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The Budget at a Glance

By 29/10/2021May 10th, 2022No Comments
The Budget at a Glance

Rishi Sunak unveiled the contents of his Budget in the House of Commons earlier this week.

Setting out the government’s tax and spending plans for the year ahead, Mr Sunak said his plans were focused on the “post-Covid” era, and would pave the way for an “economy of higher wages, higher skills, and rising productivity”.

Here is a summary of the key factors that you might need to know about…

 

State of the economy and public finances

  • Inflation in September was 3.1% and is likely to rise to average 4% over next year, OBR says
  • UK economy forecast to return to pre-Covid levels by 2022
  • Annual growth set to rebound by 6.5% this year, followed by 6% in 2022
  • Unemployment expected to peak at 5.2% next year, lower than 11.9% previously predicted
  • Wages have grown in real terms by 3.4% since February 2020
  • Borrowing as a percentage of GDP is forecast to fall from 7.9% this year to 3.3% next year
  • Borrowing as a percentage of GDP will then fall in the following four years to 1.5%
  • Foreign aid spending projected to return to 0.7% of GDP by 2024-25
  • Economy set to hit pre-Covid level at end of year

Taxation and wages

  • Universal Credit taper rate will be cut by 8% no later than 1 December, bringing it down from 63% to 55% – allowing claimants to keep more of the payment
  • Confirmation business rates to be retained and reformed
  • A 50% business rates discount for the retail, hospitality, and leisure sectors in England in 2022-23, up to a maximum of £110,000
  • Planned rise in fuel duty to be cancelled amid the highest pump prices in eight years
  • Consultation on an online sales tax
  • National Living Wage to increase next year by 6.6%, to £9.50 an hour

Government spending

  • Whitehall departments to receive rise in overall spending, totalling £150bn over the course of this Parliament
  • Funding will rise by an average of £4.6bn for Scottish Government, £2.5bn for Welsh Government, and £1.6bn for Northern Ireland Executive
  • Levelling Up Fund will mean £1.7bn invested in local areas across the UK
  • Government backing projects in Aberdeen, Bury, Burnley, Lewes, Clwyd South, Stoke-on-Trent, Ashton under Lyne, Doncaster, South Leicester, Sunderland and West Leeds
  • Extra £2.2bn for courts, prisons and probation services, including funding to clear the courts backlog
  • Tax relief for museums and galleries will be extended for two years, to March 2024
  • Core science funding to rise to £5.9bn a year by 2024-25
  • £6bn of funding to help tackle NHS backlogs
  • £7bn for transport projects in areas including Greater Manchester, the West Midlands and South Yorkshire

 

It wont be long until we start to see some of these points coming to frution, so make note of anything that could affect you!