Budget 2021: PM has 'no doubt' about strong jobs recovery

The prime minister says he has "no doubt" there will be a strong jobs-led recovery from coronavirus.

Mr Johnson said it had "been expensive" to look after everyone during the pandemic and the chancellor would be "frank" about state of the economy in Wednesday's Budget.

45 Conservative MPs have urged Mr Sunak to cut business rates in England to help "save the High Streets".

Labour has accused ministers of "short-termism".

Writing to the chancellor ahead of the Budget, the MPs from constituencies in the North of England, said the tax should be cut from 50% of market rent to 35%.

Rishi Sunak has promised to offer businesses support while Covid-19 restrictions remain in place.

But in a pre-Budget speech, Labour's shadow chancellor Anneliese Dodds said the chancellor had no plan and had spent the crisis "looking for the escape hatch" rather than setting out a strategy to take the country forward.

She said coronavirus had exposed "the weaknesses of 10 years of Conservative mismanagement of our economy".

On Wednesday, Mr Sunak will use the Budget to set out the government's tax and spending plans following a year of financial disturbance and high government borrowing brought on by the coronavirus pandemic.

He is facing pressure - including from the former Conservative Chancellor Ken Clarke - to raise taxes in order to repair public finances.

However, others have argued that taxes could hinder the country's recovery from Covid-19.

And now a group of MPs from the chancellor's own party - known as the Northern Research Group - have urged him to cut the tax paid by shops.

The tax is calculated based on the value of a business's property. As part of emergency pandemic measures introduced last year, the government brought in a business rates holiday, but this is currently due to end in April.

In a letter to Mr Sunak, the MPs - many of whom represent traditional Labour seats won by the Conservatives at the last election - argue that the burden of business rates is falling on areas most in need of support.

They say cutting the tax, when it is reintroduced, would "ensure retailers have the confidence to invest in their bricks and mortar stores and save High Streets across the country".

Although they acknowledge that the business rates holiday "undoubtedly saved hundreds of retail businesses", they also call for "longer-term fundamental reform" to help High Street shops compete against online retailers.

On Sunday, the government announced a £5bn grant scheme to help High Street shops and hospitality reopen as the lockdown is eased.

Asked about introducing a sales tax to target online retailers such as Amazon, Mr Sunak said he was trying to reach an international agreement with other countries "on how to tax these large multinational digital companies properly".

A report from the treasury committee says now "is not the time for tax rises". The cross-party group of MPs says increasing taxes could undermine the UK's economic recovery from Covid-19, but they may be needed at a later date.

The main focus of the Budget will be support for people and businesses in, what the government hope will be, the last, difficult part of the Covid-19 crisis. That's why the Treasury has already announced another £5bn of grants for businesses that are still closed.

Despite the publication of the roadmap for lifting the lockdown in England, there's still uncertainty about the future.

And so the Chancellor will "level with" people about "the challenges" ahead for the public finances rather than setting out specific plans for raising more money and reducing borrowing.

They will come later in the year, and will almost certainly include a gradual increase in corporation tax. Although the Treasury isn't commenting on that now.

The economy performed better than expected at the end of last year, then worse at the start of this year because of the new lockdown.

But the Bank of England is predicting bumper economic growth, thanks to a combination of the vaccine and households raring to spend money they've saved. That could make the chancellor's job a bit easier.

In a speech to Bloomberg, Anneliese Dodds accused the chancellor of looking for "a quick fix" and presiding over "12 months of irresponsible decision making".

She said businesses and families had been "left in the lurch" because Mr Sunak had "failed to make the link between health and the economy".

She called on the government to extend Covid-19 support measures including the furlough scheme, the business rates holiday, the reduced rate of VAT and the £500 payment for those self-isolating.

Ms Dodds also accused Mr Sunak of implementing "a triple hammer blow of council tax rises, social security cuts and pay freezes".

And she attacked the government for wasting money citing "£22bn spent on the Test and Trace system, £150m spent on unsafe PPE and £2bn on contracts to businesses with clear links to the Conservative party, with no tender at all".

She said a Labour government would bring forward £30bn of planned investment "to support the creation of 400,000 new green jobs" and would support 100,000 new businesses by expanding start-up loans.

Speaking to the BBC's Andrew Marr on Sunday, Mr Sunak said he had responded to the pandemic "generously and comprehensively".

"We went big, we went early and there's more to come," he said.

"My priority is to keep supporting British families, businesses and people through this crisis - I said at the beginning I would do whatever it took to do exactly that and I remain committed to that and you'll see more of that in the Budget."