Budget 2021: 5% VAT cut mean cheaper coffee, meals out and holidays

Britain is set for a summer spending splurge after Rishi Sunak today extended the discount 5% VAT rate, meaning consumers are set for cheaper coffee, meals out and staycations. 

The super-low rate will carry on until September, the Chancellor announced in his Budget today, then move to 12.5 per cent until April 2022 before returning to 20 per cent regular rate afterwards. 

The move is intended to boost high streets when non-essential shops are allowed open from April 12 at the earliest, in addition to pubs and restaurants for outdoor dining. 

Like many of Mr Sunak’s Covid relief schemes, the VAT cut was due to end on March 31.

The lower rate is likely to lead to lower costs for consumers – as long as shops and hospitality venues do not ramp their prices to make up for lost business. 

If full VAT has already been added to a purchase, the discount will be added at the checkout. 

The cut applies on food and non-alcoholic drinks as well as accommodation and admission to holiday attractions across the UK, such as zoos and cinemas, as well as British hotels and B&Bs. 

VAT does not apply to supermarket groceries, newspapers, books, magazines, as well as other items like children’s clothes. 

The tax is charged on alcohol but this will still be levied at the full 20% rate. 

However, in a boost for drinkers, all alcohol duties have been frozen for the second year in a row.     

Extra spending will be made easier by an increase in the contactless payment limit to £100.  

Mr Sunak said the cap was set to more than double, ahead of shops reopening in April.  

Customers will be able to spend up to £300 without the need for to input their pin number. 

And the value of transactions which can be made in a row without entering your pin will be increased to £300, up from £130 currently.

The Budget document states: ‘The government looks forward to the banking industry implementing the new limits later this year.’

However, experts have warned it will be ‘even easier for a fraudster to spend large sums of the victim’s money’.

The increase comes less than a year after the limit was increased from £30 to £45 to as a way of encouraging shoppers not to use cash during the early months of the Covid-19 pandemic.  

The Treasury believes the hike could help boost retail sectors, including London’s, which is worth more than £31billion.

Ian Johnson, managing director at payment business Marqeta, told the BBC: ‘The problem with increasing limits on physical contactless cards is if they are stolen or cloned, it will now be even easier for a fraudster to spend large sums of the victim’s money in one go.

‘Physical cards provide very little security and a fraudster could continue to use their contactless function until they are cancelled.’ 

Sheldon Mills, executive director at the Financial Conduct Authority said: ‘Increasing the regulatory limits allows industry to raise the contactless limit in the future to meet the evolving expectations of customers and merchants for fast but secure ways to pay. 

‘When making any change, it is important that the industry continues to ensure the right protections are in place to keep payments safe and secure.’

‘We encourage the industry to use these changes to support consumers and merchants during the recovery from the coronavirus pandemic.’

According to the Evening Standard, the change was only made possible by Brexit, as the European Union places a cap on member state’s contactless limit.

Mr Sunak told the paper: ‘As we begin to open the UK economy and people return to the high street, the contactless limit increase will make it easier than ever before for people to pay for their shopping, providing a welcome boost to retail that will protect jobs and drive growth across the capital.’

The increase is not due to set in until later this year, but it will bring Britain in line with the US, Canada and Australia, where limits range from between £100 to £145.

Money stolen through contactless payments is refunded by the banks, but the cost could come back to bite customers through higher fees. 

Some banks are saying they will give customers the option to have a smaller spending cap. 

Anne Boden, CEO and founder of Starling Bank told MailOnline today: ‘With a £100 limit, we would like to give Starling customers the chance to opt out and use a lower limit if they want.’  

The Financial Conduct Authority (FCA) held a public consultation on contactless limits and recommended the change.

Eight out of 10 UK adults used contactless payments in 2019, and the increase in contactless limits will mean millions of payments will now be made simpler, the Government said.

Pete Wickes, general manager for Europe, the Middle East and Africa at payments processing company Worldpay from FIS, said: ‘It is vital that shops and businesses have sufficient time to implement the changes given the current extraordinary operating conditions.

‘Some consumers will also need time to adjust. Our research reveals that around 40% of UK consumers still have lingering doubts about contactless security. Education will be key.’

Nick Fryer, chief technology officer from secure payment provider Dojo, said: ‘The Financial Conduct Authority’s consultation showed that 41% of all card transactions showed were contactless, despite the limit being below that of your average supermarket spend. 

‘This clearly demonstrates how popular contactless cards are already compared to your standard chip and pin. The only issue is protection. 

‘With Mr Sunak raising the contact limit to the not insignificant sum of £100, what steps is he going to put in place to make sure that our cards are protected from fraud?’

In a crucial Budget that will set the country’s course for years, the Chancellor said he knew the revenue-raising measures would be ‘unpopular’. 

But he insisted the alternative of ‘doing nothing’ was not right, pointing out increases will not be implemented until the recovery is well established. 

Mr Sunak hailed the impact of the vaccine rollout saying the government’s watchdog now expects the economy to get back to its pre-pandemic level by mid-2022 – six months earlier than previously thought.

Growth this year will be a bumper 4 per cent after the fast vaccine rollout, and unemployment should now peak at 6.5 per cent instead of 11.9 per cent. That means 1.8million fewer people will lose their jobs, according to Mr Sunak.

However, he warned that the economy will still be 3 per cent smaller than it should have been in five years’ time, pointing to a looming bill for taxpayers.

‘When the next crisis comes we need to be able to act again,’ he insisted, saying a one percentage point increase in interest rates on the UK’s £2.1trillion debt mountain would cost the UK £25billion in servicing costs. 

In a barrage of big spending commitments worth a total of £65billion, Mr Sunak said he is extending the furlough scheme for an extra five months, as well as keeping self-employed and business bailouts.

The £20-a-week boost to Universal Credit will stay for another six months, alongside VAT and business rates breaks for hospitality, leisure and tourism. 

There were efforts to get people shopping, including raising the contactless payment limit from £45 to £100, as well as freezing alcohol duties and dropping the idea of raising fuel duty. 

But Mr Sunak warned that the largesse – on top of the £280billion already shelled out by the Treasury – must come to an end. Including the spend announced at the Budget last year it will total £407billion by the end of next year.

Corporation tax will be increased from 19 per cent to 25 per cent in 2023, although there will be breaks for smaller businesses – potentially bringing in £20billion a year. The basic and higher income tax rates will be frozen from next year, dragging thousands more people into higher rates.

The Budget Red Book shows that while the Budget decisions mean the government spends an extra £58billion in 2021-22, by 2025-6 it is bringing in nearly £30billion more than previously expected – with Treasury officials claiming that ‘goes a long way’ towards balancing the books. 

The OBR estimates that by the end of its forecast period the government’s deficit will be almost eradicated, at £900million.

But national debt will hit an eye-watering £2.747trillion in 2023-4, equivalent to 109.7 per cent of GDP.  

Mr Sunak set out a three-part plan for the recovery and repairing the devastated public finances – as well as turning the UK into a ‘science superpower’.

One major measure to fuel growth is a tax ‘super-deduction’ for companies that invest in the UK – meaning that they will be able to claim relief of 130 per cent of the value of their investment.

The scale of the tax break is so significant that the Red Book shows it is expected to cost nearly £13billion in reduced revenue.  

The stamp duty cut has been kept on until the end of June, and eight new ‘freeports’ will also be created across England to step up economic growth. 

Mr Sunak vowed to keep using the state’s full ‘fiscal firepower’ to protect jobs and livelihoods. 

‘I said I would do whatever it takes. I have done and I will do so,’ he said. ‘We will continue doing whatever it takes to support the British people and businesses through this moment of crisis… 

‘Once we are on the way to recovery we will need to begin fixing the public finances.’

Mr Sunak said there were already 700,00 more people out of work due to the pandemic and the whole world will take a long time to recover.  –

Mr Sunak stressed the Government will not raise the rates of income tax, national insurance, or VAT – which would have broken a manifesto pledge.

But he added: ‘Instead, our first step is to freeze personal tax thresholds.’

The Chancellor went on: ‘We will of course deliver our promise to increase it again next year to £12,570, but we will then keep it at this more generous level until April 2026.

‘The higher rate threshold will similarly be increased next year, to £50,270, and will then also remain at that level for the same period.’ 

Mr Sunak said the rate of corporation tax paid on company profits will increase to 25 per cent in 2023.

He told MPs: ‘Even after this change the UK will still have the lowest corporation tax rate in the G7 – lower than the United States, Canada, Italy, Japan, Germany and France.’

He added: ‘First, this new higher rate won’t take effect until April 2023, well after the point when the OBR expect the economy to have recovered. And even then, because corporation tax is only charged on profits, any struggling businesses will, by definition, be unaffected.

‘Second, I’m protecting small businesses with profits of £50,000 or less, by creating a small profits rate, maintained at the current rate of 19 per cent. This means around 70 per cent of companies – 1.4 million businesses – will be completely unaffected.’ 

Mr Sunak said a taper above £50,000 will also be introduced to ensure only businesses with profits of £250,000 or greater will be taxed at the full 25 per cent rate.

He told MPs: ‘That means only 10 per cent of all companies will pay the full higher rate. So yes, it’s a tax rise on company profits, but only on the larger, most profitable companies – and only in two years’ time.’

Mr Sunak also said: ‘For the next two years, I’m also making the tax treatment of losses significantly more generous by allowing businesses to carry back losses for three years, providing a significant cash flow benefit.

‘This means companies can now claim additional tax refunds of up to £760,000. And because of the current 8 per cent bank surcharge, the implied overall tax rate for banks would be too high. So we will review the surcharge, to make sure the combined rate of tax on the UK banking sector doesn’t increase significantly from its current level – and to make sure this important industry remains internationally competitive.’

Mr Sunak said the OBR forecasts show the response to Covid-19 is ‘working’, adding: ‘The Office for Budget Responsibility is now forecasting, in their words ‘a swifter and more sustained recovery’ than they expected in November.

‘The OBR now expects the economy to return to its pre-Covid level by the middle of next year – six months earlier than they previously thought. That means growth is faster, unemployment lower, wages higher, investment higher, household incomes higher.’

He said the watchdog’s July 2020 forecast suggested unemployment could peak at 11.9 per cent, telling the Commons: ‘Today, because of our interventions, they forecast a much lower peak: 6.5 per cent.

‘That means 1.8 million fewer people are expected to be out of work than previously thought. But every job lost is a tragedy, which is why protecting, creating and supporting jobs remains my highest priority.’

The OBR documents revealed that the UK tax burden is now expected to hit the highest level since Roy Jenkins was Chancellor in the late 1960s.

In its latest set of economic forecasts, watchdog said the tax burden will rise from 34 per cent to 35 per cent of GDP in 2025-26.

More than half of this rise is as a result of the increase in corporation tax to 25 per cent. 

Furlough has already cost £53billion and was due to close at the end of April, with warnings of a wave of layoffs as still-stricken businesses cut loose workers.

The extension today will take the scheme, which costs around £5billion a month, well beyond the official target for ending lockdown on June 21 – raising questions about whether ministers expect to lift all restrictions at that point.

Self-employed workers will also benefit from another round of support paying them 80 per cent of profits. 

In a surprise move, the scheme will be extended to cover 600,000 ‘excluded’ workers who did not qualify before because they did not begin trading until 2019. 

Mr Sunak confirmed the furlough scheme will be extended until the end of September, and employees will continue to receive 80 of their salary for hours not worked.

He told MPs: ‘As businesses reopen, we’ll ask them to contribute alongside the taxpayer to the cost of paying their employees. Nothing will change until July, when we will ask for a small contribution of just 10% and 20% in August and September.’

Mr Sunak said the support for self-employed workers will also continue until September, with the fourth grant providing three months of support at 80 per cent of average trading profits. He noted for the fifth grant, people will continue to receive grants worth three months of average profits – with the system open for claims from late July.

And a business rates holiday for hard-hit sectors will continue beyond the current deadline at the end of this month.

Mr Sunak is also launching a £100million taskforce to tackle furlough fraud, estimated to have cost up to £5billion.

A government report uncovered by MailOnline this week revealed that the government was already losing up to £52billion a year to fraud – more than the defence budget – and the problem might have reached ‘epidemic’ levels during the pandemic.

The contactless payment limit will more than double to £100.

The changes will see the legal single contactless payment limit raised from £45 to £100.

The Government said the change has been made possible by the UK’s exit from the European Union, which means we are no longer bound by EU rules on the maximum limit for contactless payment, which is currently set at £45.

Mr Sunak said: ‘As we begin to open the UK economy and people return to the high street, the contactless limit increase will make it easier than ever before for people to pay for their shopping, providing a welcome boost to retail that will protect jobs and drive growth.’ 

Alongside the financial package the government’s OBR watchdog is providing a vital assessment of the economy’s prospects, with hopes that the swift vaccine rollout might have slashed the black hole that needs to be filled with tax rises and spending cuts below the eye-watering £40billion some experts feared. 

The respected IFS think-tank said there were nearly £60billion of ‘giveaways’ for the coming financial year, compared with nearly £30billion of tax rises by 2026.

Director Paul Johnson pointed out that this was in addition to future spending cuts that related to previous plans laid out in the Autumn Spending Review.

‘How realistic I wonder?’ he wrote. 

Mr Johnson tweeted that the rise in corporation tax was an ‘extraordinary reversal in policy’.

‘Don’t forget the cuts in headline rate came with cuts in allowances too. The new investment subsidy only due to last 2 years. In medium term this is a very big rise in corporation tax,’ he tweeted.

He added that the UK already raises ‘considerably more’ as a percentage of GDP from corporation tax than countries like France and Germany, which have higher headline rates.

A Tory civil war is already raging over the prospect of tax hikes, with senior figures such as Lord Hammond and Lord Hague saying action must be taken to balance the books but others warning it will strangle the recovery.

Mr Sunak addressed the Cabinet this morning on the contents of his Budget, before announcing the measures to MPs at 12.30pm. 

But he has came under fire from Speaker Lindsay Hoyle for pre-briefing and his slick PR drive, including ‘rushing off’ after the Commons statement to take a press conference in No10. 

In a tough message to Cabinet this morning, Mr Sunak said ‘we must be honest with ourselves and the country’. ‘We are borrowing on an extraordinary scale – equivalent only to wartime levels,’ he told ministers, adding that ‘as a Conservative Government, we know that we cannot ignore this problem and it wouldn’t be right or responsible to do so’. 

Mr Johnson echoed the Chancellor’s grim words on the need to balance the books at Cabinet this morning, saying the measures in the Budget were ‘only possible because of the prudence of the Conservative government over a long period of time’ which meant the country had ‘gone into the crisis with strong public finances.

The PM said the Budget plot a course to ‘make the most of our post-Brexit future and as a science superpower’.

 Business leaders generally praised the Chancellor for going ‘above and beyond’ to protect companies still suffering from the coronavirus crisis – although he was warned that thousands of smaller firms are on the brink of collapse.

Tony Danker, director general of the CBI, said the Budget had succeeded in protecting the economy and kickstarting a recovery, leaving open the question of competitiveness in the long term.

He said: ‘The Chancellor has gone above and beyond to protect UK businesses and people’s livelihoods through the crisis and get firms spending.

‘Thousands of firms will be relieved to receive support to finish the job and get through the coming months. The Budget also has a clear eye to the future; to ensure finances are sustainable, while building confidence and investment in a lasting recovery.

‘But moving Corporation Tax to 25% in one leap will cause a sharp intake of breath for many businesses and sends a worrying signal to those planning to invest in the UK.’

Jonathan Geldart, director general of the Institute of Directors, said the Budget delivered a solid platform for many businesses to relaunch as the economy reopens.

‘The extension to the furlough scheme will provide a vital cushion to support jobs as restrictions unwind and firms begin the costly process of rescaling.

‘Restart grants and ongoing business rates relief give a cashflow boost to many firms that will struggle to make full productive use of their properties as restrictions linger.

‘Widening income support for the self-employed is a step forward, but the Chancellor missed a trick by not providing grants for company directors who continue to be left out in the cold.’

Dr Adam Marshall, director general of the British Chambers of Commerce, said there was much to welcome, adding: ‘The Chancellor has listened and acted on our calls for immediate support to help struggling businesses reach the finish line of this gruelling marathon and to begin their recovery.

‘Extensions to furlough, business rates relief and VAT reductions give firms a fighting chance not only to restart, but also to rebuild.

‘This Budget provides reassurance to businesses, provided that they are able to restart and rebuild according to the Government’s road map.’

Federation of Small Businesses chairman Mike Cherry, said: ‘This Budget will help many small firms with their final push through to September, but there is little here to aid job creation or help people return to work.

‘Ensuring the newly self-employed can now access support marks a big step forward – we’re pleased our campaign has been heard – but directors, who appear to have been left out yet again, will be incredibly disappointed.

‘Thousands of small businesses are on the brink of collapse and thousands more are suffering from low confidence as cash reserves dwindle.’

Mr Sunak’s decision to push on until the end of September, three months after all restrictions are due to be lifted, will raise eyebrows. 

Chancellor promises more than £400million in extra cash for struggling culture sector

Rishi Sunak today pledged £410million to the struggling culture and arts sectors in an attempt to help them get back on their feet after lockdown. 

The Chancellor has announced a £300million boost for the Government’s Culture Recovery Fund, taking total funding to £1.87billion.

Meanwhile, an extra £90million has been allocated to support the nation’s National Museums and other culture bodies to keep them afloat as coronavirus curbs are eased in the months ahead. 

Some £20million will be pumped into new culture projects in regional towns and cities as well. 

The Treasury said that the Culture Recovery Fund, currently worth £1.57billion, represented the largest ever one-off investment in UK culture.    

Mr Sunak said: ‘Throughout the crisis we have done everything we can to support our world-renowned arts and cultural industries, and it’s only right that we continue to build on our historic package of support for the sector.

‘This industry is a significant driver of economic activity, employing more than 700,000 people in jobs across the UK, and I am committed to ensuring the arts are equipped to captivate audiences in the months and years to come.’

The Culture Recovery Fund was launched in July last year and so far it has awarded more than £800million in grants to approximately 3,000 organisations. 

Cricket and other summer sports to benefit from £300million cash injection

A new £300million sports recovery package will help teams and venues transition from lockdown to welcoming back crowds in the summer, Rishi Sunak confirmed today.

Cricket, tennis and horse racing will all benefit from the cash as they plan for a return to something close to normal life. 

Boris Johnson has targeted June 21 as the date by which he wants all major coronavirus restrictions to be lifted.  

Mr Sunak said the money, a significant portion of which will go to English cricket, will help make the return of fans to stadiums a reality.  

‘As a huge cricket-fan I know there’s nothing that says summer more than watching your favourite team,’ he said. 

‘I can’t wait for sports grounds to be filled with fans with atmosphere again – this £300m cash boost will help make that a reality.’

The latest funding follows the example of the £300million Sport Winter Survival Package which was announced in November last year.  

Details on how the money will be distributed, how organisations can apply and when the cash could be handed out will be set out by ministers in the coming weeks. 

The England and Wales Cricket Board welcomed the extra money and said it would provide a ‘financial safety net’.  

‘Playing behind closed doors for all of last season has already had a severe financial impact on cricket, and that will continue this year until full crowds are able to return, while the recreational game has also suffered financially,’ a spokesman said. 

‘This support could be a lifeline for parts of the game, and we look forward to seeing the full details of how this funding will be distributed and how organisations can apply.’

New money to help community groups save struggling pubs and sports clubs

Community groups will be able to apply for up to £250,000 from the Government to help them save struggling pubs, Rishi Sunak announced today. 

The Chancellor has set aside a pot of cash worth £150million which will be available to people who want to keep community assets up and running. 

The Community Ownership Fund will also be able to be used to help save sports clubs, theatres and music venues which are in danger of closing. 

The fund, which will open in the summer, will see people bid for up to £250,000 of matched-funding to help them buy local assets to run as community-owned businesses.   

Meanwhile, in exceptional circumstances people may be able to secure up to £1million in matched-funding to establish a community-owned sports club or sports ground.    

Mr Sunak said: ‘Pubs and sports clubs are the heart and soul of our local towns and villages – they’re the glue that keeps us together.

‘This fund will help to ensure vital local institutions aren’t lost to those who treasure them most.’ 

Government to introduce mortgage guarantee for first-time buyers to help them get on the housing ladder  

A mortgage guarantee scheme aimed at helping aspiring homeowners with small deposits onto the property ladder has been unveiled by the Chancellor. 

Rishi Sunak wants to incentivise lenders to provide mortgages to first-time buyers, and current homeowners, with just five per cent deposits to buy properties worth up to £600,000. 

The Government will offer lenders the guarantee they require to provide mortgages covering the remaining 95 per cent. 

The Treasury said low-deposit mortgages have ‘virtually disappeared’ because of the economic impacts of the coronavirus pandemic.

Boris Johnson has said the scheme will help ‘generation rent’ become ‘generation buy’.  

The scheme, which will be subject to the usual affordability checks, will be available to lenders from April.

It is based on the Help to Buy mortgage guarantee scheme introduced in 2013 by David Cameron and George Osborne, that ran until June 2017.

Aiming to reinvigorate the market following the 2008 financial crisis, that scheme – distinct from the Help to Buy equity loan scheme – was said to have helped more than 100,000 households buy a home across the UK.

But there were also concerns that it artificially inflated prices and housebuilders’ profits. 

Hardest hit pubs, restaurants and shops to benefit from £5billion Covid grant scheme

Pubs, restaurants and shops hit hardest by the coronavirus pandemic will be boosted by a £5billion grant scheme to help them reopen as the national lockdown is eased, Rishi Sunak confirmed today. 

The ‘restart grants’ will be worth up to £6,000 per premises and will be designed to help non-essential retailers reopen and trade safely. 

Hospitality, hotels, gyms, as well as personal care and leisure firms, will be eligible for up to £18,000 per premises as they are due to open later under the plans for easing lockdown.

The Treasury estimates 230,000 firms will be eligible for the higher band, which will be awarded based on their rateable value, and 450,000 shops will also be able to apply. 

The £5billion for restart grants is targeted at England, but the devolved nations in Scotland, Wales and Northern Ireland will receive an extra £794 million in funding through the Barnett formula.

Local authorities will be tasked with distributing the grants and will receive the funding in April.

The UKHospitality trade body welcomed the plan, saying many firms are ‘struggling to see how they could survive through’ Boris Johnson’s road map for reopening, with laws on social distancing set to continue until at least June 21 – the earliest date when nightclubs will be considered for reopening.

Vaccine rollout to receive £1.65billion boost to ensure every adult gets jab by end of July

Chancellor Rishi Sunak has pledged an additional £1.65billion to the UK’s vaccination drive to ensure the Government hits its target of a jab for every adult by the end of July.  

The success of the vaccination programme is viewed as one of the main keys to whether the Government will be able to stick to the PM’s reopening dates contained in his roadmap.

Ministers are aiming to have given a first dose of the vaccine to all of the top nine priority groups by the middle of April. 

They are then targeting a date of July 31 to have completed the rollout of first doses to all UK adults.  

Mr Sunak is also diverting £22million to fund a ‘world first’ trial to test if different vaccines can be used together and to see if a third dose is effective. 

Speaking ahead of the Budget, Mr Sunak had said it is ‘essential we maintain this momentum’ on the vaccination drive. 

‘Protecting ourselves against the virus means we will be able to lift restrictions, reopen our economy and focus our attention on creating jobs and stimulating growth,’ he added.

He will also give £33 million to improve the ability to respond to new variants and improve vaccine testing, including £5 million to create a ‘library’ of Covid-19 jabs. 

Rishi Sunak announces new route to UK for high-skilled foreign workers

The UK’s immigration system will be changed in an attempt to make it easier to attract the ‘brightest global talent’. 

Rishi Sunak has announced the creation of a new route for high-skilled workers to come to Britain. 

The Chancellor has also promised to streamline the sponsorship process for firms in order to cut red tape and reduce the paperwork burden on businesses. 

Mr Sunak is hoping the reforms will help to boost the number of researchers, engineers and scientists who come to work in the UK. 

The changes will include a new ‘elite’ points-based route that will help start-ups and fast-growing firms like fintech companies recruit the talent they need to innovate and grow. 

The Treasury said that under the new route ‘highly skilled migrants with a job offer from a recognised high-growth firm will qualify for a visa without the need for sponsorship or third-party endorsement’.

Mr Sunak said: ‘We’ve taken back control of our borders and are backing business with a skills-led approach to migration that works for the whole of the UK.

‘These reforms will ensure we maintain our global status as world-leader in science and innovation – welcoming those with unique expertise.’  

UK to become first sovereign issuer of green savings bond 

The UK is going to launch the world’s first sovereign green savings bond for retail investors, Rishi Sunak confirmed today.  

Ministers hope the move will enable savers to help drive the country’s shift to net zero by 2050. 

The green savings bond will be offered through NS&I, the Treasury-backed savings organisation which offers Premium Bonds and other savings products.

Mr Sunak said: ‘The UK is a global leader on tackling climate change, with a clear target to reach net zero by 2050 and a Ten Point Plan to create green jobs as we transition to a greener future.

‘In a world first, we’re launching a new green savings bond which will give people across the UK the opportunity to contribute to the collective effort to tackle climate change.’

The money raised through the sale of the bonds will be earmarked for renewable energy projects and clean transportation initiatives.