These are the 10 key points in Rishi Sunak’s Budget that you need to know about
Rishi Sunak has delivered a post-Covid budget full of spending promises, on the back of a more positive economic forecast than was expected.
Many of the measures announced will have an instant impact on the pockets of millions of people in the UK, while others will come into effect with tangible impacts over the next few years.
Here’s a run down of the most important points from the Budget speech.
An end to austerity, again?
The Chancellor said that the Budget will provide a real-terms increase to every departmental budget, with a total increase of £150bn by the end of this Parliament.
This refers to the budgets set out for day to day spending, which can be spent on things like staffing, rather than capital expenditure, which is to be spent on assets and has generally risen even when day-to-day budgets have been slashed.
Health and social care
The Chancellor confirmed that overall health spending will go up, funded in part by the new social care levy on National Insurance, which will fund among other things “40 new hospitals, 70 hospital upgrades, more operating theatres and 100 community diagnostic centres, 50k more nurses and 50m more primary care appointments”.
A further £5bn investment will also be made available in grant-form for local government, to be put toward social care costs.
Sunak confirmed the budget will provide “multi-year settlement totalling nearly £24bn, including £11.5bn to build “up to 180,000 new affordable homes”.
The Government is also set to go big on brownfield sites, with a pledge to provide £1.8bn to fund the conversion of 1500 hectares worth of sites, or 1 million new homes.
The cladding crisis
The full details are yet to be confirmed, but it sounds like the government is yet to find a solution to the building safety crisis that will help many leaseholders stuck in unsafe building who are facing massive bills.
Sunak said the government will provide £5bn “to remove unsafe cladding from highest risk buildings” - but this isn’t new money and has already been criticised by experts as woefully inadequate considering the scale of the issue.
A 4% levy on developers with profits over £25m will be introduced, though there is little confidence among leaseholders that this policy alone will resolve the crisis.
Education remains a weakness
Despite pleas from the sector and the government’s own former catch up tsar Sir Kevan Collins, Sunak fell far short of what’s been asked of him in terms of funding the education recovery post Covid.
In what came across as the most shifty part of the speech he reiterated the government’s existing offer of £3.1bn and said the Government would “go even further” with “just under £2bn for schools and colleges”, totalling “just under £5bn” - this prompted a very subdued reaction from his own benches.
This is significantly less than that Sir Kevan called for and said was necessary to avoid growing inequality between state and private educated children, which was between £10bn and £15bn
A raft of other spending announcements
Buoyed by an improved economic forecast released today, the Chancellor’s Budget included a significant number of other spending pledges.
These were wide-ranging, with the details on some yet to be fully confirmed.
£2.2bn for courts, prisons and probations, including £500m to reduce the case backlog
£300m for a “start for life offer” for families, “high quality” parenting programmes and funding to create a network of family hubs.
An extra £170m extra funding by 2024/2025 for childcare providers
£560m for youth services, enough to fund 300 youth clubs across the country
£200m for ‘state of the art’ football pitches
Funding for 100 areas to be turned into ‘pocket parks’
£800m for museums and galleries, and £2m for a ‘new Beatles attraction’ on Liverpool waterfront
Universal Credit taper
Following the government’s decision to withdraw the £20 per week Universal Credit uplift, Sunak has consistently rejected calls for retain it, despite pleas from charities and welfare experts.
However, in today’s budget he did announce a measure intended to lessen the blow of the removal of the uplift.
He announced an 8% cut to the taper rate of Universal Credit.
Currently, the more hours someone on Universal Credit works, the more support is withdrawn from them, above a certain threshold.
For every £1 above the threshold they earn, their Universal Credit is reduced by 63p currently.
Sunak says the cut of 8% will come in by no later than December 1, and will be worth £2bn.
The taper rate is still relatively high and the impact of removing the £20 uplift will not be entirely negated by it for many working families on Universal Credit.
Furthermore, the move will feel completely inadequate for many families who are looking for work, or unable to work due to illness, or care commitments.
For them, £20 per week has been removed at a time when prices are rising, and there will be no benefit from the reduced taper rate.
National Living Wage increase and end to public sector pay freeze
As had been widely reported prior to today’s official announcement, the Government will increase the National Living Wage to £9.50 per hour starting next year.
This is different to the minimum wage, which must be paid to anyone over the age of 16 in work apart from apprentices, though the rates for those under 23 will increase in line with the rise.
Sunak also confirmed that public sector workers will see a “fair and affordable pay rise” across the whole spending review period.
Some questions marks remain over the scale of these pay increases, which will be revealed next year, and whether they will actually keep pace with inflation.
Alcohol duty & ‘Draught relief’
The price of your preferred tipple could be about to drop, particularly if you’re a fan of prosecco or fruit cider.
The Chancellor announced a ‘radical simplification’ of the way that taxes on alcohol work, which will see a slight increase in the rate on a handful of drinks but a reduction on many others.
Most red wine looks set to be included in the increased rate, while rose, fruit ciders and lower strength beers and wines will benefit from a reduced rate.
And an end to the duty premium on sparkling wines to bring them in line with still wines of the same strength will mean the cost of a glass of prosecco will likely reduce significantly.
The difference in alcohol prices will be felt in pubs too, thanks to a new ‘draught relief’ cut of 5%, equating to “permanent cut in the price of a pint by 3p”.
Despite plans for an increase, the Chancellor confirmed that fuel duty will remain at the same level, at 57.95p a litre, until next year.
This decision was taken, he said, because fuel prices are “at the highest level in eight years”.