before making his way to the Commons chamber to deliver his speech, what do we already know will be in there?

Budget: What has already been announced?

Plan B Covid restrictions could result in ‘£18bn’ hit to economy

10:55 , Matt Mathers

The introduction of Covid plan B restrictions for five months could result in an £18 billion hit to the economy, according to a report.

According to government documents obtained by the Politico website, businesses would be severely impacted as people work from home.

Plan B restrictions would include workers being asked to stay home, mandatory face masks and vaccine passports.

Former England manager interested in cladding?

11:05 , Matt Mathers

The Department of Housing responded to a female journalist by using the name of former England football manager Terry Venables, also known as ‘El Tel’.

LBC’s Rachel Venables (no relation, as far as we know) requested information from ministers on cladding.

“Good to see El Tel suddenly taking an interest in cladding I suppose,” Venables said of the response.

“Honestly. Were they trying to be funny with a nickname that I wasn’t meant to see? I can confirm I signed the original request with my *actual* name.”

Paterson rejects watchdog ruling he breached lobbying rules

11:15 , Matt Mathers

Tory MP Owen Paterson has rejected a watchdog’s ruling that he broke parliament’s lobbying rules.

He accused Kathryn Stone, the Parliamentary Commissioner for Standards, of making up her mind before she had spoken to him.

Paterson also claimed the commissioner ignored the evidence of “17 witnesses who came forward to support me were alsonot spoken to and their written evidence ignored”.

In a statement, he said: “This is a biased process and not fair.

“It offends against the basic standard of procedural fairness that no-one should be found guilty until they have had a chance to be heard and to present their evidence including their witnesses.”

Allegra Stratton ditches diesel car ahead of Cop26

11:38 , Matt Mathers

Allegra Stratton says she has got rid of her diesel car ahead of the upcoming Cop26 summit.

The PM’s Cop26 spokeswoman came under fire earlier this year after revealing she drove a Volkswagen Golf while encouraging people to reduce their emissions.

Speaking to Times Radio ahead of next week’s summit in Glasgow, Ms Strattgon said she is now without a vehicle and will use trains to travel.

She said she will travel to Cop26 by rail and will consider buying an electric vehicle in the future.

Government must make people fly less, say climate advisers

12:09 , Matt Mathers

Boris Johnson’s strategy for cutting emissions to net zero is a major step forward – but will fail to reduce demand for flying, the government’s climate advisers have said.

The Climate Change Committee (CCC) said the strategy set out by Mr Johnson’s government last week had left some big gaps, including measures to reduce the number of flights.

My colleague Adam Forrest reports:

UK government must make people fly less, say climate advisers

12:26 , Liam James