HM Treasury – Page 7 – The NEN – North Edinburgh News

Plan for Jobs: Numbers on furlough halve in three months

More than one million workers came off furlough in the four weeks between the end of April and the end of May, which coincided with the start of restrictions being lifted and non-essential retail, restaurants and pubs reopening.

Latest government statistics show more than one million workers came off furlough in May alone
Milestone moment as the lowest amount of people on furlough since the pandemic began
Comes as scheme begins to wind down ahead of closure in September

More than one million workers came off furlough in the four weeks between the end of April and the end of May alone, which coincided with the start of restrictions being lifted and non-essential retail, restaurants and pubs reopening.

New figures published today show 2.4 million people moved off the scheme between the end of February and the end of May as businesses reopened.

2.4 million people remain furloughed or flexi-furloughed down from a peak of nearly 9 million at the height of the pandemic in May last year.

Chancellor of the Exchequer Rishi Sunak said: “Our Plan for Jobs has supported people’s jobs and livelihoods throughout the pandemic and it’s fantastic to see so many people coming off furlough and into their workplaces with our restaurants, pubs and shops reopened.

“These figures show what we always hoped would happen – that the scheme is naturally winding down as the economy reopens, but continuing to support those businesses and employees that need our help.”

Today’s ONS Business Impact of Covid-19 Survey show numbers may have fallen even further – with estimates that between 1.3 and 1.9 million people are still on furlough.

These figures reinforce other positive signs about how the recovery is progressing. The number of employees on payroll is at its highest level since last April, business and consumer confidence have improved significantly and economic growth is outperforming expectations.

The figures show the largest reduction in the hospitality, retail and accommodation sectors, with nearly 180,000 people in pubs, bars and clubs alone returning to work between April and May.

Furlough was extended until September to allow for businesses to adjust after the end of the Roadmap and to bring people back to work.

Now, as the economy begins to reopen and demand returns, employers are being asked to contribute more and from today, they will contribute 10% towards the cost of paying for unworked hours.

This employer contribution will increase to 20% in August and September, before the scheme closes, with the Plan for Jobs still in place to provide support, including traineeships and more work coaches to help people find jobs.

New statistics for the Self Employment Income Support Scheme, also published today, show more than £25bn has been claimed to date in support for the self employed.

350,000 properties have paid no business rates for 15 months thanks to an unlimited rates relief between March 2020 and July 2021. Over 90% of businesses will now be able to benefit from a 66% reduction in business rates bills until March 2022.

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Extra £14.5 billion for Scotland since start of Covid-19 pandemic

Scotland has benefitted from £14.5 billion of UK government funding to the devolved administrations, figures released today by the Treasury show.

The annual publication of the Block Grant Transparency shows that since the start of the Covid-19 pandemic the Scottish Government has received an additional £14.5 billion, the Welsh Government an additional £8.6 billion and the Northern Ireland Executive an additional £5.0 billion.

This funding has enabled the Scottish Government to provide support to individuals, businesses and public services across Scotland in response to Covid-19 and will continue to support the recovery through 2021-22.

This comes as part of the unprecedented package of support for the whole of the UK throughout the pandemic, with £352 billion spent right across the UK on Covid-19 measures.

In Scotland this included protecting more than 900,000 jobs through the furlough scheme, £294 million in self-employment support, help for businesses and the procurement of vaccines.

Chief Secretary to the Treasury Steve Barclay said: “The UK government is fully committed to strengthening the Union and making sure Scotland has the funding needed to get through this pandemic, with £14.5 billion of additional spending over the last year.

“We’ve protected more than a million Scottish jobs and businesses with furlough and support schemes, our vaccine rollout is unlocking the economy, and our Plan for Jobs is levelling up opportunity and helping us build back better across the UK.”

Scottish Secretary Alister Jack said: “From the very start of the pandemic, the UK Government has taken unprecedented action to help people and businesses right across the country.

“That includes our furlough scheme, support for self-employed people, help for businesses, and the hugely successful UK-wide vaccine programmes.

“On top of this direct support, the UK Government has provided an additional £14.5 billion of funding for the Scottish Government.

“This extensive support, which now enables us to look towards recovery, shows how Scotland benefits from being part of a strong United Kingdom. Never has the value of the Union been more important or more apparent.”

The UK government’s Plan for Jobs is helping to support, create and protect jobs across the UK.

The Kickstart scheme is already helping thousands of 16-24 year-olds into work, JETS Scotland is providing up to six months of targeted support and 13,500 new Work Coaches have been recruited to give tailored support to people out of work.

UK facing ‘pensions tsunami’

Treasury’s ‘£17bn mistake’ that will take “generations to resolve”

In its report published today the Public Accounts Committee says HM Treasury has “done little to identify and manage the stark differences in average pensions between genders and other groups” and “should have foreseen the age discrimination issue that gave rise to the 2018 McCloud judgment”.

In 2011 and 2015 the Treasury introduced reforms aimed at making public service pensions more sustainable and affordable, but a 2018 Court of Appeal judgement (the McCloud judgement) ruled parts of the reforms unlawful.

The Treasury now wants pension scheme members to pay the estimated £17 billion cost to put that right, despite the unlawful reform having been “its own mistake – a mistake which could have been avoided by listening to advice and which will take many decades to resolve.”

Around 25% of pensioners and 16% of the working-age population are members of one of the four largest public service pension schemes covering the armed forces, civil service, NHS and teachers. The schemes are almost all unfunded, meaning retirees’ pension benefits are paid out of current workforce contributions.

The Committee saw “evidence of public service pensions issues affecting delivery of frontline services, and independent schools opting out of pension schemes because of increasing costs”.

It says HM Treasury doesn’t have the data it needs nor evaluated the impact of its reforms, or whether they are achieving its pension policy objectives – the PAC is “not convinced it is on track”.

The Treasury also seems “unconcerned about the drop in enrolment by some workers”. The Committee warns on the “a danger of a perfect storm where some young people believe they cannot afford pension contributions because of high costs of living and retire with a reduced public sector pension as a result.

Many younger workers will continue to pay rent in retirement because they cannot afford to buy a home and the cost of supporting this generation will fall on future taxpayers”.

Meg Hillier MP, Chair of the Public Accounts Committee, said: “The Treasury’s £17 billion mistake on pensions reform is a ripple compared to the tsunami of costs to the public purse if Government fails to address the growing number of young people unable to afford to plan for a proper pension.

“It’s lack of curiosity about why nearly a quarter of a million workers are not joining these pension schemes is a concern. Pension planning must be long term; mistakes and poor planning have an impact for decades. Short term cost savings can become long term costs to individuals with lower retirement incomes and the taxpayer who may end up supporting them.”

Government consults on plan to protect future of cash

People will be able to get cashback from shops without needing to buy anything under new proposals to protect the UK’s cash system announced today (15 October 2020).

government sets out plans to protect the UK’s future cash system and ensure people have easy access to cash
proposals would see cashback offered at shops without consumers having to make a purchase
the Financial Conduct Authority would also be given overall responsibility for the UK’s retail cash system to protect consumers and SMEs

Under the government proposals, cashback without a purchase could be widely available from retailers of all sizes in local communities across the UK.

Although cash use is declining, with people increasingly choose cards, mobile and e-wallets to make payments, it remains crucial for groups across the UK – including the elderly and vulnerable. Many find that cash is more accessible than digital payments methods or that it helps them to budget and manage their finances.

These proposals, which also include making the Financial Conduct Authority (FCA) responsible for ensuring the cash system benefits consumers and SMEs, are the latest step in the Government’s effort to support the millions of people and business who rely on cash day to day.

John Glen, Economic Secretary to the Treasury, said: “We know that cash is still really important for consumers and businesses – that’s why we promised to legislate to protect access for everyone who needs it.

“We want to harness the same creative thinking that has driven innovation in digital payments to maintain the UK’s cash system and make sure people can easily access cash in their local area.”

To ensure no one is left behind by the transition to digital payments, the government announced at the March 2020 Budget that it would legislate to protect access to cash and ensure that the UK’s cash infrastructure is sustainable in the long-term.

Today it is seeking views on its approach to this legislation from consumer organisations, businesses, financial institutions, providers of ATM and payment services and others through a call for evidence.

One proposal under consideration is cashback without a purchase, which could help to keep cash widely available by reducing cash infrastructure costs.

When local shops accept and dispense cash, it is recycled through local communities and there is less need to transport and distribute notes and coins via cash centres, which reduces the associated costs.

Last year, consumers received £3.8 billion of cashback when paying for items at a till – making it the second most used method for withdrawing cash in the UK behind ATMs.

Current EU law makes it difficult for businesses to offer cashback when people are not paying for goods and this has been a barrier to widespread adoption. The Government is now considering scrapping these rules once the transition period ends on 31 December 2020.

The government is also considering giving the FCA overall responsibility for maintaining a well-functioning retail cash system given its existing regulatory role and consumer protection objective.

At present, The Bank of England, Financial Conduct Authority, Payment Systems Regulator, and HM Treasury each have specific roles and responsibilities for oversight of the cash system. Close coordination between these authorities has been highly effective, particularly in managing risks to cash through Covid-19, but there may be significant benefits to giving a single authority overall responsibility for setting requirements to meet the cash needs of consumers and SMEs.

The call for evidence opens today (15 October 2020) and will run for six weeks. It will seek views on how to ensure industry continues to offer ways to withdraw and deposit cash, how to improve cashback, what affects cash acceptance, and where regulatory responsibility should sit.

More detail on the government’s proposals is available in the Access to Cash Call for Evidence document.

The Call for evidence will close on 25 November 2020.

Chancellor allocates extra £2.1 billion to ‘turbo-charge No-Deal Brexit preparations’

Chancellor doubles Brexit funding for this year, announcing £2.1 billion to prepare for no deal.
New immediate cash boost of £1.1 billion to prepare critical areas for EU exit on 31 October.
A further £1 billion available to enhance operational preparedness this year if needed.
Funding will accelerate preparations at the border, support business readiness and ensure the supply of critical medicines.

An immediate cash boost to help get the UK ready for Brexit on 31 October has been announced by the Chancellor of the Exchequer, Sajid Javid. Continue reading Chancellor allocates extra £2.1 billion to ‘turbo-charge No-Deal Brexit preparations’

New £50 note is’cash fit for the future’

Treasury confirms £50 note will continue to be part of the UK currency
Bank of England announces it will make a new modern polymer note
more secure note will help clamp down on crime

Modern money will help prevent crime, the Exchequer Secretary has declared as plans were unveiled for a new, more secure £50 note. Continue reading New £50 note is’cash fit for the future’

Billion-pound backing for “catapult centres”!

£780m of extra funding for high-tech hubs
This builds on £180m announced last month for North East
£96m of extra funding for high-tech hub in Scotland
Backing for British expertise at 40-year high
Latest GDP figures confirm economy continues to grow

Britain’s world-leading researchers and entrepreneurs will benefit from an additional £780 million to create the technologies of tomorrow, the Chancellor announced yesterday. Continue reading Billion-pound backing for “catapult centres”!

Tell George Osborne what he can do with his Budget!

Did you have your say on the city council’s budget proposals? Have you got the taste for balancing the books? Well, you now have the opportunity to give Chancellor George Osborne some timely Budget advice. Read on …

What would you like to see in Budget 2015?

The government is seeking your views on what you would like to see in Budget 2015, which will take place on Wednesday 18 March.

The government encourages open and transparent policy-making, and welcomes original and innovative ideas. Your views will be considered by HM Treasury as part of the policy-making process.

Please submit your representation by filling in our short survey.

If you would prefer to submit your representation as a file attachment, please email budget.representations@hmtreasury.gsi.gov.uk

For information on the correct procedure for submitting your representation, please view the guidance.

To allow for full consideration in advance of the Budget, any submission should be sent to HM Treasury by Friday 13 February

Follow HM Treasury on Twitter for all of our latest news and Budget coverage.

New basic fee-free bank accounts will help millions manage their money

Government secures deal with the big banks on basic bank accounts – ending fees for failed payments

For the first time, basic bank accounts will be truly fee-free, helping people to manage their money without fear of running up an overdraft. Accounts will be available to anyone who doesn’t already have a bank account or who can’t use their existing account due to financial difficulty.

The Economic Secretary to the Treasury Andrea Leadsom recently hailed a major agreement between the government and the banking industry to establish new basic bank accounts that will end bank charges if a direct debit or standing order fails.

New basic bank accounts will help people who do not have a bank account or who are frozen out of existing accounts because of previous money problems.

Following extensive negotiations with the banking industry to bring basic bank accounts up to scratch, nine high street banks and building societies covering over 90% of the UK current account market have agreed to offer a better deal to customers.

Those banks are:

Barclays
the Co-operative Bank
HSBC
Lloyds Banking Group (including Halifax and Bank of Scotland brands)
National Australia Group (including Clydesdale and Yorkshire brands)
Nationwide
RBS Group (including NatWest and Ulster Bank brands)
Santander
TSB

The changes will minimise the risk that basic bank account customers will be forced into overdraft by fees or charges.

In some cases, charges had been as high as £35 per failed item, and uncapped, meaning charges could accumulate to hundreds of pounds over time and drive people into serious debt.

Basic bank account customers will now also be offered services on the same terms as other personal current accounts that the banks provides, including access to all the standard over-the-counter services at bank branches and at the Post Office, access to the entire ATM network.

There are an estimated 9m users of basic bank accounts in the UK.

This deal comes on top of the estimated £300 million cost to the banking industry of providing basic bank accounts today. It is vital that banks offer products which are suitable for day-to-day transactions for all consumers.

The Economic Secretary Andrea Leadsom recently met Toynbee Hall’s specialist financial advisers and people who may have found it difficult to access mainstream banking services in the past, to discuss how the new basic bank accounts will make a difference.

She said: “I welcome the banks’ agreement to remove these charges from their basic bank accounts. This means that people who don’t have an account, or who would struggle to get a standard account due to money problems, will be able to manage their money with certainty and clarity.

“It will end people being effectively locked out of their basic bank accounts due to high fees and charges when their payments failed.

“Ending this unfair situation is a real step forward for the banking industry’s most vulnerable customers and improving access to banking is a key part of our long-term economic plan.”

BBA Chief Executive, Anthony Browne said: “Banks in the UK lead the way when it comes to providing accessible banking and take their responsibility seriously – the proportion of the population with no account at all is less than a third of that in the US and Europe.

“Now we will be helping even more people access banking services than ever before, as these accounts are designed for people who don’t have a bank account today and are vulnerable.

“These basic accounts will make it easier for more people to manage their money. They will have many features that will help people to budget, pay bills and save up. We are delighted to be offering this service to those who will really benefit.”

Gillian Guy, Chief Executive of Citizens Advice, said: “A good bank account is an essential ingredient to managing your money. Any barriers to essential banking services can make it even harder for people keep on top of their finances. Up until now, some basic bank account customers didn’t get a debit card, were afraid of being hit with fees for unpaid direct debits and some were shut out of banking altogether.

“Citizens Advice has been at the forefront of the campaign for decent basic bank accounts, and is pleased that the Government and banks have listened to the problems experienced by our clients. We look forward to continuing to work with the Treasury as well as with banks to make sure these new standards meet the needs of customers.”

Graham Fisher, Chief Executive of Toynbee Hall, said: “The announcement to create genuinely accessible and inclusive fee-free bank accounts for the most vulnerable people is a significant step forward in creating a truly financially inclusive society.

“At Toynbee Hall we have helped a significant number of clients to set-up new bank accounts, which can at times be a difficult and frustrating process, but with these changes we will be able to help more people access this incredibly valuable financial product.”

The terms of the agreement are published today so that every customer knows what they can expect from their bank in future and the new accounts will be in place by the end of 2015.

The terms of the agreement make clear that the accounts should be made available where people are ineligible for a bank’s standard current account, and either:

have no bank account
have a bank account elsewhere, but want to change provider
have a bank account, but are in financial difficulty and want their bank to open a new, functional account for them.

Note: Not all banks will apply these criteria in full – some may choose not to set any eligibility requirements and offer customers a choice from their full range of personal current accounts.

Pensions: millions to benefit from impartial advice

Millions of people will benefit from a right to free and impartial guidance on how to make the most of the new pensions choices that come into effect in April 2015, Chancellor of the Exchequer George Osborne announced today. This follows the Westminster government’s consultation on how best to deliver the radical changes to how people access their pensions announced at the Budget.

In total 18 million people will be able to benefit from the changes to pensions should they wish to do so.

From April 2015 300,000 individuals a year with defined contribution pension savings will be able to access them as they wish when they turn 55 – subject to their marginal rate of tax.

This is the biggest change to how people access their pensions in almost a century, removing the effective requirement for many to purchase an annuity.

The consultation since the Budget has shown that these changes have been overwhelmingly well received, with individuals supporting greater freedom and choice, and the pensions and insurance industry ready for the challenge of creating new, flexible products, which better suit individuals’ needs.

The government’s response to the consultation today confirmed that:

the guaranteed guidance on pensions choices will be provided by independent organisations rather than pensions schemes or providers
even more people will be able to benefit from the new pensions flexibilities as the government will continue to allow individuals to transfer from private sector defined benefit schemes to defined contribution pension schemes – subject to two important new safeguards
a new override will be introduced so that pensions schemes are able to offer individuals flexible access to their savings and the pensions tax rules will be amended to allow providers to develop new retirement income products that are tailored to the needs of individual consumers

Chancellor of the Exchequer, George Osborne, said: “It’s right to support hard working people that have taken the long-term decision to save for their future and I’m pleased that the responses we had to our proposals on making pensions more flexible have been overwhelmingly positive.

“We’re making sure that people have the right support to make their own choice about how best to finance their retirement and I’m pleased to confirm that everyone with defined contribution pension savings reaching pension age will get free and impartial guidance on their range of available choices at retirement.”

The government wants to ensure that guidance is trusted by consumers, and the vast majority, including most of the financial services industry who responded, said that consumers would not trust guidance given by a person or organisation with a vested interest in selling a financial product or service. It will bring together a range of delivery partners, including the Pensions Advisory Service (TPAS) and the Money Advice Service (MAS), which already provide guidance and support to consumers.

People with private sector defined benefit savings will continue to be able to transfer to defined contribution schemes (excluding pensions that are already in payment), alongside two new safeguards to protect both pension schemes and the individuals transferring out.

Guidance will be offered through a broad range of channels, including web-based, phone-based as well as face-to-face, and to remain free to the consumer will be funded by a levy on regulated financial services firms.

The Financial Conduct Authority (FCA) have also today published a paper which consults on the elements of the guidance guarantee for which the FCA will be responsible: setting and monitoring the standards with which guidance providers will have to comply, making and enforcing rules on how contract-based schemes signpost to the guidance services, and adjusting the FCA’s existing conduct rules to support the introduction of the guidance guarantee and in response to the new flexibilities.

Two new safeguards are being introduced to protect both individuals and pension schemes in relation to defined benefit to defined contribution transfers: a new requirement for an individual to take advice from an impartial financial adviser regulated by the FCA before a transfer can be accepted; and, new guidance for trustees on the use of their existing powers to delay transfer payments and take account of scheme funding levels when deciding on transfer values.

HM Treasury also published the following guide today:

Pension Reforms: Eight things you should know

Understanding the pension system can be complex sometimes. We’ve explained how the new system will work and what it means for you.

1. We’re completely overhauling the system so you can take your pension how you like

In order to create greater choice and flexibility for people who have saved hard for their pension, we announced at Budget 2014 a series of changes to how people access their pension.

From April 2015, no matter how much you decide to take out from your pension after retirement, you will be charged the normal rate of income tax you pay on your salary (so either 0%, 20%, 40% or 45%) rather than the previous tax charge of 55% for full withdrawal.

2. 25% of your pension pot will remain completely tax-free, as it was before

You’ll be able to access 25% of your pot in one go without paying any tax.

3. We previously announced this would apply just to people with ‘defined contribution’ pensions

This is a type of pension also known as a ‘money purchase’ scheme.

This is when the money you and your employer pay in is invested by a pension provider chosen by your employers. The amount you get when you retire usually depends on how much has been paid in and how well the investment has done.

4. We’ve now announced that people who have a ‘defined benefit’ scheme will benefit too

A ‘defined benefit’ pension is typically a promise of a certain level of pension in retirement which is linked to your salary.

We’ve now announced that people in the private sector or in a funded public sector scheme will still be able to transfer from a defined benefit pension scheme to a defined contribution one if they want to, meaning they can benefit from the changes.

This means that around 18 million people will ultimately be able to withdraw their pension flexibly should they wish to do so.

5. Everyone who will be able to take advantage of the new reforms will be able to access free and impartial guidance

This will help people make confident and informed choices on how they put their pension savings to best use.

This guidance will be available through a number of different channels – via an online tool, over the phone, or face to face. Individuals will be able to choose the channel, or mix of channels, that they find most convenient.

It will be entirely impartial, so won’t be given by anyone who could be trying to sell you a product.

6. Your pension provider or scheme will be required to tell you about the guidance and how to access it

Accessing the guidance will be arranged by your pension provider, who will be required to tell you about it.

7. The changes will come into effect from April 2015

If you are over the age of 55, or will be from April 2015, you will be able to take advantage of the new system from then.

If you’re younger than 55 then you will be able to take advantage of the new system when you do reach 55.

8. You don’t need to do anything until then

If you’re thinking about retiring soon, you don’t need to do anything in the meantime, but we’ve also made other changes to help you save until then, such as our reforms to ISAs.

You can find more information about the pension reforms by reading our factsheet we published at Budget explaining the differences between the new changes and the old system, or more details on our response to the consultation.