Chancellor Rishi Sunak's Budget 2021 speech

Advantage 365

27 October 2021

The chancellor says there are "challenging" months ahead, adding that inflation in September was 3.1% and is likely to rise further - the OBR expect it to average 4% over the next year

Pressures caused by supply chains and energy crisis will "take months to ease".

Economy to return to its pre-COVID level at the turn of the year - an improvement on OBR forecasts revealed in March
Economy expected to grow by 6% in 2022, and 2.1%, 1.3% and 1.6% over the next three years

In July last year, at the height of the pandemic, unemployment was expected to peak at 12% but the OBR now expect it to peak at 5.2%

Compared to 2020, wages have grown by 3.4%

Underlying debt is forecast to be 85.2% of GDP this year

It will reach 85.4% in 2022-23, before peaking at 85.7% in 2023-24

It then falls in the final three years of the forecast from 85.1% to 83.3%

Total departmental spending over this parliament will increase by £150bn, growing by 3.8% a year in real terms

Spending on healthcare to increase by £44bn to over £177bn by the end of this parliament

Extra revenue from health and social care levy will go towards NHS and social care as promised

Health budget will be the largest since 2010, with record investment in research and development, better screening, 40 new hospitals and 70 hospital upgrades

Mr Sunak says the budget funds an ambition to recruit 20,000 new police officers

Extra £2.2bn for courts, prisons and probation services, including £500m to reduce the backlog in courts

Programmes to tackle neighbourhood crime, reoffending, county lines crimes, violence against women and girls, victims' services, and improved response to rape allegations

£3.8bn for the "largest prison-building programme in a generation"

£11.5bn to build up to 180,000 affordable home - 20% more than the previous programme

£1.8bn to bring 1,500 hectares of brownfield land into use

£640m a year to help those who are rough sleepers and homeless

£5bn to remove unsafe cladding from the highest risk buildings, partly funded by a residential property developers' tax, which will be levied on developers with profits over £25m at the rate of 4%

£21bn for roads as part of a larger investment in transport

£2.6bn for upgrades of over 50 local roads

More than £5bn for road maintenance - enough to fill one million more potholes a year

More than £5bn for buses, cycling and walking improvements

HGV levy (previously suspended until August) will now be suspended until 2023

Vehicle excise duty for heavy goods vehicles to be frozen

Funding to improve lorry park facilities

£46bn investment in railways, with an integrated rail plan to be published soon

£5.7bn for London-style transport settlements in Greater Manchester, Liverpool City Region, Tees Valley, South Yorkshire, West Yorkshire, West Midlands, West of England

£300m for parenting programmes for families, tailored services to help with perinatal mental health

£150m to support training and development for early years workforce

£200m for Supporting Families programme which helps families with varied needs

Over £200m to continue the holiday activity and food programme

£560m for youth services - enough to fund up to 300 youth clubs in England

More than £200m to build or transform up to 8,000 community football pitches in the UK

£2bn new funding to help schools and colleges, bringing total support (some already announced) to almost £5bn

Restoring per pupil funding to 2010 levels in real terms, equivalent to a cash increase for every pupil of more than £1,500

30,000 new school places for children with special needs and disabilities

New 50% business rates discount for businesses in the retail, hospitality and leisure sectors, including pubs, music venues, cinemas, restaurants, hotels, theatres, and gyms

This will mean any eligible business can claim a discount up to a maximum of £110,000 - a tax cut worth almost £1.7bn

Mr Sunak says that, together with small business rates relief, this means more than 90% of all businesses in these sectors will see a discount of at least 50%

An overhaul of alcohol duty, cutting the number of main duty rates from 15 to six - the stronger the drink, the higher the rate

Small producer relief will extend the principle of small brewers' relief to small cidermakers and others making alcoholic drinks of less than 8.5% ABV

Sparkling wines will pay the same duty as still wines of equivalent strength, rather than the 28% they currently pay. Duty will also be cut for fruit cider

Planned rise in fuel duty will be cancelled, meaning that - after 12 consecutive years of frozen rates, the average car driver will save a total of £1,900

National living wage to increase next year by 6.6% to £9.50 an hour. For a full time worker, that's a pay rise worth over £1,000

This move will help more than two million of the lowest-paid workers, Mr Sunak says

Mr Sunak says his goal is to reduce taxes and the universal credit taper, which reduces financial support as people work more hours, is in his sights

The rate is currently 63%, so for every extra £1 someone earns, their universal credit is reduced by 63p. Mr Sunak announces plans to cut this by 8 percentage points (from 63% to 55%)

Work allowances being increased by £500 - combined with the change to the taper, this is a tax cut worth more than £2bn, he says. Nearly two million families will keep, on average, an extra £1,000 a year


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