- Mario Creatura has welcomed the Conservative Government’s Autumn Budget and Spending Review, saying it will help working families meet the cost of living, support businesses’ recovery, deliver world-class public services, and drive economic growth across the country.
- Key announcements to help with the cost of living include a significant tax cut for low-income families by reducing the Universal Credit taper rate from 63 per cent to 55 per cent, raising the National Living Wage to £9.50 an hour, increasing pay for public sector workers, and freezing fuel and alcohol duty.
- Measures to help drive economic growth and support businesses include cuts to business rates, new tax reliefs, and record spending on infrastructure and R&D – laying the foundations for a stronger economy as we build back better from the pandemic.
Mario Creatura has welcomed the Chancellor’s Autumn Budget and Spending Review, which provides the foundations for a stronger economy across every part of the United Kingdom as the country continues its recovery from the pandemic.
The Budget prioritises helping working families and vulnerable households with the cost of living, including through a significant tax cut for low-income families by reducing the Universal Credit taper rate from 63 per cent to 55 per cent, a 6.6 per cent increase in the National Living Wage to £9.50 an hour – giving a £1,000 pay rise to 2 million of the lowest paid – lifting pay restraints for public sector workers, a freeze in fuel duty for the twelfth consecutive year, and a freeze in alcohol duty – alongside radical reform to make the system simpler, fairer and healthier.
Businesses will also benefit from new measures, including a 50 per cent cut in business rates next year for 90 per cent of retail, hospitality and leisure – alongside a freeze of all rates – the creation of new business rates relief to encourage green technologies and improvements to properties, and a doubling of creative industries tax reliefs for the UK’s world-leading theatres, orchestras, museums and galleries.
Other measures to drive economic growth include record investment in our roads, railways and broadband; supporting innovation through a record £20 billion spending on R&D; and a huge uplift in skills training through T-levels, Institutes of Technology, and apprenticeships.
As part of the three year Spending Review delivered alongside the Budget, total government departmental spending will increase by £150 billion by 2024 – a 3.8 per cent annual real terms increase – the largest real terms increase this century, and record levels of capital investment not seen in 50 years.
This funding increase will help to deliver on the Conservative Government’s key manifesto promises, including building 40 new hospitals, recruiting 20,000 police officers, and raising per pupil spending in schools to record levels.
Underpinning these measures, the Budget strengthens the country’s public finances and will get debt falling again, following the £400 billion package of support put in place during the pandemic. The new fiscal rules set out today by the Chancellor will require the government to only borrow to invest and get debt falling by 2024, in line with the Conservative Government’s 2019 manifesto commitment.
Commenting, Mario said:
“Despite the unprecedented challenges caused by the pandemic, this Conservative Government is getting on with the job and delivering on the priorities of the British people.
“This Budget will make a real difference to local people, helping working families with the cost of living, supporting businesses with their recovery, and investing in our public services so that everyone gets the world-class hospitals, schools, and police services they deserve.
“I was elected on a promise to level up and improve opportunity for local people – and today’s Budget shows how this Government is delivering on that promise as we build back better.”
Commenting, Chancellor of the Exchequer Rishi Sunak said:
“One year ago, this country was in the grip of the biggest recession in 300 years. Thanks to our Plan For Jobs, we are today recovering faster than our major competitors, more people are in work, and growth is up. But uncertainty in the global economy means that recovery is now under threat.
“That is why this Budget and Spending Review delivers a stronger economy for the British people – strengthening our public finances, helping working families meet the cost of living, supporting businesses, delivering stronger public services, and driving economic growth.
“This is a Budget which will level up every part of the United Kingdom. It is a Budget which provides the foundations for a stronger economy.”
Key Budget measures:
This Budget helps working families meet the cost of living and supports vulnerable households:
- Cutting tax for low-income families by reducing the Universal Credit taper rate. To make sure work pays, and to help the lowest-income families in the country, the taper rate will be cut by 8 pence, taking it down from the current 63p to 55p. We are also increasing the Work Allowance by £500; taken together, this is a tax cut for 2 million low-income families worth £2.2 billion next year, or an extra £1,000 in their pocket. And we will introduce this no later than December 1st. This has been advocated by the Resolution Foundation, TUC, Centre for Policy Studies, Joseph Rowntree Foundation and the Centre for Social Justice. As an example, a single mother of two working full-time on the National Living Wage will be better off by around £1,200 a year – while a working couple with two children, both paid the National Living Wage, one working full-time and one part-time, will be better off by £1,800 every year.
- Increasing the National Living Wage by 6.6 per cent to £9.50. A Conservative government introduced the NLW in 2016. We are implementing the recommendations of the independent Low Pay Commission, raising the pay of 2 million of the lowest paid workers; someone on the NLW will see an annual salary increase of £1,000. We are also increasing public sector pay following a period of more targeted pay.
- Freezing fuel duty for the twelfth year in a row. Due to rising global oil prices, the average cost of filling up the typical family car has gone up by £3.40 in the last eight weeks alone. Today we are freezing fuel duty for the twelfth year in a row, a £1.5 billion tax cut, meaning the average driver has saved £1,900 since 2010.
- Radically simplifying alcohol duty to make the system fairer. As a result of leaving the EU, we are now able to reduce the number of alcohol bands from fifteen to just six, based around taxing alcoholic content. We are also introducing a new Small Producer Relief so small cidermakers are incentivised to grow larger. We are cutting the price of English sparkling wine and prosecco by as much as 64 pence, and cutting the tax on draught fruit ciders by 20 per cent. And until this new system is in place, we will freeze all alcohol duties for the third year in a row, including for whisky – a tax cut for families worth £500 million every year.
- Boosting pubs by cutting beer duty. We are also introducing a new Draught Relief which will apply a new, lower rate of duty on draught beer and cider – cutting duty by 5 per cent, the biggest cut to cider duty since 1923 and the biggest cut to beer duty for 50 years. This will boost British pubs by nearly £100 million a year – and means a permanent cut in the cost of a pint by 3 pence.
- Creating a new lower rate of Air Passenger Duty for domestic flights within the UK. Currently, flights within and between the four nations of the UK pay the same duties as international flights. From April 2023, flights between airports in England, Scotland, Wales and Northern Ireland will be subject to a new lower rate of APD than international flights, cutting duty by half for 9 million passengers. We will also introduce a new ultra long-haul band for the 5 per cent of passengers travelling the furthest.
- These build on steps we have already taken to help people with the cost of living. We have already put in place a £500 million Household Support Fund to help vulnerable families across the country this winter.
This Budget supports businesses to recover from the pandemic and incentivises them to invest:
- Cutting business rates by at least 50 per cent next year for 90 per cent of retail, hospitality and leisure businesses – and freezing all rates. Any eligible business – such as pubs, gyms, cinemas, restaurants and hotels – can claim a 50 per cent discount on their bills, up to a maximum of £110,000 per business. Taken together with Small Business Rates Relief, that’s a business tax cut worth £7 billion for over 700,000 eligible businesses – the biggest business rates tax cut in 30 years, and which comes on top of the £16 billion of support we have put in place throughout the pandemic. And we are cancelling next year’s planned increase in the business rates multiplier – a tax cut itself worth £4.6 billion.
- Creating new business rates reliefs to incentivise improvements and green investment. As called for by business organisations, these reliefs represent a new £750 million tax cut on investment. And to further support investment we are extending the £1 million Annual Investment Allowance for a further 15 months.
- Reforming the tonnage tax. Previously as a member of the EU, ships could qualify for special treatment in the British tax system while sailing under the flag of another country. Now we have left the EU, our tonnage tax will – for the first time ever – reward companies for adopting the flag of the United Kingdom.
- Doubling tax reliefs for the creative industries sector. On top of the £850 million we are providing for the creative industries sector over the next five years, we are also extending tax relief for museums and galleries by another two years to the end of March 2024 and doubling the tax reliefs for orchestras, theatres and museums from midnight tonight until April 2024 – a tax cut for culture worth almost £250 million.
- Widening our generous business rates relief for regional airports across England. In January, we introduced the Airport & Ground Operations Support Scheme (AGOSS) to support English airports with fixed costs such as their business rates. We are today extending this support by a further six months, equivalent to a full business rates holiday for almost all regional airports.
- A fair corporation tax rate on banks. Financial services are one of our most important industries, employing over 1 million people, two thirds outside London. We are retaining a corporation tax surcharge of 3 per cent, meaning that the overall corporation tax rate on banks will, in 2023, increase from 27 per cent to 28 per cent – higher than the standard 25 per cent paid by others. We are also raising the annual allowance to £100 million to support competition, consumers and challenger banks.
This Budget delivers stronger public services and levels up all four corners of the UK:
- Increasing total departmental spending by £150 billion by 2024: a 3.8 per cent annual real terms increase, the largest real terms increase this century, and record levels of capital investment not seen in 50 years.
Department for Health and Social Care
- Increasing health spending by 3.9 per cent in real terms over this Parliament – an increase of £41 billion.
- Largest health capital in a decade – funding 40 new hospitals, 70 hospital upgrades, more operating theatres for catch up, record R&D including for genomics and 100 new community diagnostic centres.
- Eradicating mental health dorms – replacing over 1,200 beds with more dignified en-suite rooms.
- Investing over £500 million a year in public health and prevention – providing weight management services and investing in early years support, on top of maintaining the public health grant.
Department for Education
- Increasing core schools funding by over £4.7 billion – ensuring reals terms per pupil funding rises to record levels, and £200 million to fund annual Holiday Activities and Food programme.
- Increasing skills funding by 42 per cent in cash terms – meeting our National Skills Fund commitment – across skills bootcamps, traineeships, apprenticeships, more 16-19 hours, Lifetime Skills Guarantee and Multiply.
- Tripling SEND capital provision to £900 million a year – building additional SEN and also more social care places.
- Supporting education recovery – through an extra £1.8 billion to extend learning hours for 16–19-year-olds and to help schools support the most disadvantaged pupils, taking total to almost £5 billion.
- Early Years: £150 million investment in workforce, £170 million more per year for providers, reforms to Children’s Social Care, and £300 million for new Family Hubs and the Start for Life programme.
- Keeping our country safe – providing £540 million to complete recruitment of 20,000 extra police officers by 2023, alongside cutting crime by more funding for programmes like Safer Streets Fund and County Lines.
- Delivering the next stage of our points-based immigration system, backed by £628 million, and investing £74 million to replace the Border Force fleet.
Ministry of Justice
- £500 million funding for court backlogs, completing modernising courts programme, delivering 20,000 prison places
- £200 million more annual funding to tackle reoffending, 85 per cent increase in Victims funding, 15 per cent more probation staff.
Department for Levelling Up, Housing and Communities
- Investing an additional £1.8 billion for building homes – delivering on our £10 billion housing supply commitment and unlocking 1 million new homes this Parliament, focused on brownfield development.
- Tackling rough sleeping with £640 million a year – an 85 per cent increase compared to 2019-20, to get rough sleeping numbers to the lowest in a decade.
- Confirming over £5 billion to remove unsafe cladding from the highest-risk buildings.
Department for Work and Pensions
- Over £1 billion for specialised disability employment support – to enhance opportunities into and within work.
- £6 billion Plan for Jobs: Work Coaches, Kickstart, Youth Offer, Over 50s offer, In Work Progression.
Department for Transport
- Investing over £35 billion in rail infrastructure – meeting our commitment to reverse the Beeching closures as well as providing £5.7 billion to keep essential services running.
- Investing £31 billion in roads across the Parliament – delivering over 60 upgrades and a further pipeline of over 50 local upgrades, including £2.5 billion for roads maintenance outside mayoral areas to fill millions of potholes.
- Doubling down on Net Zero – meeting our £5 billion commitment for buses, cycling and walking – tripling the size of England’s net zero emission bus fleet – and investing over £1 billion more to decarbonise transport.
- Providing £5.7 billion for City Region Sustainable Transport Settlements in eight city regions.
Department for Environment, Food and Rural Affairs
- Ensuring total farm support in England of £2.4 billion, in line with our manifesto commitment, and maintaining farm budgets in Scotland, Wales and Northern Ireland with Bew uplift.
- Providing £100 million for our UK Seafood Fund to support modernising the industry and sustainable practices.
- Supporting Net Zero with £125 million more to take Nature for Climate Fund to £725 million (trees/peat), £250 million new funding to halt biodiversity loss, improving access to green spaces including through new Community Forests and funding free food waste collections in every area from 2025.
Department for Business, Energy and Industrial Strategy
- Providing significant R&D investments of £14.2 billion in 2024-25 – including fully funding association to Horizon Europe, increasing core science budgets, and £1 billion for Innovate UK.
- Supporting Net Zero with over £15 billion investment – including £3.9 billion to decarbonise buildings.
- Investing over £1.4 billion in the British Business Bank to support the Start Up Loans scheme and providing £52.5 million for the Regional Angels Programme, and the £1.4 billion Great British Investment Fund.
Department for Culture, Media and Sport
- Upgrading digital infrastructure – with £1.2 billion for gigabit-capable broadband and an extra £180 million for the Shared Rural Network – as well as ensuring safety online with £110 million for our Online Safety regime.
- Investing £850 million in culture and heritage and a year of celebration in 2022 – supporting High Streets, renovations of museums/galleries, the 2022 Queen’s Platinum Jubilee and Commonwealth Games in Birmingham.
- Investing in sport and youth services – with £205 million for grassroots football, £22 million to refurbish more than 4,500 public tennis courts, funding our bid to host the 2030 men’s Football World Cup, Tour de France and Women’s Rugby World Cup and delivering the UEFA Women’s European Championships, and meeting our commitment to a £500 million Youth Investment Fund with 300 new/renovated youth facilities.
Ministry of Defence
- In 2020 the MOD received a multi-year settlement providing £24 billion over four years – the largest sustained increase in the Defence budget since the end of the Cold War.
Foreign, Commonwealth and Development Office
- Investing in global challenges – with £1.4 billion for girls’ education, including our largest ever contribution to the Global Partnership for Education (£430 million), and at least £2.4 billion to tackle climate change.
- Supporting global health – we will remain one of the biggest donor countries to the WHO and to Gavi by providing at least £3.6 billion, and we will meet our commitment to donate 100 million COVID-19 doses.
Department for International Trade
- Promoting inward investment in the UK – by expanding of the Office for Investment and the Global Entrepreneur Programme, as well as establishing a new Global Talent Network for science and tech, in places like Boston, Silicon Valley and Bangalore.
- Investing in export promotion services – by expanding the recently launched Trade and Investment Hubs in Scotland, Wales, Northern Ireland, and the north of England.
- A new single online portal for exports – helping us to seize the opportunities of EU exit by simplifying the exports process for smaller businesses.
- Funding the Office for Veteran’s Affairs – investing in new treatments for mental and physical health issues.