On 27 October, Chancellor Rishi Sunak delivered his Autumn Budget Statement and Spending Review (SR21) to Parliament. Ahead of the statement, economic recovery and funding those efforts has been the focus of the government after the coronavirus pandemic ravaged the country for over a year. Now that emergency support is winding down, the budget set out to clarify the government’s plans for the foreseeable future.
This does not constitute advice and advice should be sought in all instances before acting on it.
Here are the key takeaways from the Autumn Budget speech.
Growth
- Annual growth for the UK economy is set to increase by 6.5% in 2021, followed by growth of 6.0% and 2.1% in 2022 and 2023 respectively
- The Office for Budget Responsibility (OBR) predicts that the UK economy will return to its pre-pandemic size around the turn of the year, earlier than mid-2022 as previously expected
Inflation
- The Consumer Prices Index (CPI) increased by 3.1% in the 12 months to September, compared to a low of 0.4% in February 2021
- The OBR expects inflation to remain elevated over the next two years
- Inflation is expected to rise further to 4.4% in Q2 2022 before returning to target by the end of 2024
Health and Social Care
- Spending on healthcare to increase by £44 billion to over £177 billion by the end of this Parliament
- In a pre-Budget announcement, an additional £5.9 billion will go to the NHS to tackle the backlog in care following the COVID-19 pandemic – with investment in diagnostic services, surgical hubs and boosting bed capacity
- The health budget is set to be the largest since 2010, with investment in research and development, better screening, 40 new hospitals and 70 hospital upgrades among other improvements
- Plans for 50,000 more nurses and 50 million more primary care appointments
- Extra revenue from the Health and Social Care Levy to go towards the NHS and social care
- £4.8 billion for local government over the next three years for social care
Housing
- An additional £1.8 billion was invested to meet the government’s commitment to the £10 billion investment in housing supply and to help unlock over 1 million new homes
- Reconfirmation of an £11.5 billion investment through the Affordable Homes Programme (running from 2021 to 2026)
Business
- In an effort to support companies, changes are to be made to business rates, including a new 12-month relief for firms to invest in their physical locations
- Bank surcharge cut from 8% to 3%
- Investment incentives announced worth £750 million
It should come as no surprise that the Budget focused on ‘post-COVID’ plans, but Sunak was keen to stress that the government is aware that the battle with COVID is not over. The chancellor stressed that taxpayers’ money will be put towards initiatives that aim to make a difference in people’s lives: creating high-wage and high-skilled jobs, reducing NHS waiting lists, putting more police on the streets, upgrading roads, and railways, and building new homes, hospitals and schools.
What does the Autumn Budget 2021 mean for you?
If you have any questions or concerns about how the announcements from the Budget might affect you, get in touch with us today.
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