The Autumn Budget 2021 at a glance

With the UK’s long-term economic recovery in mind, Mr Sunak in Autumn Budget Speech suggested initiatives such as universal credit, a higher minimum wage, reforming the alcohol tax system, and sustained assistance for the retail and hospitality industries.

As the nation recovers from the coronavirus outbreak, the chancellor vowed a “stronger economy”. Despite severe warnings on living costs, Mr Sunak remained upbeat about the UK’s economic prospects, hailing a speedier recovery than projected.

State of the economy and public finances

• Inflation in September was 3.1% and is anticipated to grow to average 4 per cent over next year, OBR says. UK GDP predicted to recover to pre-Covid levels by 2022
• Annual growth is anticipated to rise by 6.5% this year, followed by 6% in 2022
• Unemployment is likely to peak at 5.2% next year, lower than 11.9% initially forecast
• Wages have climbed in real terms by 3.4% since February 2020
• Borrowing as a proportion of GDP is anticipated to shrink from 7.9% this year to 3.3% next year
• Borrowing as a proportion of GDP will then reduce in the next four years to 1.5%
• Foreign assistance funding predicted to recover to 0.7% of GDP by 2024-25

Taxation and wages

• Universal Credit’s taper rate will be reduced by 8% no later than 1 December, from 63 to 55%, enabling claimants to retain a greater portion of their payment.
• Confirmation of the retention and reform of business rates
• In 2022-23, England’s retail, hotel, and leisure sectors will get a 50% business rates reduction, up to a maximum of £110,000.
• The government is cancelling a planned increase in fuel tax in the face of the highest pump prices in eight years.
• Consultation about the establishment of an online sales tax
• The National Living Wage will rise by 6.6% next year, to £9.50 an hour.

Government spending

• Whitehall departments will see a rise in total expenditure of £150 billion over the course of this Parliament.
• Scotland’s funding will rise by an average of £4.6 billion, Wales’s by £2.5 billion, and Northern Ireland’s by £1.6 billion. The Executive Levelling Up Fund will spend £1.7 billion in local communities throughout the United Kingdom.
• Government funding is being provided for projects in Aberdeen, Bury, Burnley, Lewes, Clwyd South, Stoke-on-Trent, Ashton under Lyne, Doncaster, South Leicester, Sunderland, and West Leeds.
• £2.2 billion more funding for courts, prisons, and probation services, including funding to eliminate court backlogs
• Museum and gallery tax exemptions will be extended for two years until March 2024.
• By 2024-25, core scientific funding will rise to £5.9 billion per year.
• £6 billion in funding to assist in resolving NHS backlogs
• £7 billion for infrastructure projects in Greater Manchester, the West Midlands, and South Yorkshire

Children and education

• By 2024-25, schools will get an additional £4.7 billion.
• Nearly £2 billion in additional funding would be made available to assist schools and colleges in recovering from the pandemic.
• Schools funding will be restored to 2010 levels in real terms — a more than £1,500 boost in cash per student.
• £300 million will be spent on “Start for Life” parenting programmes, with an extra £170 million in childcare funding expected by 2024-25.
• A national numeracy curriculum will be established to assist individuals in improving their fundamental arithmetic abilities.

Housing

• £24bn allocated for housing, including £11.5bn for up to 180,000 affordable houses, with brownfield sites targeted for expansion
• 4% charge will be levied on home developers with income above £25m to assist build a £5bn fund to remove dangerous cladding
• £640m a year to combat rough sleeping and homelessness

Air travel

• Flights between airports in the UK countries will be subject to a new reduced rate of Air Passenger Duty from April 2023
• Financial assistance for English airports will be extended for an additional six months.
• From April 2023, a new extremely long-range band in Air Passenger Duty for journeys of over 5,500 kilometres will be introduced.

Alcohol

• Cancellation of planned duty rise on spirits, wine, cider and beer
• The number of alcohol duty rates will be reduced from 15 to six.
• Rates for stronger red wines, fortified wines, and hard ciders will rise somewhat.
• Rose wine, fruit ciders, liqueurs, lesser strength beers, and wines will all see decreased rates.
• Sparkling wines pay the same duty as identical still wines
• Duty reductions on draught beer and cider sold in containers larger than 40 litres result in a 5% reduction in the rate.