October 2021 United Kingdom budget

Last updated

October 2021 (October 2021) United Kingdom budget
Royal Coat of Arms of the United Kingdom (HM Government).svg
PresentedWednesday 27 October 2021
Parliament 58th
Party Conservative Party
Chancellor Rishi Sunak
‹  March 2021
Rishi Sunak making the announcement of the autumn budget Autumn Budget and Spending Review 2021 Speech.png
Rishi Sunak making the announcement of the autumn budget

The October 2021 United Kingdom budget, officially known as the Autumn Budget and Spending Review 2021. A Stronger Economy for the British People, was a budget statement made by Chancellor of the Exchequer Rishi Sunak on 27 October 2021. [1] It was the third and final consecutive budget delivered by Sunak before his resignation in July 2022. [2]

Contents

Many of the announcements to be made in the budget were previewed before budget day, drawing criticism and anger from the House of Commons. In response to the criticism, Sunak said the budget "begins the work of preparing for a new economy". [3]

Key issues

BBC News reported six key issues expected to be addressed in the budget: [4]

Other issues included regional transport, [5] High Speed 2 and the Northern Powerhouse. [2]

Changes announced

The budget increased in-work support through the Universal Credit system by increasing the work allowances by £500 a year, and reducing the post-tax deduction taper rate from 63% to 55%. [6] It also simplified alcohol duties in a way which benefited lower-strength drinks [7] and cut the surcharge on UK bank profits to 3% and raised the surcharge threshold to £100m. [8]

Development funding of £5m was allocated for the reopening of Wellington and Cullompton railway stations. [9] Devon County Council was given £50,000 toward the cost of creating of a new Tavistock railway station and the reconstruction of the line to serve it. [10]

£560m of investment was announced for the Levelling Up White Paper. [11]

Response

Labour leader Keir Starmer tested positive for COVID-19 and so was replaced by Ed Miliband at Prime Minister's Questions. [12] Shadow Chancellor of the Exchequer Rachel Reeves responded to the budget in the House of Commons. [13] Leader of the Liberal Democrats Ed Davey said the budget made Sunak appear "out of touch". [14] Tom Harris in The Daily Telegraph described the budget as Brownite. [15]

The Institute for Fiscal Studies (IFS) said the budget would leave millions of people worse off in 2022, predicting that inflation and higher taxes on incomes would offset small wage increases for middle earners, while poorer households would feel "real pain". [16] [17] The Resolution Foundation calculated that the budget would increase incomes of the poorest fifth of households by 2.8% but reduce middle incomes by about 2%. [18] The budget increased public spending to levels not seen since the 1970s, according to The Daily Telegraph . [19]

The IFS also noted that changes to alcohol duty may not apply to Northern Ireland because of the Northern Ireland protocol agreed between the UK and the European Union following Brexit. [20]

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References

  1. ↑ "Budget 2021: What is it and when will it happen?". BBC News. 21 October 2021. Retrieved 24 October 2021.
  2. 1 2 "Budget 2021: Rishi Sunak fails to commit to eastern HS2 leg days before autumn Budget is revealed in Commons". Sky News. Retrieved 24 October 2021.
  3. ↑ "Budget 2021: Sunak promises new post-Covid economy". BBC News. 27 October 2021. Retrieved 27 October 2021.
  4. ↑ "Budget 2021: Six things that could affect you". BBC News. 22 October 2021. Retrieved 24 October 2021.
  5. ↑ "Budget 2021: English city regions to get £6.9bn for public transport". BBC News. 23 October 2021. Retrieved 24 October 2021.
  6. ↑ Verma, Hamant; Crozier, George (27 October 2021). "Low Incomes Tax Reform Group: Good news for some UC claimants - but the detail is key". politics.co.uk. Retrieved 28 October 2021.
  7. ↑ Davies, Rob (27 October 2021). "Sunak unveils overhaul of alcohol duty and tax cuts on some drinks". The Guardian.
  8. ↑ Morris, Stephen (27 October 2021). "Tax surcharge on UK bank profits cut to 3% in Budget". Financial Times.
  9. ↑ "Budget 2021: Funding backs reopening of Cullompton Railway Station". BBC News Online . 28 October 2021. Retrieved 29 October 2021.
  10. ↑ Clark, Daniel (2 November 2021). "Tavistock railway return gathers steam after extra funding". Local World / Plymouth Herald. Retrieved 2 January 2022.
  11. ↑ "Areas with weak education targeted for levelling up". BBC News. 1 February 2022. Retrieved 2 February 2022.
  12. ↑ "Budget 2021: Labour leader Sir Keir Starmer misses debate after positive Covid test". BBC News. 27 October 2021. Retrieved 28 October 2021.
  13. ↑ Fisher, Andrew (27 October 2021). "Rachel Reeves' Budget response was admirable, but Labour must be bolder to take down the Tories". inews.co.uk. Retrieved 28 October 2021.
  14. ↑ Sir Ed Davey MP says 2021 Budget shows Chancellor Rishi Sunak is 'out of touch' , retrieved 28 October 2021
  15. ↑ Harris, Tom (27 October 2021). "This Brownite Budget left Labour with little to complain about" . The Daily Telegraph. ISSN   0307-1235 . Retrieved 28 October 2021.
  16. ↑ "Budget 2021: Millions will be worse off in 2022, says IFS". BBC News. 28 October 2021.
  17. ↑ Wright, Oliver; Smyth, Chris; Zeffman, Henry (28 October 2021). "Budget 2021: Middle earners will be 'worse off' next year after Sunak's spending spree". The Times.
  18. ↑ "Tax burden to rise by £3,000 per family, warns think tank". BBC News. 28 October 2021. Retrieved 28 October 2021.
  19. ↑ Riley-Smith, Ben (27 October 2021). "The drinks are on me, declares Rishi Sunak in Budget spending spree". The Telegraph.
  20. ↑ "Budget 2021: UK alcohol tax reforms might not apply in NI". BBC News. 28 October 2021. Retrieved 28 October 2021.
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