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
and live on Freeview channel 276
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
PMQs cont'd #1
Miliband says we are only on course to reduce emissions by 7.5% rather than half.
“Does the PM acknowledge how far away we are from the action required?”
“Indeed I do,” says Boris Johnson, who probably can’t quite believe his luck.
“Every day countries are coming through with solid commitments... whether they’re going to be enough I’m afraid it is too early to say”.
Miliband urges PM not to “shift the goalposts” and keep the focus on 2030, rather than 2050.
Johnson says, “what you can’t do is go in advance of what is truly practicable for the world economy and what people can do.
He added: “This government will go as fast as we possibly can.”
PMQs cont’d #2
Miliband showing an ease at the dispatch box and a quickness of thinking that was rarely present during his time as leader of the opposition.
Johnson criticises Labour’s plans and Miliband fires back to say “Statesmanship, not partisanship,” is what’s needed.
He adds: “He should not be trying to score party political points on such an important issue facing our country and world.”
Another joke from Ed, who looks to be enjoying himself: “That’s never the way I did PMQs!”
Ed Miliband finishes what has been a pretty uneventful PMQs.
“In these final days before COP26 we need more than warm words,” he says.
He adds COP26 has to be, “a summit of climate delivery not climate delay”.
Responding, Johnson says this government has a “sensible, pragmatic, conservative approach that cuts Co2 that tackles climate change and delivers high skill high wage jobs across this country”.
Johnson looks buoyed, seems to have enjoyed having a different sparring partner, particularly as the stakes were so low.
Deputy Speaker’s statement
Dame Eleanor Lang MP, the deputy speaker of the House of Commons, has spoken out about the pre-briefing of policy announcements to the media, following a furious statement from the speaker Sir Lindsay Hoyle yesterday.
“before I call the chancellor of the exchequer to make his budget statement it is my duty to take the unusual step of saying a few words
“I share the concern of many members of this house about the apparent pre briefing of budget material to the media before any announcements had been made in this house.
“I understand the chancellors position and its well understood that for a number of years elements of the budget have been pre briefed to the media on an embargoed basis to aid their coverage of it.
“But such pre briefing where the embargo makes clear that the material can only be used after the chancellor has addressed this house is rather different to what we have apparently experienced this year. that is the briefing to the media of details of the budget statement to be published before the statement is delivered.
“As Mr Speaker has said and all ministers know, important policy announcements should be made first to Parliament.
“Given my responsibilities to the house with regard to the budget, I must put on record my support for Mr Speaker’s stance on this issue and express a firm hope, which I believe is felt on all sides of the house, that we do not find ourselves in this position again at future budgets.”
After some further preamble, she calls the Chancellor of the Exchequer, Rishi Sunak.
Sunak speaks #1 - Rising inflation
“Growth up, jobs up and debt down, let there be no doubt, our plan is working.”
Sunak kicks off the speech by highlighting the favourable economic outlook.
Less than a minute or so in we have our first mention of ‘levelling up’.
Talks about the “awesome power of opportunity” which should be available to everyone, regardless of whereabouts in the UK they come from.
He says Covid will give way to “the prime minister’s economy” of high wages, “where the only limit to our potential is the effort we are prepared to put in”.
He mentions rising inflation, and offers to explain what is happening (very kind, Rishi).
He says OBR expects CPI will go up over next year.
He says this is because of demand increasing globally faster than supply chains can account for.
He says it is also caused by growing energy demand, leading to increased prices.
He says the pressures caused by this will “take months to ease” but they aren’t unique to the UK.
But government will act to do as much as it can, he says.
Sunak announces that the suspension of the HGV levy, already extended until August, will be further extending 2023 and excise duties for heavy duty vehicles will also be frozen.
Sunak speaks #2 - OBR forecasts
Sunak touts the OBR’s improved forecasts with a wide grin.
“In July last year at the height of the pandemic, unemployment was expected to peak at 12% now it is expected to peak at jjust 5.2% - that means over 2m fewer people out of work than previously feared.”
And wages are rising, he says, compared to February 2020 they’ve grown “in real terms by almost 3.5%”.
“Today’s forecasts confirm beyond doubt that our plan for jobs is working”.
Sunak speaks #3 - New fiscal rules
Sunak says we need to strengthen public finances so that when the next crisis comes, we have the headroom to act.
He will set out two new fiscal rules.
“Underline public sector net debt excluding impact of BoE must as a percentage of GDP be falling”
“In normal times, the state should only borrow to invest in our future growth and prosperity. Every day spending must be paid by taxation.”
He says the House will have an opportunity to vote on these rules, practically daring Labour to vote against.
Sunak says it would be a vote on whether “to abandon our fiscal anchor and leave our economy adrift with reckless unfunded pledges or to vote for what we on this side of the house know is the right course. Sound public finances and a stronger economy for the British people.”
Sunak says the OBR report shows that all the fiscal rules are being met.
Sunak speaks #4 - all departmental budgets to increase in real terms
Today’s budget increases total departmental spending over this parliament by £150bn, biggest increase this century with spending growing more than 3% in real terms each year.
He says there will be a real terms rise in overall spending for every single department, and public sector net investment as a share of GDP will be at highest level for half a century.
He says this budget confirms it, “the Conservatives are the real party of public services”.
Sunak speaks #4 - spending pledges galore
A few pledges all fired out at once here.
- From current level of £133bn, healthcare spending will rise to over £177bn by the end of this parliament
- Health capital budget will be largest since 2010, record investment in health R&D, 40 new hospitals, 70 hospital upgrades, more operating theatres and 100 community diagnostic centres
- 50k more nurses, 50m more primary care appointments
- Government will provide local government with £4.8bn grant funding for social care
- A multi-year settlement totalling nearly £24bn
- Including £11.5bn to build up to 180k new affordable homes
- An extra 1.8bn to convert brownfield sites, equal to 1500 hectares worth or 1 million new homes
- £5bn to remove unsafe cladding from highest risk buildings - this will be partly funded by residential property developers tax which will be levied against developers with profits over £25m at a rate of 4%
- £640m a year for rough sleeping and homelessness
The budget “funds our ambition” to recruit 20k police officers
- Provides 2.2bn for courts prisons and probations (500m to reduce backlog)
- Over next 3 years, £3.8bn on largest prison building programme in a generation
Sunak speaks #5 - Children, schools and levelling up
Education is an interesting area for Sunak, as he has long been reported to have shot down the Department for Education’s asks for big cash investments to help with catch-up from Covid. Sir Kevan Collins the former catch up tsar said more than £10bn would be needed, but government has so far only offered just over £3bn.
He says the “evidence is clear” that the first 1001 days of a child’s life are the most important.
Says budget provides:
- £300m for a “start for life offer” for families, “high quality” parenting programmes and funding to create a network of family hubs.
- Childcare providers will be paid more, with an extra £170m extra funding by 2024/2025
- £150m to support training and development for early years workforce
- £200m for supporting families programme
- over £200m to continue holiday activity and food programme
- Extra £4.7bn by 2024/2025, which will “restore per pupil funding to 2010 levels in real terms”.
- For children with special educational needs, tripling the amount investing to create 30k more places
- £3.1bn to help education recovery already announced, today we go further, with just under £2bn for schools and colleges - total “just under £5bn” (subdued reaction to this
Sunak moves on now to ‘levelling up’ and improving communities across the UK. Says the Budget will provide:
- £560m for youth services, enough to fund 300 across the country
- £200m for football pitches
- Funding for 100 areas to be turned into pocket parks
Sunak says he is allocating the first round of bids from levelling up fund, £1.7bn to invest in infrastructure of every day in life in over 100 local areas.