It has been announced the following will be either put in place or are in place at the moment.
- The chancellor says inflationary pressures are affecting the UK economy, with the Office for Budget Responsibility (OBR) forecasting that inflation will average 4% next year.
- The chancellor says forecasts from the Office for Budget Responsibility (OBR) show the economy will grow by 6.5% this year.
- Sunak says it will take until the start of 2022 for the economy to return to its pre-pandemic size.
- GDP will grow by 6% next year, 2.1% in 2023, 1.3% in 2024, 1.6% in 2025.
- In March, the OBR had forecast growth of 4% this year, after a plunge of 9.9% in 2020 – the worst recession for 300 years.
- The OBR’s estimate for long-term scarring for the economy has been revised down from 3% to 2%.
- Unemployment is forecast to peak at 5.2%, down from a forecast for about 12% forecast last year.
- Sunak says he is setting new “fiscal rules” for management of the public finances. Debt must fall as a percentage of GDP. In “normal times” the state should only borrow to invest in future growth, balancing everyday spending. This must happen by the third year of each forecast period.
- Sunak says borrowing in the current financial year 2021-22 will be 7.9% of GDP, and will fall to 3.3% next year.
- Debt levels will fall as a share of national income.
- In March, the OBR estimated a budget deficit – the gap between spending and tax income – of £233.9bn for 2021-22, or about 10.3% of GDP.
- Sunak says there will be a real-terms rise for every government department.
- Departmental spending in this parliament will rise by £150bn, in the “largest increase this century”. Spending will grow in real terms by 3.8% a year.
- The Institute for Fiscal Studies estimates average real-terms annual growth in departmental resource budgets was higher in previous years, above 4% in 2000 and 2002 under Labour, and 4.1% under the Conservatives in 2019.
- There will be grant funding for local government £4.8bn, in the “largest increase in core funding for over a decade”.
- Overseas aid will return to 0.7% of GDP by the end of the parliament, after a cut to 0.5% announced last year.
- Sunak says funding for each pupil will be returned to 2010 levels, in an increase worth £1,500 a pupil.
- The government is tripling investment to create 30,000 special school places, he confirms.
- Total support for catch-up funding because of the Covid pandemic will be almost £5bn.
- Sunak announces £1.7bn of funding in the first grants from the Treasury’s Levelling Up Fund, for towns and cities including Stoke-on-Trent, Leeds, Doncaster and Leicester.
- The funding includes allocations to constituencies held by the Labour leadership, he indicates: “We’re so committed to levelling up we’re even levelling up the opposition front bench.”
- Libraries will be “renovated, restored and revived”.
- Tax relief on museums and galleries was due to be announced in March next year; it will be extended until March 2024.
Infrastructure and investment
- The chancellor says he will increase investment to support London-style transport across the regions of England.
- The government will invest £21bn on roads and £46bn on railways to improve journey times between cities.
- Sunak announces the government’s target for hitting research and development spending will reach £22bn by 2026-27, two years later than had been initially planned.
- The government will invest £20bn in R&D by 2024-25. Sunak says this stands as a “record investment to secure the UK’s future as a global science superpower”.
- Sunak announces he will limit tax relief for business R&D spending so that it only applies to domestic activities.
Employment and skills
- The chancellor says the government will raise government spending on skills and training by £3.8bn over the parliament, an increase of 42%.
- He confirms the government will launch a UK-wide numeracy service called Multiply.
- He says the programme will help 500,000 adults improve their numeracy.
- Internal domestic flights will have air passenger duty cut. He says 9 million passengers will have their duty cut by half, “bringing people together across the UK”.
- The chancellor confirms that the bank surcharge will be cut from 8% to 3%.
- Sunak says changes to business rates will be reformed to support companies, including a new 12-month relief for companies to invest in their premises.
- The chancellor says the investment incentives are worth £750m.
- Next year’s planned increase in the business rates multiplier will be cancelled. That is worth £4.6bn over the next five years, he says.
- Sunak announces a 50% business rates discount for companies in retail, hospitality and leisure sectors, up to a maximum of £110,000. It is a cut worth £1.7bn.
- The chancellor says: “This is the biggest single year tax cut to business rates in over 30 years.”
Pubs and alcohol duty
- Sunak announces radical changes for alcohol duty, in what he calls the biggest changes for 140 years.
- The UK’s main duty rates on alcohol will be cut from 15 to six in a simplified system.
- Higher strength alcoholic drinks will attract higher duties, including stronger red wines, fortified wines and high-strength ciders. Lower strength drinks – such as rose, fruit ciders and liqueurs – will attract a lower tax rate than currently.
- Pubs and bars will benefit from a new “draft relief” cutting duty on beer and cider sold in pubs by the most since 1923.
- The cost of a pint will be permanently cut by 3p.
- There will be a small brewers’ relief, including for cider makers.
- The chancellor says the reforms are taking advantage of leaving the EU to simplify the system.
- The chancellor says alcohol duties are “full of historical anomalies” as it dates back to 1643.
Cost of living
- The chancellor says an increase in fuel duty will be cancelled, saving motorists £8bn over five years.
- After 12 years of freezing fuel duty it will save the average motorist £1,900.
- The chancellor confirms the national living wage will increase from £8.91 to £9.50 an hour from April.
Taxation and universal credit
- Sunak announces that he will cut the taper rate in universal credit from 63p to 55p. This will be worth more than £2bn.
- The work allowance will be increased by £500.
- The chancellor says this will be implemented no later than 1 December.
- It comes after the government cut universal credit by £20 a week from early October after a temporary uplift during the coronavirus pandemic, in a cut worth more than £5bn.
Credit The Guardian