All The Key Announcements From Rishi Sunak's 2021 Autumn Budget
Chancellor Rishi Sunak has delivered his Autumn Budget with major announcements on Universal Credit, Alcohol Duty and Business rates. Here are all the major policies announced in his £150bn spending rise.
More than five million public sector workers including nurses and teachers are due to get a pay rise after Sunak decided to lift his pandemic-based freeze on wage increases. Questions remain over whether the wage increase will surpass, or at least match inflation, which the Bank of England predicts could reach 5%.
Unions have already said it will be a real-terms pay cut if the pay rise doesn't match inflation. Small business minister Paul Scully said he couldn’t guarantee that it would be higher than inflation.
Between 2013 and 2017, pay awards were limited to an average of one percent per year while last year there was a one-year pay freeze except for NHS workers earning below £24,000.
The UK’s lowest-paid workers will also receive a pay rise next year when the National Living Wage increases from £8.91 to £9.50 an hour - a 6.6% rise. It also goes up for those aged 21 to 22 to £9.18 and to £4.81 for an Apprentice Rate.
Working people claiming Universal Credit will be able to keep more of their benefits as a result of changes to the so-called taper rate. Under the current system, for every £1 someone earns through work means a loss of 63p in benefits. But from 1 December, Sunak announced the taper rate would reduce by 8p.
The work allowance, the amount you can earn through work before the taper rate kicks in, currently set at £515 will also rise by a further £500. The Chancellor claimed a single mother of two renting a home and working full-time would be better off next year by about £1,200.
To clear the significant backlog in the NHS in England, the Treasury has pledged to set aside £5.9 billion in providing for non-emergency tests and procedures. From this budget there will be £2.3 billion for at least 100 community diagnostic centres which can run clinical tests like MRIs, ultrasounds, and CT scans. Some of these are set to be in community settings like supermarkets, sports stadiums and in retail parks.
There will also be £1.5 billion on new beds and surgery hubs across the country, which could run up to four operating theatres at any one time, and £2.1 billion to improve IT. There will also be an additional £5 billion for health-related research and development, including money for Genomics England to create ‘Generation Genome,’ a national pilot of sequencing to detect rare diseases in 100,000 newborns.
Wales gets £130 million to help small and medium sized businesses grow as part of the Treasury’s claim it is ‘levelling up’ opportunities across the UK. Scotland is to get £150 million for a new growth fund for business and Northern Ireland gets another £70 million to build on the programmes it already has on the ground. The money will be delivered through the British Business Bank. Another £150 million of funding goes towards setting up regional networks of ‘angel investors’ operating outside of London and the South East, while £1.4 billion goes into the Global Britain Investment Fund that will provide grants to encourage internationally mobile companies to invest in the UK in life sciences and automotive sectors.
Business rates are also set to be overhauled, with rates being revalued every three years from 2023.
Until 2035, any plant equipment and machinery used onsite for renewable energy will be entirely exempt from rates, while businesses making property improvements will be given a 12 month period where rates will remain at their original level.
Sunak also announced a new one year 50% discount for the retail, hospitality and leisure sector up to a maximum of £110,000. He claimed alongside the current Small Business Rates Relief that 90% of these businesses would see a discount of at least 50%.
The Treasury is billing its £6.9 billion "local transport revolution" as part of their levelling up vision and Sunak announced he was putting £5.7 billion into sustainable transport in city regions, and £1.2 billion of new funding into bus services in yet-to-be announced locations. The city settlements include Greater Manchester (£1.07billion), West Yorkshire (£830 million), South Yorkshire (£570 million), West Midlands (£1.05 billion), Tees Valley (£310 million), West of England (£540 million) and Liverpool City Region (£710 million).
An example of the investment in South Yorkshire and the West Midlands will be an expansion of the tram network. Critics were quick to point out that for the city transport improvements, only £1.5 billion is brand new money as £4.2 billion was already announced as part of City Region Sustainable Transport Settlements.
Sunak also announced that Air Passenger Duty will be reduced to a lower level from April 2023 for those travelling between airports in England, Scotland, Wales and Northern Ireland.
At the same time, a new ultra long haul band will be introduced for flights of over 5,500 miles. Sunak said only 5% of passengers will pay more but the fairer system means those flying the furthest would pay the most.
The planned rise in fuel duty is also being cancelled due to the high price of fuel.
Tonnage tax for shipping is also being altered now the UK is out of the EU, saying ships flying the red ensign will benefit
There will be £3 billion for post-16 education which fits in with the Chancellor’s wider Plans for Jobs policy and the Prime Minister's pledge to focus on skills. This new injection of money will quadruple the number of places on skills bootcamps, fund additional classroom hours for up to 100,000 16 to 19-year-olds studying T-levels and create 24,000 traineeships, according to the government.
A total of £830 million will be allocated to revitalising existing colleges in England, and further funding will secure top of the range equipment and facilities to ensure that young people taking T Levels have the industry level skills they need. The National Skills Fund will get £550 million to make sure adults, at any age can learn new skills.
A further £560m will be used to launch a new nationwide numeracy programme called 'Multiply' to help improve basic math skills.
In a clear reversal of some of former Chancellor George Osborne's austerity measures, there will be £500 million for children and families, including £82 million to set up family hubs in 75 new council areas, £100 million to support the mental health of new and expectant parents and £200 million in extra funding for the Support Families programme. The family hub model will be all-in-one facilities that can support parenting, breastfeeding which gets £50 million and provide mental health support.
Labour's shadow child poverty spokesperson Wes Streeting highlighted that the one-stop-shop Sure Start centres set up under Labour suffered significant cut backs under the Conservatives, while there has also been criticism from the childcare sector that money would be better invested in the free 15- and 30-hour childcare entitlements. The new funding implements recommendations set out in former secretary of state Andrea Leadsom MP’s recent Early Years Healthy Development Review, which found that the first 1001 days of a child’s life are critical for their emotional and physical health.
Cutting crime in England and Wales gets a £355 million spend in the Budget, with £50 million of this going towards tackling neighbourhood crimes through the Safer Streets Fund - including improved street lighting and better CCTV. The Crown Prosecution Service gets £80 million, with a focus on improving the response to rape and sexual violence cases. Scotland and Northern Ireland are to get Barnett consequential spending.
The Treasury hopes to give a boost to house building by encouraging construction on derelict and unused land through a £1.8 billion regeneration investment. They hope that there's a transformation of brownfield land the equivalent of 2,000 football pitches in towns and cities across England and hope to deliver infrastructure including transport links, schools and new community spaces, supporting 50,000 jobs.
A further £11.5bn will be used as part of a multi-year housing plan to develop 180,000 new affordable homes, with 65% of the funding being made available for areas outside London.
A UK-wide Veterans’ Health Innovation Fund will get £5 billion to go towards treatments for former members of the armed forces who have suffered injuries or experience mental health challenges and post-traumatic stress disorder (PTSD).
A £703 million security package to protect the UK’s borders will include £74 million to replace the country’s ageing fleet of patrol boats known as ‘cutters’ with 11 fuel efficient vessels. To modernise and digitalise border arrangements, £628 million will be invested to improve waiting times, streamline border entry and visa process and bolster security.
Sunak announced a major overhaul of Alcohol Duty which has come under significant criticism for being outdated and littered with anomalies.
The new "common-sense" system will reduce the number of main duty rates from fifteen to six, with strongest drinks paying the highest rates. The Chancellor said this would lead to some cheap high-strength drinks increasing in price, while fruit ciders, liquers and low alchohol beers would become cheaper.
A new Small Producer Relief will be rolled out to help craft producers, while prosecco and sparkling wines will see their duty cut from the current rate of 28% down to the same rate as a still wine of equivalent strength.
Pubs will also get a boost through a new draught relief policy to lower rates on draught beer and cider, resulting in the price of a pint falling by 3p.
The planned increase in duty on spirits, wine, cider and beer are also being scrapped from midnight tonight.
Unusually, this year’s Budget has its own slick black and white logo which led to speculation that this might be the work of digital communications guru Cass Horowitz, a special adviser to the Chancellor.
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