Chancellor Rishi Sunak has laid out plans to ‘level up’, restore the previous foreign aid budget in his budget announcement to the House of Commons this afternoon.
The deputy speaker addressed the consistent government briefing of budget features to press ahead of the announcement, saying that. “Important policy announcements should be made first to parliament. I should put on record my support to Mr Speaker’s stance on this issue,” echoing the Speaker Sir Lindsay Hoyle’s comments on the matter earlier this week.
The Chancellor began by claiming that: “Today’s budget delivers a stronger economy for the British people… stronger public finances… stronger employment. Growth up, jobs up, debt down,” saying that government plans would remedy the fact that “for too long the location of your birth has determined too much of your future.”
He said that supply chain and inflation issues cannot be solved “overnight,” and echoed recent reports claiming that inflation will soon reach 4%.
However he claimed that “Our recovery [will] be quicker”, referring to the news that UK GDP growth has been revised from 4 to 6.5% for 2021.
He promised that the UK’s foreign aid budget would return to 0.7% of GDP, prior to the next general election.
Green Party MP Caroline Lucas has already issued her concerns over this timeframe via Twitter, writing that the “shameful” cut must be reinstated now.
He said the government was “investing more in housing and home ownership, including “£5bn to remove unsafe cladding.”
He then circled back to the levelling up agenda, saying that: “Tonnes and tonnes of numbers on small scale projects being thrown out” which “will benefit the whole of the United Kingdom.”
He said tax reliefs will be doubled for theatres, museums, orchestras, galleries up to April 2023.
Indeed, the £150 billion increase in departmental spending – a 3.8% a year real increase – is a marked difference from previous Conservative governments.
He said that: “An economy built on innovation must be open to the best and brightest minds,” announcing a £1.4 billion investment fund to promote investment alongside a new “scale-up “visa that will make it easier for businesses to bring in “highly skilled individuals”.
Sunak slammed Labour’s proposals to slash business rates, saying to do so would be irresponsible as they raise £25 billion in tax.
However he said the rates would be evaluated every three years, and that a new investment relief scheme willne introduced to encourage investment in green technologies.
He did however say there will be a one-year cut of 50% for hospitality and leisure firms, which will reduce business rates by £7 billion.
He also confirmed that the planned hike in fuel duty would be scrapped, and that a cut to air passenger duty rates for people flying within the UK would come into force from April 2023, a move that could spark backlash from green campaigner in and outside government, especially ahead of the COP26 climate summit set to kick off in Glasgow on Sunday.
Changes to tax on alcohol were also announced, with lower strength drinks set to be cheaper, while higher strength ones will be made more expensive.
Earlier in his address, Sunak emphasised that his plans represented the biggest spending in a decade. He then decided to change tact by criticising the role of big government, saying: “But now we have a choice. Do we want to live in a country where the response to every question is, “What is the government going to do about it?”, adding: “Or do we choose to recognise that government has limits, government should have limits.”
He went on to fulfil this morning’s press speculation that the government would cut the taper rate, saying that it will be slashed by 8 per cent from next April.
He said the change would mean a single mother of two working full time on the national living wage and renting a home, will be better off by around £1,200.
The Chancellor concluded by saying the budget would be responsible for pay rise for 2 million people and a £2 billion tax cut for the lowest paid.
Responding to the Budget, Liberal Democrat Treasury Spokesperson, Christine Jardine MP accused Sunak of being “out of touch with the British people,” saying: “Today the Chancellor missed the chance to avoid a cost of living crisis which will cause sleepless nights for families up and down the country.
“People who work hard, pay their taxes and play by the rules needed support. Instead, the Chancellor could only offer tax hikes, benefit cuts and no answer to energy bills skyrocketing by the day.
“The greatest betrayal of this budget is the woeful lack of action to help our children recover from the pandemic. All the Chancellor could scrape together was a miserable pound a day for our children to catch-up after months of being locked out of classrooms.
“The Chancellor spent more today on cutting the price of a prosecco than saving our children’s futures. This tells you everything you need to know about the Government’s priorities.
“Under this Chancellor, we have the highest tax burden since the Second World War, but the lowest school spending per pupil in a generation.”