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Boris Johnson news – live: Government 'far too slow' to roll out economic recovery plan, says Sadiq Khan, as Rishi Sunak unveils mini-budget

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Andy Gregory,Vincent Wood
Wednesday 08 July 2020 09:05 EDT
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Every diner to get £10 restaurant discount and VAT slashed for hospitality sector

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Chancellor Rishi Sunak has scrapped stamp duty for homes under £500,000 and slashed VAT on the hospitality sector – with Britons to be given money-off restaurant vouchers throughout August - in his emergency “mini-budget”, as he announced the government’s coronavirus furlough scheme will end in October.

It came after Boris Johnson and Keir Starmer clashed in the Commons, with the Labour leader accusing the prime minister of “rubbing salt in the wounds” of care home workers with his comments that they had failed to follow procedures as Covid-19 deaths soared. Mr Johnson said the government took “full responsibility” but failed to directly apologise for his comments.

Meanwhile, the finance ministers of Scotland, Wales and Northern Ireland have also written to the chancellor to demand Westminster hand over “crucial” but “relatively limited” fiscal powers in light of the coronavirus crisis, to allow capital spending to be moved over to day-to-day revenue and bring an end to “arbitrary” borrowing limits.

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Talk of 'green recovery' welcomed, but 'more needs to be done', climate group says

“We welcome the initial commitments today to supporting elements of a green recovery, and the huge boost towards making our homes energy efficient. This is a cornerstone to getting the UK on track to net-zero, but more needs to be done," said Clara Goldsmith, campaigns director for The Climate Coalition.

"The government must confirm they will make this programme permanent, while scaling up investment to ensure every home in the UK can be helped to decarbonise. It must also build on this foundation right away, by developing a full-blown and comprehensive green recovery programme to support the net-zero transformation of the whole economy. We are in a climate emergency and the time is now for urgent action.”

Andy Gregory8 July 2020 15:39

Boris Johnson under pressure to say whether Dominic Cummings has requested access to top-secret military sites

Boris Johnson is under pressure to explain whether Dominic Cummings has demanded access to top-secret military sites, sparking a turf war with defence chiefs, our deputy political editor Rob Merrick reports.

The controversial chief aide plans to tour Britain’s most highly classified bases as he seeks to “radically shake up the military”, according to documents seen by an Australian newspaper.

They include the Special Boat Service in Dorset, the SAS headquarters in Hereford and the Defence Science and Technology Laboratory at Porton Down, which researches chemical weapons and pathogens.

Mr Cummings also wants to visit the Rapid Capabilities Office at Farnborough and the defence intelligence unit at Wyton – having already toured MI5 and MI6 twice, the Sydney Morning Herald reported.

John Healey, Labour’s shadow defence secretary, said he feared the Ministry of Defence (MoD) would be “a by-stander” in what was meant to be “the biggest defence review since the Cold War”.

“Plans for Britain's future defence and security should not be in the hands of a political adviser,” he warned.

Andy Gregory8 July 2020 15:44

'Mass unemployment now biggest threat facing UK', unions warn, as Chancellor urged to set out more targeted support

Unison general secretary Dave Prentis said the Chancellor has closed the door on the "damaging austerity" of the past decade, adding: "While there's much for young people, the energy sector and UK businesses to celebrate, there's next to nothing for public services and the workers who've kept the country going through the last few difficult months.

"With extra funds, national and local public services could provide many more jobs. A much-deserved early pay rise for health workers and council staff would mean money in their pockets to be spent on local high streets.

"Covid-19 has shown how much we all need public services. Funding them properly can help the economy and bring back the support and security to every community that's long been missing."

TUC general secretary Frances O'Grady said: "Mass unemployment is now the biggest threat facing the UK, as shown by the thousands of job losses at British Airways, Airbus and elsewhere. The government must do far more to stem the rising tide of redundancies.

"The Chancellor should have announced targeted support for the hardest-hit sectors like manufacturing and aviation. Struggling businesses will need more than a one-off job retention bonus to survive and save jobs in the long-term.

"We must create jobs through more new public investment in new homes, childcare, faster broadband, better transport and green tech. The government should have announced extra investment in jobs across all public services - starting with filling the 200,000 vacancies in the NHS and social care."

John Phillips, acting general secretary of the GMB, said:"The Chancellor has to follow-up today's announcements with meaningful, sector-by-sector negotiations as the furlough scheme ends. Some sectors not mentioned today - such as public services and aviation - risk being left behind."

Andy Gregory8 July 2020 15:50

Chancellor 'missed opportunity to make long-term investments in health and care staff'

"We entered the pandemic with 40,000 nursing vacancies in England alone. It is disappointing, then, that the Chancellor announced no measures to address the long-standing issues of recruitment and retention in the nursing profession - including pay and staffing," said Dame Donna Kinnair, general secretary of the Royal College of Nursing.

"Investments in the health and care workforce are vital, as are steps to address the structural issues in the UK health service that Covid-19 has exposed and worsened."

Andy Gregory8 July 2020 15:51

Vaccine could be 'definitive' in shaping UK recovery as furlough scheme ends, expert says

Considering the update on the furlough scheme, Dr Walter Boettcher, head of research and economics at Colliers International acknowledged that "the new payments, the Kick Starter scheme, as well as training programmes, offer some transitory arrangements for certain segments of the workforce" but warned they "will not prop up the workforce as the furlough scheme has done so far".

"The real question remains as to whether the timing of existing furloughing scheme will align with the incipient economic recovery. Given that a vaccine, according to press reports, may become available in October, that could be a definitive month in shaping the UK’s recovery.”

Speaking about the temporary stamp duty changes, Andrew White, Colliers' head of residential said the tax "has long been a blocker to the UK’s housing market", and thus "any reduction in stamp duty right now would be a welcome reprieve for the housing industry, which naturally all but stagnated during the COVID-19 lockdown.

“However, we would welcome further thought on the higher rates of stamp duty which is slowing the sale of properties over £925,000, which is significant part of the market in London and the South East," he added.

“Likewise, the previous three per cent surcharge for second properties and the tightening of tax allowance for the private buy-to-let market means that the transmission mechanism may not deliver the intended results at a scale similar to what might have been achieved in the past.”

Andy Gregory8 July 2020 15:57

Liam Fox celebrates nomination for head of World Trade Organisation

Confirming reports that the UK government has nominated former international trade secretary Liam Fox to be the new head of the WTO, the man in question said he was "honoured", adding: "We must ensure that global trade works for everyone."

His former Cabinet colleague Jeremy Hunt said there was "no one better to win the global argument for free trade".

The 58-year-old has close links in Washington and would need its support, or backing from one of the other big WTO power brokers, to land the job, The Independent has previously written.

But support from the Trump administration could backfire elsewhere in the world, given the president’s attempts to sabotage the workings of the WTO that have created the biggest crisis in its 25-year history.

Andy Gregory8 July 2020 16:02

'We don't see these measures meaningfully changing UK's growth trajectory in medium-term'

Addressing the measures set out today by Rishi Sunak, Matthew Oxenford, analyst at The Economist Intelligence Unit said they amounted to "a more short-term set of stimulus measures than a full budget".

"Many of the longer-term impacts of the coronavirus on the government response are likely to have to wait until the full budget in the autumn," he said. "Also notably absent is aid for communities in the event of local lockdowns, which are unfortunately likely to be part of our future for some time and a source of significant economic uncertainty.

"Given that the UK economy is among the most dependent economies in Europe on consumer spending, and the UK’s long lockdown has led to a total decline in economic activity, which the Treasury has estimated at 25 per cent of GDP, improving the short-term health of the consumer, retail and hospitality sector is of primary importance to the chancellor.

"We expect that these initiatives will have a modest impact in encouraging consumer spending in the short term, but this will be fragile and conditional on continued improvement in the public health response. But we don't see these changes themselves meaningfully changing the UK’s growth trajectory in the medium-term.”

Andy Gregory8 July 2020 16:06

Sadiq Khan accuses government of being 'slow' on economic response

Mayor of London Sadiq Khan has accused the government of being slow to respond to the financial consequences of the the coronavirus following the Chancellor's statement.

Mr Khan said: “The biggest problem with this mini budget is it fails to address the scale of the challenge we are facing and I think just like the government was slow to respond to the health consequences of Covid-19, they have been slow to respond to the economic consequences.

“The Bank of England have said this will be the worst recession in more than 300 years”.

Here is is speaking on radio station LBC:

Vincent Wood8 July 2020 16:34

Stamp duty policy will 'reinvigourate housing market'

Housing firms have hailed the Government's stamp duty cut as a "hugely welcome" step to help the sector's recovery.

Chancellor Rishi Sunak said that, from 15 July until March 31 2021, buyers will pay no stamp duty on the first £500,000 of their purchase when they move home. The policy change, which could save buyers up to £15,000.

Greg Fitzgerald, chief executive officer of Vistry Group said: "Today's announcement on stamp duty is hugely welcome and the timing could not be better.

"The sector, like many across the economy, has faced significant challenges in the last few months and we believe this initiative will give customers the extra confidence needed to take the exciting step of owning a home or moving up the property ladder.

"We have seen that interest from potential buyers has been encouragingly strong and robust week-on-week since the lockdown started to ease, and we believe this move on stamp duty will go a long way towards reinvigorating the market."

Vincent Wood8 July 2020 16:54

'The easiest trade deal in history': UK nominates Liam Fox to run World Trade Organisation

Britain is nominating former minister Liam Fox to be the next director-general of the World Trade Organisation, the government has announced.

Dr Fox, who famously said the still elusive Brexit trade deal with the EU would be the "easiest in history", would replace Roberto Azevêdo for an initial term of four years if elected.

“As the world seeks to recover from the shared challenge of the Covid-19 pandemic, the role of free and fair trade has never been more crucial," Boris Johnson said in a letter to the WTO.

More below:

Vincent Wood8 July 2020 17:04

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