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

Sunak is rattling through Budget at a fair pace (must be that sugar rush we talked about earlier) so here’s a roundup of some of the biggest *new* announcements so far

- An end to austerity? Sunak says this budget will provide a real-terms increase to every departmental budget, with a total increase of £150bn by the end of this parliament

- Health and social care The Chancellor confirmed that overall health spending will go up, funded in part by the new social care levy on National Insurance, which will fund among other things “40 new hospitals, 70 hospital upgrades, more operating theatres and 100 community diagnostic centres, 50k more nurses and 50m more primary care appointments”.

- Housing Sunak confirmed the budget will provide “multi-year settlement totalling nearly £24bn, including £11.5bn to build “up to 180,000 new affordable homes”

- No real movement on cladding The full details are yet to be confirmed, but it sounds like the government is yet to find a solution to the building safety crisis that will help many leaseholders facing massive bills. Sunak said the government will provide £5bn “to remove unsafe cladding from highest risk buildings” - but this isn’t new money and has already been criticised by experts as woefully inadequate considering the scale of the issue

- Education remains a weakness Despite pleas from the sector and the government’s own former catch up tsar Sir Kevan Collins, Sunak fell fall short of what’s been asked of him in terms of funding the education recovery post Covid. In what came across as the most shifty part of the speech so far he reiterated the government’s existing offer of £3.1bn and said the Government would “go even further” with “just under £2bn for schools and colleges, totalling “just under £5bn” - this prompted a very subdued reaction from his own benches

Sunak namechecks the The British Museum, Tate Liverpool and York railway museum saying the Budget provides £800m for museums and galleries, plus

- 100 regional museums and libraries will be renovated and restored

- £2m for a ‘new Beatles attraction’ on Liverpool waterfront

- Tax relief for cultural venues will be doubled until April 2024

In which Rishi Sunak burnishes his unionist credentials.

He says the budget will provide increased average spending per year worth :

- £4.6bn for Scottish government

- £2.5bn for the Welsh Assembly

- £1.6bn for the Northern Ireland Executive

He says these will be the ‘largest block grants since devolution settlements of 1998’

Sunak says the Government’s is delivering on the PM’s promise of an infrastructure revolution.

He says the integrated rail plan will be “published soon”

Reiterates pledge of £5.7bn for ‘London-style’ transport settlements to devolved English regions

Says the Budget provides £2.6bn for local road upgrades and £5bn for local roads maintenance

Adds that funding for buses, cycling and walking totalling more than £5bn will be made available

Dominic Cummings will be pleased to hear Sunak talking up R&D spending.

He says the Government will reach 20bn on R&D a year by end of this parliament - in addition to cost of R&D tax reliefs.

He says that this a rise from 0.7 of GDP in 2017 to 1.1% by end of this parliament.

Will also increase Innovate UK’s budget to £1bn.

Sunak says success depends not just on schooling for children, but also lifelong training for adults.

Skills spending will increase over this parliament by £3.8bn, he says.

He says the Government will tackle the “tragic fact” of poor numeracy and reading skills among adulty, with a £560m programme, Multiply.

The Chancellor said he was “radically” simplifying alcohol duty by introducing a system designed around the principle of “the stronger the drink, the higher the rate”.

Mr Sunak said he is ending the “irrational” 28% duty premium on sparkling wines and duty on fruit ciders will be cut.

He said the planned increase in duty on spirits, wine, cider and beer will be cancelled.

A draught relief will apply a lower rate of duty on draught beer and cider, Mr Sunak said, cutting the tax by 5% on drinks served from draught containers over 40 litres and bringing the price of a pint down by 3p.

The planned rise in fuel duty will be cancelled because of pump prices being at their highest level in eight years, the Chancellor said.

Rishi Sunak announced an 8% cut to the Universal Credit taper rate.

He said: “The Universal Credit taper withdraws support as people work more hours. The rate is currently 63%, so for every extra £1 someone earns, their Universal Credit is reduced by 63p.

“Let us be in no doubt: this is a tax on work – and a high rate of tax at that.”

He added: “To make sure work pays, and help some of the lowest income families in the country keep more of their hard-earned money, I have decided to cut this rate, not by 1%, not by 2% – but by 8%.”

Mr Sunak said the tax cut would be worth more than £2 billion and would be introduced by no later than December 1.

Struggling families will believe Rishi Sunak is “living in a parallel universe” following his Budget, Labour has said.

Shadow chancellor Rachel Reeves told the Commons: “Families struggling with a cost-of-living crisis, businesses hit by a supply chain crisis, those who rely on our schools and hospitals and our police… they won’t recognise the world the Chancellor is describing.

“They will think he is living in a parallel universe.”