Today, the Chancellor, Rishi Sunak MP, set out the Government’s Autumn Budget and Spending Review. This sets out the Government’s plans to deliver a stronger economy for the British people. This Budget and Spending Review will strengthen our public finances, ensuring that debt is falling again. It will help working families with the cost of living and support businesses, deliver stronger public services and drive economic growth.
It is positive news that our recovery from the pandemic will be quicker than expected. The OBR now expects the economy to return to pre-pandemic levels by January, with the long-term damage to the economy expected to be 2 per cent rather than 3 per cent. Growth estimates have been revised upwards, while unemployment down, meaning 2 million fewer people are expected to be out of work than previously thought.
As ever, there is a huge amount of information in the Budget, but I have set out below some of the key announcements.
Cost of Living:
- Tax cut for low income families by reducing the Universal Credit Taper Rate from 63% to 55%. We are also increasing the Work Allowance by £500; taken together this is a tax cut for 2 million low-income families – worth an extra £1,000 in families pockets.
- National Living Wage increased by 6.6% to £9.50, giving a £1,000 pay rise to the 2 million lowest paid workers.
- Fuel duty frozen for the 12th year in a row
- Simplified alcohol to make the system fairer – the new system will reduce the number of alcohol bands from fifteen to six, based on taxing alcoholic content. The price of English sparkling wine and prosecco will be cut by as much as 64 pence, and cutting the tax on draught fruit ciders by 20 per cent.
- Increasing pay for public sector workers following a period of more targeted pay.
Supporting Businesses:
- Cutting business rates by 50% next year for 90% of retail, hospitality and leisure, while freezing all rates. Any eligible business – such as pubs, gyms, cinemas, restaurants and hotels – can claim a 50 per cent discount on their bills, up to a maximum of £110,000 per business.
- Creating a new business rates relief to incentivise improvements and green investment.
- Doubling creative industries tax relief for our world leading theatres, orchestras, museums and galleries
Stronger public services:
- Health – resource spending on health services will be increased from £133bn at the start of the Parliament to over £177bn by the end – an increase of over £44bn. This will help deliver new hospitals, new upgrades, 100 new community diagnostic centres, including one at Finchley Memorial Hospital and more.
- Schools – on top of the £14bn announced in 2019, the Government has committed another £4.7bn per year by 2024 to lift real terms per pupil spending. Spending on Special Educational Needs places will be tripled, while another £1.8bn has been announced for schools catch-up, taking total funding to almost £5 billion.
Local Government:
- Councils will receive a new annual grant of £1.6 billion on top of their funding to implement social care reforms, allowing them to keep council tax increases at the lowest levels in years.
Housing:
- A multiyear settlement for housing worth nearly £24 billion – including £11.5bn 180,000 new affordable homes – the largest cash investment in a decade.
- £5 billion to remove unsafe cladding from the highest risk buildings, partly funded by the Residential Property Developers Tax, to be levied on developers with profits over £25 million, at a rate of four percent.
You can see further information on the Budget, including full documents here: Autumn Budget and Spending Review 2021 - GOV.UK (www.gov.uk).