The UK’s Autumn Budget, unveiled by the Chancellor of the Exchequer, outlined the government’s tax and spending plans for the year ahead. There is set to be a major increase in public spending after better than expected economic growth, with pay rises for millions, tax cuts for businesses and a pledge to build thousands of affordable homes.
What shape is the UK economy in?
- Inflation is currently at 3.1% and is expected to average 4% over the next year
- The UK economy is forecast to return to pre-Covid levels by 2022
- Unemployment is expected to peak at 5.2% next year, considerably lower than the 11.9% previously predicted
- Wages have grown in real terms by 3.4% since February 2020, as a result of widespread labour shortages and high unemployment rates throughout the pandemic
- Borrowing as a percentage of GDP is expected to fall from 7.9% this year to 3.3% next year
How is the government planning to boost the economy?
- Total government spending will increase by £150bn by 2024-25, marking the largest increase this century
- Funding will increase across the devolved nations: £4.6bn for the Scottish Government, £2.5bn for the Welsh Government, and £1.6bn for the Northern Ireland Executive
- New 50% business rates discount for businesses in the retail, hospitality, and leisure sectors in England
- Increased investment in UK research and development projects by a quarter to £20 billion by 2024-25
- £750m in new investment incentives in England, including tax relief for “eligible green investments”
What does the Budget mean for public services?
- £2.3bn over the next 3 years to transform diagnostic services, with at least 100 community diagnostic centres across England
- £2.1bn over the next 3 years to support “innovative use of digital technology” to keep hospitals and other care organisations as connected and efficient as possible
- £1.5bn over the next 3 years for new surgical hubs, increased bed capacity and equipment to help elective services recover
- An additional £4.7bn by 2024-25 for the core schools budget in England, £2.6bn of capital funding for new school places for children with special educational needs and disabilities, and £1.8bn of additional money for education recovery
- Additional £1.9bn funding for England’s criminal justice system, to bring the increased number of offenders to justice and start to reduce backlogs in criminal courts caused by COVID-19
What does the Budget mean for individuals?
- Permanently cutting the Universal Credit taper rate by 8% from 63p to 55p
- £11.5bn support to build up to 180,000 affordable homes
- Minimum wage and apprentice rates to increase from 1 April 2022
- Planned rise in fuel duty to be cancelled amid record pump prices
- Additional £90m for the Job Entry Targeted Support Scheme to help the unemployed find jobs
- £302m to fund new programmes to support parents, provide bespoke breastfeeding services and parent-infant mental support
- £560m of new funding for the UK-wide Multiply programme to support up to 500,000 adults to improve their numeracy skills
- £639m per year by 2024-25 to end rough sleeping in England, an 85% increase compared to 2019-20
- Alcohol duties to be frozen for the 3rd year in a row, saving consumers an estimated £3bn
- £355m to keep people safe, cut crime and help victims of sexual abuse in England and Wales, including £50 million for the Safer Streets Fund
What does the Budget mean for business owners?
- New 50% business rates discount for businesses in the retail, hospitality, and leisure sectors in England
- Next year’s planned business-rates multiplier increase will be cancelled
- An extension of the temporary £1m level of the Annual Investment Allowance to March 2023 to help businesses invest and grow
- A new “business rates improvement relief” scheme to be announced in the near future, with a 12-month relief period for firms to invest in their premises
- The bank surcharge - a tax on top of the usual corporation tax that banks pay on their profits - will be cut from 8% to 3% to help keep financial services competitive and reduce taxation
What does the Budget mean for the fight against climate change?
- £6.1bn for the Transport Decarbonisation Plan to boost the number of zero-emission vehicles
- £380m for the offshore wind sector, boosting jobs and investment across the UK, including offshore wind ports in Teesside and the Humber
- £3.9bn to decarbonise buildings, including £1.8bn to support low-income households to make the transition to net zero
- £625m for the Nature for Climate Fund to plant at least 7,500 hectares of trees every year in England by 2025
- £250m to “protect and restore nature” in England as part of the UK’s target to halt biodiversity decline by 2030
More on the Autumn Budget
For more information on the government's plans for the year ahead, head to the GOV.UK's round-up of the major announcements, or check out everything you need to know about the National Living Wage increase.
