Budget 2021: key points from Rishi Sunak’s speech, alcohol duty overhaul, public sector pay rise

The Chancellor has delivered the second financial statement of the year, following the last Budget in March

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Rishi Sunak has delivered the second Budget of the year, as well as a Spending Review which laid out government spending over the next three years.

The contents of his speech were widely reported in the days before the Budget.

Deputy Speaker of the House of Commons Dame Eleanor Laing criticised the “apparent pre-briefing” of the Budget to the media.

Sunak started delivering his speech at around 12:40pm, after Ed Miliband and Boris Johnson went head to head at PMQs. It lasted for around an hour.

Labour leader Sir Keir Starmer was forced to miss PMQs and responding to the Budget after testing positive for Covid.

Shadow chancellor Rachel Reeves led Labour’s response, saying that struggling families will believe Sunak is “living in a parallel universe” following his Budget.

Here were the updates as they happened from the Budget.

Budget 2021 live updates

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We’re going to close the live blog now but make sure you read the latest reaction to the Budget on NationalWorld. We’ll be looking at how pubs, environmental groups and education unions have reacted to today’s speech, as well as explain what the Budget means for you. Here’s a round-up of some of the stories you can read on our site now:

Welcome to Budget day

Hello, welcome to NationalWorld’s liveblog coverage of the 2021 Autumn Budget and spending review.

The Chancellor’s speech later today won’t offer quite as many surprises as it should, thanks to a considerable briefing operation which has seen many of the big announcements already appearing in the papers in the days leading up to it - much to the speaker’s chagrin.

Though you can probably still expect Sunak to pull a few rabbits out of his hat, particularly thanks to the Office for Budget Responsibility’s forecasts, which are slightly better than anticipated and could mean the Chancellor has a bit more money to play with than he’d expected.

Either way, its set to be a busy day in Westminster, with the budget statement due to take place straight after Prime Minister’s Questions.

Here’s the full schedule -

8:30am - The Chancellor briefed the Cabinet on what’s in the budget

10:45am - Sunak will leave No. 11 Downing Street and head across to Parliament

12:00pm - Prime Minister’s Questions will take place as usual, in what could well be a particularly fiery affair

12:40pm - Sunak will stand at the dispatch box and deliver his Budget and Spending Review

1:30pm - Sunak due to finish his speech: reports suggest the speech will not be as long as some previous budget announcements, which would be in keeping with Sunak’s style, but Labour’s Shadow Chancellor Rachel Reeves will follow Sunak with her response

Much to the dismay of Sir Lindsay Hoyle, much of what’s set to be announced in the Budget today has already been reported in the press.

The speaker of the House of Commons was furious as he gave a statement criticising the leaks to the media yesterday.

This led to a Treasury minister officially confirming some of the measures, including the plans to increase the National Living Wage from £8.91 to £9.50, and to end the public sector pay freeze, although the pay increases will not be confirmed until next year.

Among the other announcements to come out before the Budget, the Government said it will provide a £5.9bn capital spending boost for the NHS, aimed primarily at clearing the backlog by upgrading key infrastructure.

Further spending pledges to be officially announced later today include a £6.9bn capital boost to improve transport links all over the country, £5bn toward scientific research and development, and a £3bn investment in skills training.

These pledges and a handful of others all relate to capital spending, while further information on departmental budgets - which set the levels of day to day spending - will come with the full speech, with some cuts expected.

The government has also been criticised already for attempting to present some of the pledges as entirely new, when some of the money has already been announced.

On transport spending for instance, Sunak admitted on the Andrew Marr Show that of the £6.9bn, only £1.5bn was new money which had not previously been announced.

What else has already been announced?

- An overhaul of the way alcohol is taxed in the UK, with speculation it could be changed to favour pubs and venues over supermarkets - this one is pretty much nailed on, considering reports that the Sunak and Johnson will be doing a press visit to a brewery this afternoon

- £2.6bn for more school places for children with special educational needs and disabilities, although there are reports that the Department for Education is set to lose out overall from the budget

- £1.8bn earmarked to turn brownfield sites into new homes

- £1.4bn for a new “Global Britain Investment Fund” aimed at bringing in foreign investment and talent to the UK

- £850m to revamp museums, galleries and cultural hotspots, with the V&A, Tate and Natural History Museum all set to benefit

- £700m to beef-up Britain’s border security, and immigration system, including new patrol boats for the Border Force

- £700m million for sport and youth clubs including 8,000 new sports pitches

- £560m on a numeracy scheme called Multiply to help half a million adults improve their maths skills

- £435m to be put toward crime prevention, including better CCTV systems and improved street lighting

Late reports are coming in that one of the rabbits Sunak has waiting to be plucked from his hat today is a u-turn on the planned cut to the £1000 per year Universal Credit uplift, which was withdrawn earlier this year despite pleas from charities that it would force millions of people into poverty.

Greater Manchester Mayor Andy Burnham told Radio 4 this morning that he has heard strong rumours that a u-turn is set to be delivered - perhaps in light of the revised OBR forecasts which predict the UK’s economy will fare slightly better than originally expected.

Burnham tried to cast the potential u-turn as a victory for Labour, who he says have campaigned hard for the uplift to be retained, but it’s hard to imagine the public seeing it that way.

Despite the anguish and worry that cutting the uplift in the first place will have caused, it will be a major boon for the Tories if the Chancellor does indeed confirm that as well as an increase in the National Living Wage, the UK’s poorest families will also be able to keep the uplift that has helped them through the worst of the pandemic.

‘Mythbusting’ with Miatta Fahnbulleh

An interesting pre-Budget Twitter thread here from CEO of the New Economics Foundation, Miatta Fahnbulleh, who says that all is not quite as rosy as the Chancellor has tried to imply in the run up to today’s announcement.

On the ubiquitous claim that the UK is enjoying a particularly strong Covid recovery, she says: “Our economy was one of the worst hit, so we are growing from a low base. The IMF says our economy is still 5% below its pre-pandemic path. & our economy is projected to lag behind all G7 countries in 2024.”

Fahnbulleh also plays down Sunak’s insistence that the Government must “balance the books” before the end of this parliament.

“We don’t,” she says, “The [Bank of England] bought up 99.5% of the debt the government borrowed during the pandemic.

“The Bank of England is the most patient creditor the government could hope for. This buys us time to invest now & solve the myriad of problems with the economy.”

Read the full Thread below.

Over in Labourland... What kind of Chancellor would you be?

While the Treasury team have been busily applying the finishing touches to the Autumn Budget, it seems Labour’s shadow treasury team have been putting together a Buzzfeed-style quiz, titled ‘What kind of Chancellor are you?’

Question one reads:

“It's your first day on the job. What do you decide to do?

A: Give dodgy contracts to your mates


B: Put together a hit squad to tackle government waste”

All good fun, I guess? But if this is the best Labour can do on Budget day then when Rachel Reeves takes the quiz herself to find out what kind of Chancellor she’d be, the answer will inevitably come back “Shadow”.

Play along for yourself, here to find out what kind of Chancellor you’d be.

Sugar rush - Sunak to deliver a ‘Twix and Sprite’ budget

It was once a tradition for the Chancellor to take an alcoholic drink with them to the dispatch box when delivering the budget.

The last Chancellor who did was Ken Clarke, in 1997, who sipped scotch as he delivered what would be the last Conservative budget for more than a decade.

Of the Chancellors since then - Gordon Brown, Alastair Darling (remember him?!), George Osbourne, Philip Hammond, Sajid Javid and now Sunak - none have readopted the boozy tradition.

As a teetotaller, Sunak was never likely to reprise it, though he did reveal his choice of pre-Budget boost speaking with Times Radio earlier this week.

“I have a sugar problem” Sunak confessed, revealing that he will have a can or Sprite and a Twix before he sets out the nation’s finances.

Perhaps that’s why his speech, billed at less than an hour, is set to be relatively short compared with many of his predecessors - he wants to be off the stage before the crash hits.

He’ll no doubt hope that the effect of the measures he lays out in the budget won’t mirror the impact his choice of pre-budget refreshments will have on him - a short sharp burst of energy which will all too soon give way to a significant crash.

Watching from the wings - How Sunak’s political competition will view his Budget speech

Among the many people closely watching the Chancellor’s performance today will be his boss, Boris Johnson.

Though tensions between the pair seem to have simmered since a couple of high profile clashes earlier this year, there’s no doubt that Sunak is still widely regarded as the frontrunner to replace Johnson.

If Johnson has a vulnerability among his party’s base it might be his perceived keenness to solve every problem with money, although that could equally be said to be part of his appeal in the country at large.

Sunak has already made it clear that he intends to try and strike a similar balance, although while paying significantly more lip-service to fiscal responsibility than his prime minister - which could prove to be a potent strategy.

There’s no job in the cabinet more likely to lead to being prime minister than Chancellor, although Foreign Secretary comes close, which is interesting given the current holder of that office, Liz Truss, is also widely regarded as the next most likely to succeed Johnson after Sunak.

Truss will likely also be watching the Chancellor’s performance closely, and though a leadership challenge currently seems some way off, she might already be looking for potential weaknesses to exploit in a future contest.

For Truss, whose economic-liberal principles are as well-burnished as any in the Cabinet, the path to beating Sunak might lay in presenting herself as the only true Conservative when it comes to tax and spend.

I’ve written before about whether Sunak is in fact the PM-in-waiting he is often considered to be, or if he’s more of kind of political Icarus - we’ll have a better idea after today.

Functioning opposition latest...

Sir Keir Starmer has tested positive for Covid and is not in the House of Commons today as he is isolating.

Good job it’s a fairly quiet day.

Ed Miliband is stepping in at PMQs (just starting now)

As I’ve just reported, Starmer isn’t in the House of Commons today so former Labour leader and shadow cabinet minister Ed Miliband is stepping in.

Before getting underway he jokes it is “just like the old days” and reassures MPs that it is “one time only,” that he is back.

His first question is on climate, with COP26 just on the horizon, and whether the PM agrees that the 1.5C climate goal means we need to half global emissions in the next decade.

Not sure how last minute this change was but the question seems very floaty on what should have been a massive day for the opposition to get some of its key messages across.