Budget 2021: what’s really going on in the UK economy?

Rishi Sunak will be looking at key indicators such as GDP growth, public debt levels and inflation as he draws up his autumn budget

Britain’s economic recovery from Covid is at growing risk from severe shortages of workers and materials, as well as mounting living costs for households, as Rishi Sunak prepares his budget and spending review.

Here are five key charts that will underpin the chancellor’s statement on Wednesday afternoon.

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Rishi Sunak will use budget to declare ‘age of optimism’

Chancellor to strike upbeat tone despite cost-of-living crisis, with spending pledges worth billions

Rishi Sunak will use his budget to insist the UK is entering an economic “age of optimism” despite a looming cost-of-living crisis, after making a deluge of promises to spend billions more on health, transport and skills.

In an attempt to strike an upbeat tone during his second budget on Wednesday, the chancellor will say his aim is to create a “new economy post-Covid”.

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Covid measures ‘plan C’ has been discussed, senior official tells MPs

Chief scientific adviser for Department of Health refers to tougher proposal beyond ‘plan B’ that has ‘not been extensively worked up’

A “plan C” for tougher coronavirus restrictions has been discussed in official circles, a senior civil servant has confirmed, despite ministers denying that tougher measures are an option this Christmas should the rate of new cases continue to rise.

The indication of planning for potentially harsher restrictions comes as senior scientists and Labour push for the rollout of “plan B”, an existing package of “light-touch” measures including advice to work from home and compulsory face masks in some settings.

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Treasury could raise £16bn a year if shares and property were taxed like salaries

Exclusive analysis of 540,000 wealthiest individuals in the UK shows effects of low capital gains tax

The government could raise an extra £16bn a year if the low tax rates on profits from shares and property were increased and brought back into line with taxes on salaries.

Exclusive analysis of data on the 540,000 wealthiest individuals in the UK – the top 1% – shows how decades of low taxes on capital gains, a type of income mainly available to the wealthiest in society, is creating a new breed of “super-gainers”.

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The psychology of masks: why have so many people stopped covering their faces?

In England, masks are expected and recommended in crowded and enclosed spaces – but not legally required. Many have abandoned them altogether. What would convince everyone to put them back on?

Dave stopped wearing his face mask “the second I didn’t have to. I grudgingly wore it, because it was the right thing to do and because it was mandatory,” says the teacher from East Sussex. “But I felt, and still do, that the reason we were told to wear masks was to make scared people feel less scared.” He didn’t feel awkward abandoning his mask, he says, as “hardly anybody bothers”, but he will put one on when visiting the vet, pharmacist or doctor, because he knows they want him to. “I feel it’s the respectful thing to do, but it’s a bit of theatre.”

Every month since July, when the legal requirement to wear face masks – along with other restrictions – ended in England, the number of mask-wearers has dropped. In figures released by the Office for National Statistics (ONS) last week, 82% of adults reported they had worn a mask outside their home in the previous seven days – a drop from 86% the previous month. But that seems high to me. In my own highly unscientific survey of people coming out of a shopping centre in a south coast town centre last week, only around one in 25 were wearing a mask and overwhelmingly they tended to be older people – the most vulnerable social group. “When everyone else stopped, I stopped,” says Holly. Her friend Chantelle works in a supermarket and also hasn’t worn a mask since July. Does she mind customers not wearing masks? “Not really,” she says, “because I’m not wearing one. Doing an eight-hour shift in it was horrible.” Would they go back to wearing masks? “If we had to, then yeah, I would,” says Holly, but neither would by choice.

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David Frost says EU close to breaching Brexit deal over science programme

Minister ‘quite concerned’ about delay to finalising UK’s participation in €80bn Horizon Europe scheme

A fresh Brexit row has been blown open with Brussels after David Frost accused the EU of being close to breaching the trade deal struck last Christmas.

He said the UK was “getting quite concerned” about Brussels delaying ratification of the UK’s participation in the €80bn (£67bn) Horizon Europe research programme, costing British scientists their place in pan-European research programmes.

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Facebook whistleblower Frances Haugen calls for urgent external regulation

Ex-employee tells UK MPs Mark Zuckerberg ‘has unilateral control over 3bn people’ due to his position

Mark Zuckerberg “has unilateral control over 3 billion people” due to his unassailable position at the top of Facebook, the whistleblower Frances Haugen told MPs as she called for urgent external regulation to rein in the tech company’s management and reduce the harm being done to society.

Haugen, a former Facebook employee who released tens of thousands of damaging documents about its inner workings, travelled to London from the US for a parliamentary hearing and gave qualified backing to UK government proposals to regulate social media platforms and make them take some responsibility for content on their sites.

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Frances Haugen to testify to MPs about Facebook and online harm

Whistleblower and critic of Mark Zuckerberg will give evidence to MPs scrutinising online safety bill

The Facebook whistleblower is to give evidence to MPs and peers scrutinising the online safety bill, amid calls for a toughening up of the landmark legislation.

Frances Haugen has triggered a deep crisis at Mark Zuckerberg’s social media empire after she released tens of thousands of internal documents detailing the company’s failure to keep its users safe from harmful content. On Monday Haugen, 37, will testify in person at the joint committee scrutinising the draft online safety bill, a piece of legislation that places a duty of care on social media companies to protect users – with the threat of substantial fines if they fail to do so.

In the UK and Ireland, Samaritans can be contacted on 116 123 or email jo@samaritans.org or jo@samaritans.ie. In the US, the National Suicide Prevention Lifeline is 1-800-273-8255. In Australia, the crisis support service Lifeline is 13 11 14. Other international helplines can be found at www.befrienders.org.

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Labour accuses Sunak of ‘smoke and mirrors’ budget due to lack of new money

Chancellor concedes only 20% of transport funding boost is new and other commitments in £26bn spending plans are recycled

Labour has accused Rishi Sunak of presiding over a “smoke and mirrors” budget after he conceded that just 20% of his biggest single spending commitment unveiled before the speech is made up of new money.

The Treasury has committed to almost £26bn of spending in a rush of announcements before Wednesday’s budget and spending review. It is expected to contain no tax cuts and the chancellor has sought to reassure anxious Tory MPs that he is a fiscal Thatcherite at heart.

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Poorest countries to gain from new climate funding plan to break Cop26 impasse

Climate finance plan needed to gain backing of developing nations for any deal at Glasgow talks

The world’s poorest countries are set to benefit from a new climate funding plan to help them cope with the impacts of climate breakdown, in an effort to break the impasse between developed and developing countries at the UN Cop26 climate summit

The UK government, as Cop26 host, will unveil the proposals on Monday along with ministers from Germany and Canada, who have been charged with drawing up a plan for climate finance, needed to gain the backing of scores of developing countries for any deal at the talks, which open in Glasgow next Sunday.

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Nazanin Zaghari-Ratcliffe’s husband on second hunger strike in effort to free her

Richard Ratcliffe seeks to persuade Foreign Office to do more to secure wife’s release from prison in Iran

The husband of the jailed British-Iranian dual national Nazanin Zaghari-Ratcliffe has gone on hunger strike for a second time in an attempt to persuade the UK foreign secretary to do more to bring his wife back from detention in Iran. His hunger strike is to take place outside the Foreign Office in London.

Richard Ratcliffe took the radical step in desperation after the Iranian authorities said earlier this month that Nazanin had lost her appeal against a second prison sentence. She will return to jail for another year, and then subject to a travel ban for a further year after that.

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UK defence minister faces call for inquiry into 2012 killing of Kenyan woman

Inquest in Kenya in 2019 concluded that Agnes Wanjiru, 21, ‘was murdered by British soldiers’

The UK defence secretary, Ben Wallace, is facing calls to launch an investigation into a possible cover-up after no one was held responsible for the alleged killing of a 21-year old Kenyan woman by one or more off-duty British soldiers.

John Healey, the shadow defence secretary, described the 2012 killing of Agnes Wanjiru, a sex worker, as “dreadful” and called for Wallace to “take this more seriously”.

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Michael Gove ‘open’ to keeping Grenfell Tower as a memorial

Housing secretary’s intervention follows speculation that the building would be demolished because of structural fears

Michael Gove has signalled he will explore “retention” options to preserve Grenfell Tower as a memorial to the 72 people killed in the 2017 fire, a move that has been welcomed by relatives of the dead.

The new housing secretary’s intervention, weeks into his latest post, follows speculation that Grenfell would be demolished because of safety concerns. It is understood his predecessor, Robert Jenrick, had been briefed that the tower posed a risk to the local west London community with government-appointed structural engineers indicating it should be razed.

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UK ‘will not cave in over role of European court in NI protocol’

Government sources say talks with EU ‘constructive’ but ‘we are still far apart on big issues’

The UK government has described talks with the EU over the Northern Ireland Brexit protocol as “constructive” but insisted it was not about to cave in on its demands that the role of the European court of justice be scrapped.

Government sources dampened hopes of a breakthrough, saying the two sides were still “far apart on the big issues”.

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Cop26 climate deal will be harder than Paris accord, admits Sharma

Summit president says 2015 global emissions agreement a ‘framework’ but rules were left for future talks

Achieving a global climate deal in Glasgow in the next three weeks will be harder than signing the Paris agreement of 2015, the UK president-designate of the Cop26 talks has said.

Alok Sharma, the cabinet minister in charge of the UK-hosted talks, just over a week away, said the task would be to get nearly 200 countries to implement stringent cuts to their greenhouse gas emissions, in line with holding global temperature increases to within 1.5C of pre-industrial levels – a goal fast receding as global carbon output continues to climb.

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English schools struggle to cope as Covid wreaks havoc

Despite government narrative of a return to normality, schools in areas with high Covid rates lack support

Schools in England hit by high numbers of Covid-19 cases among staff and pupils have been forced to reinstate mask wearing, send whole year groups home to study online and in some cases close early for half-term as the pandemic continues to wreak havoc in education.

Despite the government narrative of a return to normality in classrooms, schools in areas with high coronavirus rates say they have struggled to function, with many staff off sick and problems securing supply teachers because of high demand.

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UK strikes trade deal with New Zealand – but it may add nothing to GDP

‘Groundbreaking’ agreement criticised by UK farmers is part of 10-year plan to pivot to Indo-Pacific

Britain has struck a trade deal with New Zealand, a key ally, as ministers hope to stem the country’s reliance on China – but the agreement is expected to add no value to the UK’s gross domestic product.

Despite the Department for International Trade heralding the deal as a “groundbreaking” achievement that was a “vital part” of Boris Johnson’s commitment to levelling up, the prime minister has been accused of selling out British farmers.

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MPs should set example with masks in battle against Covid, says Javid

Health secretary rejects calls for ‘plan B’ measures despite predicting infections could hit 100,000 a day

Politicians have a responsibility to set an example in the battle against Covid, including wearing masks in crowded spaces, Sajid Javid has suggested as he predicted new infections could hit a record 100,000 a day.

With the government under mounting pressure to impose measures to control the virus, Javid warned “this pandemic is not over” and insisted he would do “what it takes” to protect the health service. But he said: “We don’t believe that the pressures currently faced by the NHS are unsustainable.”

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Why is it business as usual in England while Covid infections rise?

Analysis: a winter plan has been set out but implementing it could be hampered by political squeamishness

More than 20 months into the Covid pandemic and with a tough winter looming, the public could be excused for having a distinct sense of deja vu.

Infection rates are rising sharply, scientists and senior NHS figures are sounding the alarm – but the business secretary, Kwasi Kwarteng, was touring the broadcast studios on Wednesday morning ruling out a lockdown in England and telling people “absolutely” to book their Christmas parties.

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Brexit and UK immigration policy ‘increasing risks to trafficking victims’

Damning report highlights greater risk of EU worker exploitation and vulnerability of undocumented migrants

A damning new report on trafficking in the UK has warned that Brexit and the Home Office’s new plan for immigration are increasing the risks to trafficking victims.

The report has also found links between terrorism and trafficking in cases involving families from the UK ending up with Islamic State in Syria and an increase in the recruitment of trafficking victims via social media.

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