Published: 01 March 2021
By Suzanne Evans, Director, Political Insight
A leak from the Office for Budget Responsibility suggests economic forecasts due alongside the Budget on Wednesday predict a faster recovery than expected with fewer tax rises needed, thanks to the success of the vaccine rollout. The FT has broken the story, outlining a £29 billion spending gap predicted by the OBR, against the £43 billion sum the Treasury feared would be the size of the fiscal hole by the end of this parliament.
A £5bn scheme for High Street shops and hospitality firms in England has been unveiled, with Chancellor Rishi Sunak promising grants worth as much as £18,000 per firm to help them reopen as England eases lockdown.
The Treasury has announced an additional £1.65 billion is to be allocated to the coronavirus vaccine programme, to be allocated to the continued vaccine rollout; improved testing capability; and to create a "library of COVID-19 vaccines" at the Centre for Process Innovation in Darlington aimed at combatting different mutants of the coronavirus. Over 20 million people have now received their first jab, and nearly 800,000 have had a second shot.
UK-based AstraZeneca Plc has sold its 7.7% stake in Moderna Inc for more than $1 billion, The Times has reported, although their partnership continues on non-covid vaccine treatments. Moderna, whose vaccine is cleared for emergency use against COVID-19 in the United States, said last week it was expecting sales of $18.4 billion from its coronavirus vaccine this year. The report also suggested AstraZeneca could sell its AstraZeneca/Oxford University COVID-19 vaccine on a commercial basis in future if the virus becomes endemic.
The government has completed the final £5bn sale of its assets in Bradford & Bingley and NRAM Limited (formerly Northern Rock), acquired after the 2008 financial crisis. It sold the two firms and their remaining mortgage and loan portfolios to a consortium comprising asset manager Davidson Kempner Capital Management and Citibank.
Rail fares in England and Wales have risen above inflation – by about 2.6% - for the first time in seven years. Increases had been based on the Retail Price Index since January 2014, but this policy has been axed because of the "unprecedented taxpayer support" given to the rail industry during COVID-19, says Sky News. The Railfuture pressure group described the increase as "the usual punishment for rail passengers, just slightly delayed." "It just doesn't make sense to kick the rail industry when it's down," it added.
Sainsbury’s, Lidl, Aldi, Morrisons and Argos frontline workers are set to get a pay rise, and in some cases, bonus payments. Sainsbury’s and Argos (which is owned by Sainsbury’s) will receive pay up to £10.10 an hour plus a 3% annual bonus. Aldi’s wage will rise to £9.55 an hour and Morrisons’ workers would take home at least £10 an hour from April. Lidl will pay a £200 bonus to 23,000 workers.
FTSE 350 oil and gas exploration company Tullow Oil has agreed a new debt facility of around $1.7bn with its banks. The plan is expected to generate "material" cash flow, Tullow said, which will allow it to reduce current debt levels and create "the foundation to address near-term debt maturities". The company saw profit almost halved in 2020 as oil prices fell during the Covid-19 crisis, and has said production will decline in 2021.
More than six million people have become "accidental savers" during the pandemic by keeping jobs while facing fewer outgoings, a report from financial advisory firm LCP has said. Employees who have been able to work from home have seen commuting and travel costs fall. Those aged over 55 were most likely to save as a result of holidays being cancelled or not booked, and because they are more likely to have cut back on eating out.
An FOI by the BBC has revealed that fewer investigations into loan sharks have started during the coronavirus crisis, despite the pandemic leaving more people exposed to illegal money lending. In England, in the seven months from April, only 87 investigations were started, compared with 239 for the whole of the previous year, and 301 in the year before that. In Scotland and Northern Ireland, no new investigations have commenced, and Wales began 8, a figure broadly in line with previous year figures.
The Chartered Institute of Personnel and Development (CIPD) says that since the apprenticeship levy was introduced in 2017, fewer employers have invested in apprenticeship training, and fewer positions have gone to young people. "On all key measures the apprenticeship levy has failed," the CIPD boss said, highlighting a fall in numbers from 494,000 in 2016-17 to 322,500 in 2019-20. The number of apprenticeships going to under-19s also fell from 122,800 to 76,300 in the same timeframe.
Chinese investment in Australia dropped 61% in 2020, the lowest number in six years. The fall follows moves by the Australian government to push for an inquiry into the origins of the coronavirus pandemic, and to make foreign investments of any value subject to review and approval by the Foreign Investment Review Board, a move designed to avoid Australian assets moving into overseas hands at fire sale prices in the downturn. Last year's decline came on top of a 47% drop from 2019, when Chinese investment totalled $1.57bn.
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