Budget will push one in six adults into higher tax band by 2025, says IFS

• Allister Heath: The Tories have trashed Thatcherism

• From furlough to restart grants, how Rishi Sunak's £352bn Covid support package works

• EU mulls retaliation against British exports and City over grace period move

• Sturgeon rejects 'absurd' claims she was out to destroy Salmond

• ​Coronavirus latest news: Germany U-turns on AstraZeneca vaccine for over-65s

The number of working adults paying the higher rate tax will have risen two-and-a-half times between 1990 and 2025, the Institute for Fiscal Studies has estimated.

One in six UK taxpayers will be faced with 40 per cent income tax by the end of this Parliament, under Rishi Sunak’s Budget plans - compared with one in 15 back in 1990.

Paul Johnson, director of the IFS, said: “The basic rate may have fallen but a lot of people are paying higher rates of income tax “Freezing things for a long time makes a big difference. Since 2010 there has been a doubling of the number of people, to almost 500,000, paying the additional 45 per cent rate of income tax. That's because it has kicked in at £150k for that whole period.”

During his think tank’s regular Budget response press conference, Mr Johnson said the Chancellor had moved from “Santa Sunak” to “Scrooge Sunak”.

04:01 PM

And that's it for anther day...

Boris Johnson and Rishi Sunak have spent the day touting their levelling up agenda in Middlesbrough today, with the Chancellor defending his Budget from criticism that it doesn't go far enough (from Labour) or that it goes too far, with the Institute for Fiscal Studies branding him "Scrooge Sunak".

There is also the suggestion among many camps that he hasn't quite levelled with the public about the extent to which the pain will be felt - something which was reflected in today's poll, with 45 per cent saying the Budget was fair, but not honest, about how much tax will have to be paid. A further 27 per cent said was a dangerous move long-term.

Back in Westminster, Anneliese Dodds called for ministers to admit what is "over the horizon", while Mark Drakeford has told a committee that the United Kingdom is "over".

That might be a slight exaggeration, but one thing appears to be fully wrapped up is Sir Philip Rutnam's claims against the Government, thanks to a "substantial settlement".

For all that, and the rest of the day's news, read on.

03:54 PM

Home Office 'does not accept liability' in Rutnam case

The Home Office has said it "does not accept liability", after a settlement was agreed with Sir Philip Rutnam (see posts below).

A Home Office spokesman said: "The Government and Sir Philip's representatives have jointly concluded that it is in both parties' best interests to reach a settlement at this stage rather than continuing to prepare for an employment tribunal.

"The Government does not accept liability in this matter and it was right that the Government defended the case."

03:46 PM

The United Kingdom 'as it is, is over', says Wales' First Minister

The First Minister of Wales said the United Kingdom "as it is, is over", and a new union should be crafted to reflect a "voluntary association of four nations".

Mark Drakeford said the UK was in danger if politicians only offered a "tweaking of the status quo", adding that the coronavirus pandemic has led to a rise in support for Welsh independence as well as for reversing devolution in Wales.

He told the Welsh Affairs Committee: "I do think the effect of the pandemic and the last 12 months has been to polarise opinion in Wales about the way it should be governed.

"What we have to do - to quote a Conservative member of the Senedd, David Melding - is we have to recognise that the union as it is, is over. We have to create a new union.

"We have to demonstrate to people how we can recraft the UK in a way that recognises it as a voluntary association of four nations, in which we choose to pool our sovereignty for common purposes and for common benefits."

03:34 PM

Government 'regrets the circumstances' around Sir Philip Rutnam's resignation

The Government said it "regrets the circumstances surrounding Sir Philip's resignation", after agreeing a settlement with the former civil servant.

In a statement posted online, the Government said: "Joining the civil service in 1987, Sir Philip is a distinguished public servant. During this period he held some of the most senior positions in the Civil Service including as permanent secretary of the Department for Transport and the Home Office.

"The then cabinet secretary wrote to Sir Philip when he resigned. This letter recognises his devoted public service and excellent contribution; the commitment and dedication with which he approached his senior leadership roles; and the way in which his conduct upheld the values inherent in public service.

"The Government regrets the circumstances surrounding Sir Philip's resignation. The Government and Sir Philip are now pleased that a settlement has been reached to these proceedings."

03:31 PM

Sir Philip Rutnam accepts settlement on constructive dismissal case

Sir Philip Rutnam, who quit as the Home Office's permanent secretary after accusing Priti Patel of a "vicious and orchestrated briefing campaign" against him, said the Government has settled the claims he brought against it.

The former civil servant issued a statement saying: "I am pleased to say that the Government has today settled the claims that I brought against them and which were due to be heard in an employment tribunal in September.

"I have received excellent support during this process and I would like to express warm thanks to the FDA and to my legal team, Slater and Gordon and Gavin Mansfield QC. I also want to record my appreciation and thanks to the many individuals, known and unknown to me, who have expressed their support throughout.

"This settlement resolves my own case. The FDA is continuing to pursue in separate proceedings the wider issues that have been raised.

"I now look forward to the next stages of my career."

Sir Philip, who resigned last year, has agreed a "substantial settlement", the BBC reports.

03:24 PM

Chopper's Politics: It won't be too long before we're talking about tax cuts again

The economy will recover more quickly than most people anticipate, says a leading economist.

Julian Jessop, Economics Fellow at the Institute of Economic Affairs thinks that the Office for Budget Responsibility's forecasts are "too pessimistic" and that "the economy will rebound much more quickly than they anticipate now once the brakes are taken off".

Mr Jessop told Chopper's Politics podcast: "I think there's an enormous amount of pent up demand here, we're all desperate to go out and spend, and I think businesses will want to spend a lot more as well. So I think we could get back to pretty severe levels of economic activity even later this year, let alone in the middle of next year, as the OBR expects."

Listen to the full interview below.

03:21 PM

Further 184 Covid deaths registered in England

A further 184 people who tested positive for coronavirus have died in hospital in England, bringing the total number of confirmed deaths reported in hospitals to 83,917, NHS England said on Thursday.

Patients were aged between 19 and 98. All except six, aged between 47 and 85, had known underlying health conditions.

The deaths were between November 19 and March 3, with the majority being on or after February 28.

The Midlands was the worst-affected region, with 45 deaths, followed by the North West, with 30 deaths, and the East of England, with 27 deaths.

There were 25 deaths registered in the South East, 23 in the North East & Yorkshire, 22 in London and 12 in the South West.

03:13 PM

Boris Johnson 'horrified' by Myanmar killings

Prime Minister Boris Johnson has said he is "horrified" by intensified clashes in Myanmar.

At least 38 people were killed yesterday after Myanmar’s security forces opened fire on peaceful anti-coup protesters in multiple towns and cities, in the worst day of violence since the military coup last month.

He tweeted: "I'm horrified by the escalation of violence in Myanmar and the killing of pro-democracy protesters.

"We stand with the people of Myanmar in calling for an immediate end to military repression, the release of Aung San Suu Kyi and others, and the restoration of democracy."

03:04 PM

One in five adults under 65 have had Covid vaccine

Around one in five people aged 16 to 64 in England are likely to have had their first dose of Covid-19 vaccine, NHS England figures suggest.

An estimated 21.3 per cent of people in this age group had received their first jab by February 28.

The estimates show little variation between regions, ranging from 19 per cent in London to 23.4 per cent in north-west England.

Yesterday a further 275,003 doses were given out in England yesterday, of which 231,002 were first doses, and 44,001 second doses.

02:56 PM

Allister Heath: The Tories have trashed Thatcherism and embraced Europe’s politics of decline

For the past 50 years, the Tory party had believed that high tax rates, especially on income and profits, were bad for the economy and had strived to cut them.

Today, writes Allister Heath, this is no longer true.

Instead of acknowledging the hierarchy of taxes - that some damage the economy more than others - a nonsensical worldview has been adopted, in which taxation is a purely political choice, a tool to buy voters or signal virtue, not a driver of economic success or failure.

Read the rest of his column here.

02:42 PM

Covid case rates fall across England in all age groups

Covid-19 case rates are continuing to fall in all regions of England, according to the latest weekly surveillance report from Public Health England.

In the East Midlands, the rate of new cases stood at 120.8 per 100,000 people in the seven days to February 28 - the highest rate of any region, but down from 170.5 the previous week. Yorkshire & the Humber recorded the second highest rate at 113.6, down from 154.0.

South-west England recorded the lowest rate of 43.2, down from 68.5.

Case rates are also falling among all age groups. The highest rate is among 30 to 39-year-olds, at 121.1 cases per 100,000 people in the seven days to February 28, down week-on-week from 178.3.

Among 20 to 29-year-olds the rate dropped from 161.3 to 111.3, and for 40 to 49-year-olds it fell from 148.0 to 102.0.

For people aged 80 and over, the rate fell from 101.8 to 65.0.

02:32 PM

Tell country what is 'waiting over the horizon', Labour demands of minister

Shadow chancellor Anneliese Dodds said that people have a right to know what is "waiting over the horizon" with proposed cuts.

Speaking in the Commons, she told MPs: "The Chancellor promised openness and honesty at this Budget. Well let me ask [Work and Pensions Secretary Therese Coffey] for some openness and honesty now - where are those cuts going to fall?

"Will they be felt in fewer police officers? Fewer further education opportunities for young people? Poorer quality social care for the elderly? And what action will the Government take to protect people when the income tax personal allowance is frozen next year?"

Ms Dodds added: "People have a right to know what's waiting over the horizon because it looks an awful lot like what's come before."

02:21 PM

Lack of social care plan 'a stain on our nation', says Sir Andrew Dilnot

Boris Johnson's failure to bring forward a plan for social care is "a stain on our nation", Sir Andrew Dilnot has said.

Yesterday Rishi Sunak failed to mention social care in his Budget and suggested a plan was still being worked on, despite the Prime Minister declaring he had one ready after winning the 2019 election.

Today, Sir Andrew - who led a review into the sector - said a plan must involve funding for council-delivered means-tested social care while creating "some form of social insurance" for the population to "pool the risk" should they need care later in life.

It would require £7-10 billion extra per year.

Sir Andrew told BBC Radio 4's World At One: "We know how to do this, we just need to get on and do it. The Prime Minister not only said he would do it when he came to office but he said again in his conference speech in the autumn of last year that he would.

"The time is now absolutely ripe, so what I think we have to hope for is that in the Spending Review discussions over the summer, we get this done. It is a stain on our nation that we haven't."

02:17 PM

Three terror attacks foiled since pandemic began, police reveal

Police and UK intelligence services have foiled three terror attacks since the beginning of the coronavirus pandemic.

Counter Terrorism Policing disclosed the information as Home Office figures showed the number of arrests for terrorism-related activity fell by 34 per cent in 2020, the lowest level in nine years.

Despite this, the number of terror plots prevented has risen to 28 since March 2017, police said.

Deputy Assistant Commissioner Dean Haydon, the senior national coordinator for Counter Terrorism Policing, said: "While the rest of us have been focused on protecting ourselves and our families from this terrible disease, terrorists have not stopped planning attacks or radicalising vulnerable people online.

"As we follow the Government's road map out of the tightest restrictions there will be greater opportunity for terrorists to operate, and we want the public to join the police, security staff and retail workers in a collective community effort to minimise the chance of attack."

02:15 PM

Lobby latest: Over-80s told to stick with lockdown as data suggests rule-breaking on the rise

Downing Street urged people to continue to respect the lockdown after an Office for National Statistics (ONS) survey suggested more than four in 10 over-80s who received a coronavirus vaccine during the current lockdown appear to have since broken the rules.

The Prime Minister's official spokesman said: "It's important that people continue to follow the guidelines that are in place."

Asked if the elderly were behaving irresponsibly, the spokesman said: "We are asking everybody to continue to follow the rules and guidelines."

02:06 PM

Have your say: Is Rishi Sunak's Budget fair, honest and feasible?

Experts are now giving their verdict on Rishi Sunak's Budget yesterday, with the Institute for Fiscal Studies saying it "doesn't look deliverable" and he could be "taking a gamble" with the future recovery.

The Resolution Foundation has said that while business groups and Conservative MPs have not opposed the tax rises currently, things might get more challenging in two years' time.

Rachel Wolf, who co-wrote the 2019 manifesto, has suggested that the Chancellor is hoping he won't have to make all the tax rises he announced yesterday.

But if he does, Mr Sunak this morning insisted they were "fair" and "progressive" with the heaviest burden falling on the richest people's shoulders.

But what do you think? Have your say in the poll below.

01:47 PM

Lobby latest: Boris Johnson sticks by Cabinet Secretary amid latest Royal row

Boris Johnson has full confidence in Cabinet Secretary Simon Case, who was formerly the Duke of Cambridge's private secretary, Downing Street has said - but refused to comment on the latest Royal row.

Mr Case was reportedly told about bullying allegations against the Duchess of Sussex in 2018. Buckingham Palace has now launched an investigation into claims that the duchess bullied former royal staff.

Pressed on whether Mr Johnson had confidence in his senior official, the spokesman said: "Yes, he does."

The Prime Minister's press secretary Allegra Stratton said Mr Johnson and Mr Case wrote to Government ministers last year in the wake of the Priti Patel row making it clear there was "no place for bullying" in government.

Asked whether that extended to public life more broadly, she said: "The particular case you are talking about is a matter for the palace."

01:35 PM

Labour calls on Boris Johnson to 'show leadership' on Northern Ireland

Labour has called on Boris Johnson to “show leadership” and take “personal responsibility" for maintaining stability in Northern Ireland.

The Loyalist Communities Council have written to him, announcing the withdrawal of support for the Belfast/Good Friday Agreement, an act which Arlene Foster has said was "very concerning" (12:39pm), although chief constable Simon Byrne said it was a "political move" (see 1:14pm). The Prime Minister appeared not to have seen the letter.

Louise Haigh, shadow Northern Ireland secretary, said the challenges facing the nation "must be addressed through political leadership".

She adde: "The Prime Minister must take personal responsibility for finding lasting solutions that lower tension and make the protocol work. Unilaterally undermining his own agreement has only provoked further instability.

"He should show leadership and hold urgent talks with all parties to the protocol, and Northern Ireland’s political parties, to ensure the voice of all communities is being heard loud and clear."

01:26 PM

Lobby latest: No 10 reaffirms commitment to Good Friday Agreement

Downing Street restated its commitment to the Belfast/Good Friday Agreement following the withdrawal of loyalist paramilitary support for Northern Ireland's historic peace deal.

The Loyalist Community Council has written to the Prime Minister withdrawing support for the agreement.

The Prime Minister's official spokesman said: "We are fully committed to the Belfast/Good Friday Agreement."

The Government "will continue to work to safeguard Northern Ireland's integral place in the United Kingdom" and to prevent a hard border on the island of Ireland.

"We are determined to protect the agreement in all of its dimensions."

01:21 PM

Lobby latest: Brussels and Dublin were told of grace period move, says No 10

Brussels and Dublin were informed in advance about the unilateral decision to extend the grace period on trade moving from Britain to Northern Ireland, Downing Street has said.

The move, extending the end of the period from March to September, was announced yesterday, provoking threats of legal action and retaliatory measures (see 11:38am).

The Prime Minister's official spokesman said: "We notified the European Commission at official level earlier this week.

"We also informed the Irish government earlier this week and then Lord Frost last night in his call to (European Commission vice-president Maros) Sefcovic obviously discussed this at length and set out the rationale and the reasons for it."

01:18 PM

Lobby latest: Downing Street rejects Ireland's claim that EU 'simply can't trust' UK

Downing Street rejected Irish foreign minister Simon Coveney's assessment that the EU is negotiating with a partner it "simply cannot trust" (see post 12:52pm).

The Prime Minister's official spokesman said: "Obviously we wouldn't accept that characterisation.

"We have worked closely with the EU throughout the Brexit period, not just in terms of the Northern Ireland Protocol but with regards to the TCA (trade and co-operation agreement) that we agreed at Christmas time.

"We continue to work closely with them through the Joint Committee process and remain committed to the Northern Ireland Protocol but we want to address those areas where there are issues that have arisen."

01:14 PM

Loyalist withdrawal from peace agreement 'a political move', says Northern Ireland police chief

Northern Ireland's chief constable Simon Byrne has said he does not believe loyalists are likely to return to violence.

He described a letter from the Loyalist Community Council to the Prime Minister withdrawing support for the Good Friday/Belfast agreement as a "political move".

He told the Northern Ireland Policing Board: "We don't see the prospect of a return to protest or violence. We are prudently looking at an assessment of what that means in terms of a policing response or indeed any need to change our posture over the weeks ahead."

Mr Byrne said there has been 200 incidents since the start of January related to opposition to the Northern Ireland Protocol, predominantly criminal damage, graffiti or the erection of posters and banners that signal a lack of support for the protocol.

"We are keeping an eye on that," he said.

01:03 PM

Boris Johnson hails 'fantastic news' about suspension of tariffs

Boris Johnson has hailed the US' agreement to suspect tariffs on Scotch whisky and other UK products today (see 12pm).

The Prime Minister - who earlier today posted a video renouncing his former love of "late night cheese" - said the decision would boost businesses from "Scotch whisky distillers to Stilton-makers".

"Fantastic news as we strengthen the UK-US trading relationship and work to build back better from the pandemic," he said.

12:58 PM

Boris Johnson fails to commit to meeting Harry Dunn's family

Boris Johnson would not say whether he would commit to meeting Harry Dunn's family when questioned by journalists on Thursday.

The Prime Minister, speaking on a visit to Teesport in Middlesbrough, said: "I've got massive sympathy with Harry Dunn's family and all his friends and everybody bitterly regrets what happened.

"We continue at the highest level to raise this with the United States and I know that the Foreign Secretary has only recently raised it with Tony Blinken, the US secretary of state.

"We will continue to do whatever we can to get justice for Harry Dunn."

12:52 PM

EU 'cannot trust' UK over Northern Ireland protocol, claims Ireland's foreign minister

The EU is negotiating with a partner it "simply cannot trust", Ireland's foreign minister has said, after the UK unilaterally decided to extend the post-Brexit grace period by several months.

Yesterday the Government announced the transitional light-touch checks across the Irish Sea border would be rolled over until the end of September, something Simon Coveney described as "very frustrating". They had been due to expire this month.

Speaking on RTE Radio 1, Mr Coveney said: "This is not the first time this has happened, that they are negotiating with a partner that they simply cannot trust. That is why the EU is now looking at legal options and legal actions which effectively means a much more formalised and rigid negotiation process as opposed to a process of partnership where you try to solve problems together, so this is really unwelcome.

"It's the British Government essentially breaking the protocol, breaking their own commitments again, and the EU having to then consider how they respond to that."

It comes as Northern Irish loyalist paramilitary organisations told Boris Johnson they are temporarily withdrawing support for the Good Friday Agreement.

12:39 PM

Paramilitary withdrawal from Good Friday Agreement 'very concerning', says Arlene Foster

Arlene Foster has said the decision by loyalist paramilitaries to withdraw support for the Belfast or Good Friday Agreement is "very concerning", as she blamed the protocol for making it impossible.

The First Minister told Sky News she welcomed their commitment to continue a "peaceful path" approach, saying it was "important people recognise this".

But she added: "It is very concerning that people who supported the Belfast agreement feel they can no longer to that because of the protocol... they were great supporters at the time."

Extending the grace periods until September was "a sticking plaster", she added, as she called for a permanent solution.

"We will purse every legal and political line to get through that this is not working for Northern Ireland, and this is causing damage," she said, adding she was "disappointed to hear reaction of the Irish govt", arguing it was "simply not the case" that the UK Government had broken the law.

12:32 PM

Boris Johnson 'certainly won't' comment on Harry and Meghan

The Prime Minister said he "certainly won't" be passing comment on the latest developments regarding the royal family.

"I think that politicians, the best thing politicians can do on all these questions is really to bite their tongue," he told broadcasters during a trip to Teesport in the North East.

However you can read Camilla Tominey's analysis of the latest Royal Family saga here: Timing of bullying allegations could not be worse for Brand Harry and Meghan

12:29 PM

Boris Johnson defends Government spending on health care

Boris Johnson has defended Government spending on health and social care, amid criticism that the Budget cut funding to the sector.

The Prime Minister said "huge quantities" had been invested throughout the pandemic.

Wednesday's Budget documents revealed that there is a planned cut of £30 billion in day-to-day spending from April of this year.

Pressed on why there was no pay rise for health and social care workers in the Budget, Mr Johnson said: "A lot of these are obviously in the private sector, the care home workers.

"What we've done is had record increases in the living wage, and again the living wage will be going up, which will be supported by the Government, again in April. Our debt to those workers is massive."

12:27 PM

Boris Johnson reveals his 'ancestors were bakers in Darlington'

Moving hundreds of Treasury jobs to Darlington will be "fantastic", Boris Johnson has said, as he revealed his "ancestors" were bakers in the town.

Speaking to reporters on a visit to Teesport, Middlesbrough, the Prime Minister said: "I think it will be a fantastic thing to have an economic campus in Darlington - it'll take a bit of time to get going but there will be 750 jobs.

"I can tell them (Treasury workers) it is a wonderful place. My ancestors actually were bakers in Darlington, you may be interested to discover.

"So they have been making the dough for the nation for a long time."

12:23 PM

Boris Johnson: Good will and common sense will prevail in Northern Ireland

The Prime Minister said "good will and common sense" would help to solve the issues around post-Brexit trade in Northern Ireland.

Boris Johnson made the comments after being asked what he made of the Loyalist Communities Council (LCC) umbrella group saying it had written to the Prime Minister to tell him the main loyalist paramilitary groups were withdrawing support for the Good Friday/Belfast agreement amid mounting concerns about the arrangements governing Irish Sea trade post-Brexit.

Speaking to broadcasters at Teesport, Middlesbrough, Mr Johnson said: "I haven't seen which groups you're talking about. But what I can say is we are taking some temporary and technical measures to ensure that there are no barriers in the Irish Sea, to make sure things flow freely between GB and NI and that's what you would expect.

"Obviously these are matters for continuing intensive discussions with our friends. I'm sure with a bit of good will and common sense all these technical problems are eminently solvable."

12:23 PM

Boris Johnson hits back against claims that towns funding was 'dodgy'

The Prime Minister said the criteria used to determine which areas received town deal funding was "entirely objective", after Labour leader Sir Keir Starmer said it "looked fishy" (see below).

More than £1 billion is to be given for 45 new so-called bespoke "town deals", with 40 of the towns represented by Conservative MPs.

But on a visit to Teesport in Middlesbrough, Boris Johnson said this was because after the election "there are a lot of Conservative represented towns".

He added: "I've asked about this and I'm told that the criteria was entirely objective - it takes in data on poverty, employment and so on. We want to unite and level-up across the whole country and want to do it in a completely impartial way, so that's what we are doing."

Pointing to free ports as an example of so-called "levelling-up", Mr Johnson added: "That is part of uniting and levelling up and if some places have missed out for now or feel they have missed out, then we will make sure we come back and think about the things they need and get on and do it."

12:18 PM

Labour slams Rishi Sunak over cuts to NHS funding

Labour has attacked Rishi Sunak for cutting funding to the NHS, after the boss of the Office for Budget Responsibility raised a warning about a lack of provision for Covid costs after this year, including funding 'catch-up' services affected bythe pandemic (see 8:09am).

Rishi Sunak has insisted that the £4bn cut in funding is an "adjustment", with spending set to remain at historical highs, as well as saying future costs will be addressed in a Spending Review later this year (see 8:28am).

But Jon Ashworth, shadow health secretary, said: “Time after time throughout the health crisis Rishi Sunak had got the Covid calls wrong.

“It’s shocking he’s now cutting NHS funding when we must do everything to defeat this deadly virus and bring waiting times down for surgery and cancer care.”

12:00 PM

US suspends Scotch whisky tariffs in bid to win down Trump trade war

The United States has suspended tariffs on Scotch whisky and other UK produce, as part of a winding down of the trade war escalated by Donald Trump.

Under Joe Biden, the US has agreed to temporarily suspend all retaliatory tariffs on direct exports from the UK to the US resulting from the Airbus dispute for four months, in an effort to reach a negotiation solution to the 16- year long dispute.

The move follows the International Trade Secretary’s decision to suspend Boeing tariffs against the US from January.

Liz Truss said: "I am delighted to say that our American allies – under their new President and his hard-working staff at the US Trade Representative - have embraced our move to seek a fair settlement. This is Global Britain in action."

She added: "Today’s agreement shows that both the UK and the US are determined to work together to build back better and take our trading relationship to new heights.”

11:48 AM

Chancellor gone from 'Santa Sunak' to 'Scrooge' with Budget, says IFS boss

The Chancellor is looking less like "Santa Sunak" and more like "Scrooge Sunak", the director of the Institute for Fiscal Studies has said.

The £4bn public spending cuts were painted as "a purely mechanical change", but would actually cause more pain on top of the "screeching U-turns" of tax rises, Paul Johnson said.

The corporation tax rise to 25 per cent by 2023 would take the UK "well up the international league table" for revenues, he said, but it was "50-50 at best" whether it would actually happen without additional concessions.

"This was, of course, a tale of two Budgets," said Mr Johnson.

"By the end of the forecast period, we are looking at a fiscal tightening of over £30bn relative to previous plans.

"Take account of the cuts to planned spending announced in the autumn and Santa Sunak, purveyor of billions today, looks more like Scrooge Sunak, cutting spending and raising taxes to the tune of nearly £50bn relative to his pre-pandemic plans of March 2020."

11:38 AM

Brussels mulls retaliation for UK unilateral action in Northern Ireland

Brussels could hit Britain with legal action, suspend the trade deal with the UK and block the City of London from the Single Market in retaliation for Boris Johnson's unilateral delaying of the implementation of the Northern Ireland Protocol.

Mairead McGuinness, the EU financial services commissioner, said it was important to “send a message” to Britain about Brexit, as the fall-out from Wednesday’s announcement that Britain would delay grace periods on checks on GB food imports to Northern Ireland continued.

Ms McGuinness warned the unilateral move could have ramifications for ongoing “equivalence” negotiations aimed at granting UK financial services access to the EU’s Single Market.

"Things like that don't help build trust," the Irish politician said at a Politico event in Brussels.

Read the full article here.

11:31 AM

Towns fund allocation to Conservative areas 'looks fishy', says Sir Keir Starmer

Sir Keir Starmer has suggested the way the Government's £1bn towns fund cash was being allocated "looks fishy".

Yesterday it emerged that 40 out of 45 towns whose bids had been approved were represented by Conservative MPs, although Rishi Sunak told journalists last night the formula was "based on an index of economic need, which is transparently published actually I think by MHCLG based on a bunch of objective measures.”

Today the Labour leader told reporters: "We have no issue with areas getting funding, of course we need funding across the whole of the UK. We have had a decade where the economy has been stalling, there needs to be investment, we all want to see that funding going in.

"But it has got to go in properly, to the areas that most need it, and it has got to go in in a transparent way.

"If you end up with a list of 45 areas where the funding is going in and, by coincidence, 40 of them are where there is a Conservative MP, most people would say 'what's going on here, this looks fishy'."

11:18 AM

Covid bill will take 'decades' to pay off, warns Rishi Sunak

Rishi Sunak has said it will take "many years, decades and governments" to pay off the £407bn cost of Covid, following yesterday's Budget.

The Chancellor said his statement would start the process, and "stop the problem getting worse".

He told BBC Breakfast: "The shock that coronavirus has done to our economy has been significant and as I said yesterday, this won't be fixed overnight.

"It will be the work of many years, decades and governments to fully pay all that money back, but it is important that we get our borrowing and debt under control so it stops going up even after we've recovered."

The Budget would help "stabilise things", he added.

"That's what the forecasts from yesterday show, that we stop the problem from getting worse and hopefully start improving it over the medium term."

11:16 AM

Rishi Sunak 'hid' Budget cut to NHS, claims Labour eader

Labour leader Sir Keir Starmer has attacked Rishi Sunak over his "astonishing" decision to cut day-to-day funding for the NHS, saying it was "hidden in that Budget".

Speaking at the Royal Derby Hospital, which he said was "still struggling with Covid cases", he said: "What's coming next is the backlog of cases - 4.5 million people on waiting lists, understandably not been dealt with in the last year, so the NHS is going to have a really hard year and I think most people will be pretty astonished that the funding is being cut."

The Budget documents revealed that there is a planned cut of £30 billion in day-to-day spending at the Department for Health and Social Care from April of this year, falling from £199.2 billion to £169.1 billion.

NHS England will see funding fall from £147.7 billion to £139.1 billion from next year, unless ministers commit to more funding for the health service. Mr Sunak said it was an "adjustment", and that funding would remain at "historic" highs.

Sir Keir said: "If you don't fund the NHS day-to-day you are heading for trouble and if we have a health crisis we are going to have an economic crisis and so the two are linked."

11:02 AM

In pictures: Boris Johnson and Rishi Sunak fly the flag for levelling up

Boris Johnson and Rishi Sunak are visiting Teesport in Middlesbrough today, following a series of announcements such as freeports, Treasury North and the towns fund, in yesterday's Budget designed to appeal to voters in the area.

10:52 AM

Labour hits out at Rishi Sunak's social care claim

Labour has hit out at Rishi Sunak's suggestion that the absence of a plan for social care was because he was waiting for a cross-party plan to be put together (see 8:24am).

Liz Kendall, shadow social care minister, said: "There was nothing in the Budget on social care, despite everything that has happened during this pandemic and the Prime Minister’s promise on the steps of Downing St to fix the crisis in social care more than 18 months ago.

“Today the Chancellor claimed this gaping hole is because the Government is trying to build cross party consensus about the way forward. Yet this has not been discussed or even raised with Labour’s front bench team, despite our repeatedly asking the Care Minister about this issue.

“Our society and economy need a care system that is fit for the future. Ministers must bring forward plans for reform as a matter of the utmost urgency and deliver on their promises to the British people.”

10:47 AM

Have your say: Is Rishi Sunak's Budget fair, honest and feasible?

Experts are now giving their verdict on Rishi Sunak's Budget yesterday, with the Institute for Fiscal Studies saying it "doesn't look deliverable" and he could be "taking a gamble" with the future recovery.

The Resolution Foundation has said that while business groups and Conservative MPs have not opposed the tax rises currently, things might get more challenging in two years' time.

Rachel Wolf, who co-wrote the 2019 manifesto, has suggested that the Chancellor is hoping he won't have to make all the tax rises he announced yesterday.

But if he does, Mr Sunak this morning insisted they were "progressive" with the heaviest burden falling on the richest people's shoulders.

But what do you think? Have your say in the poll below.

10:39 AM

Rishi Sunak's 'big change' in tax approach likely to be challenged in two years, says think tank head

Rishi Sunak's Budget represents a a "very big change around" in the Conservative approach to taxation - but it is unlikely to go unchallenged, the head of a think tank has said.

Torsten Bell, chief executive of the Resolution Foundation economic think tank, said the Chancellor's big rise in corporation tax raised "serious questions both on where investment is going to come from in the years ahead - remember, it's not just this pandemic we are going through, it's Brexit plus this at the same time".

"Do Tory MPs agree with the Chancellor that the bit of Conservatism you need to hold on to is fiscal rectitude, not being low tax, or would they rather be low tax and just borrow lots of money?"

Business groups had not complained too strongly because the tax rises were still some way off, but "I would be amazed if in two years the CBI is not saying 'it's absolutely bonkers that we are raising corporation tax to 25 per cent".

10:29 AM

Rishi Sunak hoping to avoid 'all these tax rises', says manifesto co-author

Rishi Sunak is hoping he will be able to avoid "having to do all of these tax rises", if the economy improves in time, the co-author of the 2019 manifesto has said.

Rachel Wolf, founding partner at research and PR consultancy Public First, told a Resolution Foundation event the Government had learned "perhaps quite late" that it is "better to under-promise and hope you can over-deliver".

She added: "I suspect that the Government very much hopes that it is not going to end up having to do all of these tax rises, or at the least it is going to be able to continue these investments in the long-term in a way that does change things for businesses."

She also suggested Mr Johnson may use a major intervention later in the year to set out how he hopes to reshape the country, noting the Budget was "fundamentally a wartime budget of a cautiously optimistic government, it was not a 'build back better' budget.

"That leaves a lot of room later in the year for probably the Prime Minister to say a lot about what he wants the future of the country to be."

10:21 AM

Levelling up about 'Tory MPs' leaflets' rather than addressing inequalities, claims Labour MP

A Labour MP has accused the Government of basing the levelling up agenda on giving Conservative MPs something to "put on their leaflets" rather than addressing regional inequalities.

Yesterday it emerged that 40 out of 45 towns being handed multi-million pound funding were represented by Tories, while the Treasury North hub is being moved to Darlington, also represented by a Tory MP.

Darren Jones, chair of the business select committee and MP for Bristol North West, told Sky News that his city might have "lost out" from its freeports bid because if twas represented by four Labour MPs.

He added: "The levelling up approach seems to be based more on what Conservative MPs can put on their leaflets as opposed to really levelling up the country...

"All we got was £4.1m for local transport projects -that doesn't go anywhere near the needs... of our growing population in the West of England."

10:10 AM

Boris Johnson 'full of beans' after weight loss as he confirms £100m obesity package

Boris Johnson said he is "doing all I can to lose weight" as he announced funding to help the public get "fitter and healthier".

Mr Johnson said he has been eating fewer carbs, avoiding chocolate and "no more late-night cheese", coupled with early morning runs and is now "full of beans".

It comes as the Government announced a £100 million package to help drive down levels of obesity - which increases a person's risk of dying from Covid-19 or severe disease, as well as a number of other health problems.

Mr Johnson became unwell with Covid-19 himself last year.

In a video posted to Twitter, Mr Johnson said: "I know there are many people in the same sort of position as I am, and I was, who want to lose weight. That's why we're investing now in that whole national objective."

10:08 AM

Variant vaccines will prompt 'difficult judgements' about future priorities, says MHRA boss

"Difficult judgments" will have to be made about the deployment of any modified coronavirus vaccines, the head of the medicines regulator MHRA has said.

Dr June Raine said: "We turn to the joint committee on vaccination and immunisation, who have a wealth of data to try and make these judgments.

"They are difficult judgments and we know that age is the prime risk.

"What we will do, if and when the situation arises that we need to move rapidly to deploy a vaccine that's effective against variants, we will be working closely to ensure that JCBI is absolutely ready to give the right advice on how it should be deployed.

"It will be done in the same independent way in terms of our own decision but working closely with the authorities that have to make these decisions about deployment."

09:52 AM

Rishi Sunak: 'Too early' to give backing to vaccine passports

Rishi Sunak has said it is "too early" to commit support to vaccine passports, while a review is currently under way.

Speaking to ITV's Good Morning Britain, the Chancellor said it was "a difficult and complicated question because it raises various practical, legal and ethical issues".

He added: "We are working through those, so the Prime Minister has a committee and we have not just ethicists but doctors and business people working together to look at that particular question, to consider all the issues in the round and come up with some recommendations in a few months' time and we will see if they can play a part."

Asked whether he was "minded to back" so-called vaccine passports, he said: "It would be too early for me to use a phrase like 'minded to'... there are some obvious challenges - some people are not able to, for health reasons, to get vaccinations. And then there is the practical aspect - how do we verify it, what kind of technology would one use, what circumstances would it be appropriate to use it?

"It is too early to say anyone is minded to do anything - that is quite a specific phrase - but I think it is right we go through all of that to surface what some of the issues and benefits might be and then we can decide and make a decision in the round in the coming months."

09:44 AM

Budget 2021: Rishi Sunak has signalled a big state 'out as far as the eye can see'

It feels a bit odd to talk about winners from this year's Budget, against the backdrop of the pandemic, says The Telegraph's financial columnist Ben Wright.

But nevertheless, there are clearly some groups - such as companies likely to remain shuttered for some time - who will be breathing a big sigh of relief that furlough has been extended until the autumn.

There is also more support for those on the lowest incomes, and potential house-buyers.

But larger companies, and millions affected by the frozen thresholds, will end up paying more tax.

But who is the real loser? Ben believes it could be those who believe in a Thatcherite world view, as we look set for a longer-term big state "out as far as the eye can see".

Watch his analysis below.

09:32 AM

2021 Budget winners and losers: use our tax calculator to see which you are

Millions of people will wind up paying more income tax as a result of Rishi Sunak's move to freeze the thresholds for income tax, inheritance tax, capital gains tax and the pensions lifetime allowance. Corporation tax is also due to jump in 2023.

But he also froze fuel duty and alcohol duty, extended stamp duty holiday and rolled out further support for individuals and businesses affected by Covid.

With all the different measures to factor in, are you a Budget winner or loser? Use our tool below to see.

09:23 AM

Budget 2021: Rishi Sunak 'going long' on Covid support with furlough extension

Rishi Sunak has extended furlough and other support past the roadmap deadline of June 21 to give businesses an "extra cushion".

Speaking to ITV's Good Morning Britain (GMB), the Chancellor said furlough would run until September because "I wanted people to have the reassurance that we were 'going long', beyond the end of the road map, because of course things might change".

He added: "We wanted to accommodate even the most cautious view of exiting from the restrictions - hopefully that won't happen, we are making great progress, and thanks to everyone involved in the vaccination drive for making that possible.

"But it is also important to remember that, just because the restrictions end, businesses will still need to take time to recover, things will take a bit of time to get back to the way they were, so I think it is important to provide that extra cushion."

09:17 AM

Planet Normal: Why this Budget has left the UK in the danger zone

Rishi Sunak had little choice but to keep borrowing and spending when he announced his Budget, but for Planet Normal hosts and Telegraph columnists Allison Pearson and Liam Halligan, it’s time to be honest about how he’s keeping the economy on life support.

"It doesn't work to keep creating money to effectively buy up your own debts, and now we're in the danger zone”, Halligan tells the podcast. “He’s not levelling with us or the world as a whole about that, and my fear is that that lack of transparency will come back to bite us.”

Co-host Allison Pearson agrees: “People are being bought off with their own money, aren't they? It's our children's money. It's our grandchildren's money."

Listen to that - and hear Lady Carnarvon, owner of Highclere Castle, make an impassioned case for reopening England’s heritage sites earlier than May - below.

09:12 AM

Matt Hancock confirms 'fast-track' plans for Covid variant vaccines

Matt Hancock has confirmed a new fast-track approach to approving new vaccines for coronavirus variants, which will avoid having to seek new approval or ‘lengthy’ clinical studies every time.

During a visit to Glasgow Lighthouse Lab, the Health Secretary said: "We will have a fast-track approach to safely approving future vaccines that work against a variant of Covid-19.

"The vaccine programme has clearly been a huge UK success story, and part of the reason that we have been able to develop the vaccines so far so quickly is because of the MHRA's rigorous yet flexible approach, which has been based entirely on looking as quickly as possible at the safety and efficacy of vaccines.

"I'm delighted that they're taking that same principled approach to the approval process for vaccines that may work against variants."

09:00 AM

UK's unilateral move to extend grace period 'very frustrating', says Ireland's foreign minister

Ireland's foreign affairs minister described the UK's latest Brexit actions as "very frustrating" and said the EU is negotiating with a partner it "simply cannot trust".

Speaking on RTE Radio 1, Simon Coveney said the British Government is breaking the Northern Ireland Protocol and its own commitments with its unilateral decision to continue Irish Sea border grace periods until October.

"This is not the first time this has happened that they are negotiating with a partner that they simply cannot trust," Mr Coveney said.

"That is why the EU is now looking at legal options and legal actions which effectively means a much more formalised and rigid negotiation process as opposed to a process of partnership where you try to solve problems together, so this is really unwelcome."

08:51 AM

Nicola Sturgeon 'polished' but lacking detail, says Holyrood committee member

Nicola Sturgeon put in a "very good performance" at the Holyrood committee yesterday, but was lacking detail, Scottish Labour deputy leader Jackie Baillie has said.

Ms Baillie, a member of the committee investigating the Government's unlawful investigation of former first minister Alex Salmond, told BBC Radio 4's Today programme: "It was very polished, as we've come to expect of her.

"But in the torrent of words that were exchanged over the eight hours I'm not sure that in some areas where we needed quite specific detailed answers that we actually got them."

A lack of information continued to be part of the problem in the committee's investigation, she added. "In my 22 years in Parliament, I have never been so obstructed, unable to do my job, as I have been on this committee."

She said not all the legal advice was handed over, meaning that questions about "key bits of the process" still cannot be asked.

08:38 AM

Budget 2021: Past corporation tax reduction didn't spur growth, says Rishi Sunak

Rishi Sunak has defended his decision to raise corporation tax, saying "it is an increase, but it is an increase that still means we are lower than all our competitors".

Asked if he no longer believed that raising taxes would actually choke growth and cut the tax take, he said "there are other ways to support businesses", highlighting his super deduction policy announced yesterday.

But challenged on comments made by Theresa May and others, that cutting corporation tax actually helps boost the total tax take, he said; "You need an internationally competitive tax environment to support businesses to grow.

"Corporation tax receipts have risen as corporation tax has come down but the vast majority, if not all the increase is probably more likely due to the cyclical recovery in corporation profits, which took a real hammering in the last crisis and have taken quite a long time to recover," he added.

"Over the last few years haven't seen that step change in the level of capital investment that businesses are doing as a result of those corporation tax reductions."

08:33 AM

Budget 2021: Rishi Sunak refuses to apologise for saying country should live without fear

Rishi Sunak has said he is "not going to apologise" for having taken a more hawkish approach to the lockdown, in light of the high death toll from the second wave.

The Chancellor has long been identified with the group of ministers pushing for restrictions to be lifted earlier, and critics claim his 'eat out to help out' scheme was unwise in hindsight.

Challenged over comments he made previously suggesting the country had to 'learn to live without fear' of the virus, he said: "This will hopefully become something like flu, which we do learn to live with... We are not going to completely ever eliminate Covid and so like flu it will be something we learn to live with but do so in a way that doesn't require the degree of restrictions endured over the last 12 months."

"But in terms of it having come back over the last year, I am not going to apologise for that. We are dealing with a hopefully once-in-a-generation situation."

There was "no playbook" he added, so it was "absolutely right we adjust our economic response" as the situation demanded.

08:28 AM

Budget 2021: Future Covid costs to be considered in Spending Review, says Rishi Sunak

Rishi Sunak has said he will be looking at how much to allocate to Covid costs later this year, after the OBR warned that there was no provision beyond 2021/22.

The Chancellor said he had already set out £55bn of "extra funding to deal with all the various Covid costs", with an extra £1.6bn announced during the Budget "particularly for the vaccine drive, dealing with the need for booster shots this autumn" among other things.

Asked about the next steps, he said: "We will have to look at it in the round when do Spending Review this year."

08:24 AM

Budget 2021: Social care funding will wait for cross-party plan, says Rishi Sunak

Rishi Sunak has defended the lack of any pledge to fix social care in the Budget yesterday, saying it will be based on a cross-party "consensus".

The Chancellor told Radio 4 it would "take some time and thought to get it right" and the focus for now remained tackling the virus.

"We are committed to finding a cross party solution to sustainable social care funding. It is important given the duration of social care funding. Right now our our focus is the pandemic, but the Health Secretary has started that work and if we can find consensus we will bring that forward."

He also stressed that the £4bn cut to spending on health was an "adjustment to previous spending plans", saying: "Underlying real growth in spending hasn't changed from the spending review."

The Government was committed to "delivering on our promises for more nurses, police officers, hospitals, and our levelling up agenda," he added. "Over the course of this parliament you will see public spending grow at historically high levels as we deliver on all of those commitments."

08:18 AM

Budget 2021: We are throwing everything we have at job creation, says Rishi Sunak

Rishi Sunak has defended the decision not to phase out the uplift to Universal Credit, saying it is "a more generous approach" to keep it in place in full.

The Chancellor also stressed the various forms of support in house, on housing and council tax, as well as the kickstart scheme and lifetime guarantee.

"Helping people into good quality work is absolutely our focus and as the economy reopens it is right that is our focus," he says. "We are throwing absolutely everything we have at protecting, supporting and creating as many jobs as possible."

08:16 AM

Budget 2021 will 'support recovery', says Rishi Sunak

Rishi Sunak has said his Budget will "support recovery" while continue being "generous" in support until well after the roadmap is due to complete.

Furlough and the Universal Credit uplift have been extended until September, while the roadmap sees the country reopened by June 21.

"The plan we set out yesterday takes the roadmap the Prime Minister outlined last week and builds on that," Mr Sunak told Rado 4's Today programme.

"It supports recovery in the timing of those measures but also is fair," he added.

Asked about the potential cliff edge when Universal Credit ends, he stressed the other benefits in place designed to get people back into work.

08:11 AM

Budget 2021: Labour calls for 'sensible financing solution for social care'

Labour has called for "a sensible financing solution for social care into the future", after the sector was missed out of yesterday's Budget.

Shadow chancellor Anneliese Dodds said the Government has said it will set out future plans to deal with the financing needs of social care "time and time again for years" but still has not produced a necessary plan.

She told the Today programme: "We cannot continue as we are currently. I think we've seen in particular the situation for pay for so many social care workers is totally unacceptable.

"They've been the heroes of this crisis and yet they have not been valued in the way that they need to.

"So there needs to be a long-term approach to this, and I would say that actually that's been a consistent problem with Conservative-led governments - they've not faced up to the long-term problems in social care, not just funding, but delivery as well."

08:09 AM

Budget 2021: OBR raises warning over lack of cash for Covid after this year

The Government has failed to set aside enough to cover the cost of Covid beyond the financial year, the chairman of the Office for Budget Responsibility (OBR) has said .

Richard Hughes told BBC Radio 4's Today programme that while there were plenty of additional resources for the current year, Rishi Sunak's Budget "provided basically no explicit additional resources beyond the coming financial year for the legacy of the pandemic for public services".

He added: "If we think we're going to need an annual re-vaccination programme, an ongoing test and trace capacity, to catch up on all the operations which the NHS hasn't been able to do over the past year...

"At the moment the Government hasn't set aside any additional resources for that activity, and in fact what it's done is cut about £15 billion of non-Covid spending beyond next year.

"So it's actually set itself up for more difficult spending rounds coming up this autumn, because it's put aside even fewer resources to deal with those those legacy issues coming out of the pandemic."

08:02 AM

Richest will pay 15-times what poorest pay in 'progressive' Budget, says Rishi Sunak

Rishi Sunak has defended his "progressive" Budget amid concerns over the freezing of personal tax thresholds, revealing that the richest in the country would pay 15-times what those on the lowest incomes face.

Under the Chancellor's plans unveiled yesterday, millions of people will pay more tax over the coming years, after he froze thresholds for income tax, inheritance tax, capital gains tax and the pensions lifetime allowance.

But challenged on this, he told Sky News: "Freezing personal tax thresholds is a progressive way to raise money... crucially what people need to understand is that no one's take-home pay that they have today is affected or lowered by this policy."

He added: "Those on higher incomes are affected more by this policy - it is a very progressive policy and that is something that has been noted by independent think tanks that are respected, like the Institute for Fiscal Studies (IFS) and others who have made the point that the richest 20 per cent of households, for example, will end up contributing I think 15 times more than those on the lowest incomes.

"That is why this is a fair way to help solve the problems that we need to."

07:48 AM

ICYMI: Rishi Sunak's five-year tax raid after Covid crisis

Rishi Sunak has announced a five-year personal tax raid that will bring in more than £21 billion as the bill for vast Government spending during the Covid pandemic was laid bare.

The Chancellor froze thresholds for income tax, inheritance tax, capital gains tax and the pensions lifetime allowance, meaning millions of people will pay more to the Treasury. Corporation tax would jump from 19 per cent to 25 per cent in April 2023, although most smaller businesses will be spared the rise.

Revealing his Budget in the House of Commons, he did not hide from the tax hikes, saying: "I recognise they might not be popular. But they are honest." It means Britain now has a tax burden higher than at any time since the 1960s, according to the Office for Budget Responsibility.

The Government's total Covid economic support was pushed beyond £350 billion as furlough and other major relief schemes were extended to the autumn.

Meanwhile, the UK now has its highest level of borrowing since the Second World War following a 10 per cent shrinking of the economy that was the largest fall in 300 years.