2021 Budget

Chancellor promises a stronger economy for British people
By the time the Chancellor Rishi Sunak took to his feet in the House of Commons to deliver his budget much of the detail had already been revealed – including new money for the NHS, a rise in the National Living Wage from £8.91 an hour to £9.50, as well as public sector pay rises.
Mr Sunak started on a positive note with the news that UK economic growth for 2021 has been revised upwards from 4% to 6.5%, which means the economy is expected to return to pre Covid levels at the turn of the year, quicker than forecast. But he warned the Budget does “not draw a line under Covid” and warned of challenging months ahead.
Mr Sunak addressed rising inflation, which he said was due to number of global factors including increased demand for goods since the world has opened up after the pandemic. It has already hit 3.1% and is likely to rise further, with the Chancellor suggesting higher prices are likely to continue beyond Christmas.
He announced what he claimed was the biggest business rates cut in modern British history announcing for one year, a 50% business rates discount for businesses hardest hit by the pandemic, including those in the retail, hospitality, and leisure sectors. Alongside the Small Business Rates Relief, the chancellor said his measures mean more than 90% of all retail, hospitality and leisure businesses will see a discount of at least 50% up to a maximum of £110,000. “Apart from the Covid reliefs, this is the biggest single-year cut to business rates in 30 years,” he adds.Mr Sunak expanded R&D tax credits to help encourage investment in cloud computing and data costs. He added he will look at ensuring investment from the tax break is spent in the UK rather than overseas.
The Chancellor also promised to spend £3.8bn on boosting skills over this Parliament, a 38pc rise. It will include a £560m Multiply programme to improve adults’ basic maths skills.
He also cancelled the planned rise in fuel duty which he said would help families and small businesses.
He spoke about levelling up the UK has an “uneven economic geography” which needs resolving as the UK comes out from “the worst economic shock we’ve ever seen”.
But it wasn’t just at home he wanted to level up – he pledged if the economy’s growth is strong the government would return to spending 0.7 % on international aid in 2024/25 – before the end of this parliament in 2024.
As is usually the case, he kept one of his biggest announcements until the end. There has been huge criticism of the plan to withdraw Universal Credit which would see those eligible lose with the announcement that he will cut the universal credit taper rate from 63% to 55%. He said it would be introduced by no later than 1 December. But this drew strong criticism from the Shadow Chancellor Rachel Reeves who condemned the “arrogance” of the Chancellor for “taking £6bn out of the pockets of the poorest people” in scrapping the universal credit uplift, then “expecting them to cheer today for £2bn to compensate”.