UK Chancellor Rishi Sunak today promised his Budget will deliver a “stronger economy for the British people” and leave them in “no doubt” the government’s plan is working.
Here are 10 things you need to know:
1. UK economic growth revised up
The Office for Budget Responsibility (OBR) has revised up its forecasts for UK economic growth.
The OBR now expects gross domestic product (GDP) to expand by 6.5% this year compared to the 4% it forecast at the Budget in March. This is below what the Bank of England expects – it is predicting 7.4% growth.
2. Four fiscal rules
Rishi Sunak says he has made “four fiscal rules in this Budget”.
Firstly, the fiscal situation in the UK is between four to six times more “sensitive” than it was before the pandemic.
Secondly, Sunak wants to continue to help working families.
Thirdly, he wants to meet obligations to the world’s poorest people, with aims to return to spending 0.7% of GDP on overseas aid by 2024.
Fourthly, he says spending is growing by 3.8% a year in real terms.
3. £24bn marked for housing
Chancellor Rishi Sunak today announced that he’s earmarking £24bn for “a multi-year housing settlement”. Head over to our sister site London Loves Property to read more
Sunak says the planned rise in fuel duty will be cancelled. He added that with fuel prices at the highest level in eight years, he is “not prepared to add to the squeeze on families and small businesses”.
It amounts to a saving over the next five years of nearly £8bn.
5. Draught beer duty slashed
The chancellor announced a “draught relief” to help pubs bounce back. This will apply a 5% cut to duty on draught beer and cider served from draught containers over 40 litres.
6. Bank surcharge cut
Sunak has announced a cut to the bank surcharge that was introduced in 2015 by George Osborne.
Banks pay a surcharge of 8% on their profits, on top of the current 19% corporation tax. With corporation tax now set to rise to 25%, that would mean banks would be paying 33%.
7. Education fund
Sunak unveiled an additional £2bn for education recovery in England in the Budget, taking the total so far to around £5bn. However, it fell short of the £10bn-£15bn called for by education charities, unions and the government’s former advisor Sir Kevan Collins.
8. 50% rates discount for hospitality
Sunak has confirmed a new 50% business rates discount for companies in the retail, hospitality, and leisure sectors, lasting for one year.
“Pubs, music venues, cinemas, restaurants, hotels, theatres, gyms, any eligible business can claim a discount on their bills of 50%, up to a maximum of £110,000,” he said.
9. Lower rate of Air Passenger Duty for UK flights
The chancellor has announced a policy that is sure to raise the heckles of climate campaigners ahead of the COP26 climate conference – but which will please those who frequently fly around the UK.
10. Research and development
Sunak said he will maintain the target to increase research and development investment (R&D) investment to £22bn.