Autumn Budget overview
The Chancellor, Rishi Sunak, has delivered his Budget today - the second of the year with the first in March as usual. As well as the Budget, there were results of a spending review, detailing how government will fund public services over the next three years - making this Budget somewhat unusual.
However, one thing remained the same - the country’s keenness to hear what the Chancellor had to say. Here are the key points from today’s Budget at a glance.
Inflation in September was 3.1% and is likely to rise to 4% next year, however, the UK economy is forecast to return to pre-Covid levels by the end of 2022 - earlier than forecast.
Annual growth is set to rebound by 6.5% this year followed by 6% in 2022.
Borrowing as a percentage of GDP is forecast to fall from 7.9% this year to 3.3% next year, it will then fall in the following four years to 1.5%.
Jobs and welfare
The Chancellor reported wage growth of 3.4% since February 2020 and unemployment peaks have been readjusted to lower rates of just 5.2% - predicted at 11.9% previously.
Mr Sunak also announced cutting the taper rate of universal credit from 63% to 55% - a tax cut he says is worth over £2bn, that will see the average household on the National Living Wage better off by an average of £1,000 per year.
The Chancellor has allocated a further £4.7bn to schools by 2024-25 as well as a new £2bn fund to help schools and colleges recover from the pandemic.
There will also be a £300m spend on a "Start for Life" parenting programme, with an additional £170m by 2024-25 promised for childcare.
Finally, the government has outlined plans for a UK-wide numeracy programme to help improve basic maths skills among adults.
Very timely ahead of the looming COP26 conference. And, the Chancellor recognised airports as major employers and therefore made various pledges to support the travel industry. Therefore, flights between airports in the UK will be subject to a new lower rate of Air Passenger Duty from April 2023, and, financial support for English airports will be extended for a further six months.
But, as the Chancellor said, those travelling the furthest miles should pay more - so he has introduced a new ultra long haul tax band in Air Passenger Duty. It means travellers taking flights of over 5,500 miles will need to pay the levy from April 2023.
As well as air travel the Chancellor announced an investment of £21bn for roads and £46bn on railways. Plus, a guarantee to spend £5.7bn for London-style transport systems across key city regions and, further spending on cycling infrastructure of more than £5bn, with the same funds matched for local minor roads.
Housing and community
Mr Sunak introduced £24bn earmarked for housing. From that fund, £11.5bn will be used to build up to 180,000 affordable homes, with brownfield sites targeted for development. £5bn will be allocated for the removal of unsafe cladding for the highest risk buildings.
Community football pitches, youth clubs, regional theatres and museums are among organisations who will benefit from new money aimed at "levelling up" the UK
20,000 new police officers, an extra £2.2bn for courts and rehab facilities and £3.8bn for prison-building.
Despite calls to reform the outdated tax, the Chancellor has somewhat surprisingly rebuffed claims that he will be reforming a tax that brings in hundreds of millions for the economy any time soon. To do that would be “irresponsible” he says. However, the measures he did announce included a new 50% business rates discount for companies in the retail, hospitality, and leisure sectors, lasting for one year. This was designed to “help those who needed it most” in the post-Covd recovery, a measure Mr Sunak says is “the biggest single-year cut to business rates in 30 years” other than Covid measures.
Pubs, music venues, cinemas, restaurants, hotels, theatres, gyms, any eligible business will be able to claim a discount on their bills of 50%, up to a maximum of £110,000.
The important stuff! Hopefully something to keep the sting of some of the tax rises away as the Chancellor announced the scrapping of planned rises in alcohol duty for every day spirits, wine, beer and cider - although if you enjoy something a little stronger, fortified wines and high strength cider will see a small increase. Plus, there will be a fall in tax paid on lower alcohol drinks and a new lower rate of duty on draught beer will be introduced.