Budget 2021: Sunak declares ‘our plan is working’

Chancellor Rishi Sunak today shared details of the budget for 2021, where he revealed positive moves since the coronavirus pandemic erupted.

He noted that today’s budget delivers a “stronger economy for the British people”, with stronger employment and “fewer people out of work and more people in work”.

Sunak shared that the government’s proposal to protect jobs has proven successful as he declared: “Our plan is working.”

Inflation is set to average more than four percent for next year Sunak explained, with the economy set to return to pre-Covid levels by the end of 2021.

He also outlined that the Office for Budget Responsibility (OBR) predicts the recovery for the UK economy to be far quicker than originally forecast. This is forecast to be 6.5% this year, followed by six percent in 2022.

Similarly, the OBR expects unemployment to peak at 5.2%, where there will be “over two million fewer people out of work than previously feared”.

But he pointed out that there are “challenging months ahead”. To tackle this, Sunak outlined how the 2021 budget would support this.

Social care support

Health spending is set to increase by £44bn, to over £177bn, and Sunak stated that social care will get the biggest increase in this budget for over a decade.

Action on pensions

Moves to relax the regulatory charge cap for big pensions schemes were outlined, which could help to unlock some of the £2.2tn which is currently off limits to higher-risk, start-up firms.

International talent

Sunak shared details of a new scale-up visa which will make it easier for businesses to recruit talent from across the world.

He said the government will “make our visa system for international talent the most competitive in the world”.

Plan for jobs

While the government has put in place various support measures to improve job prospects, such as the Kickstarter scheme, Sunak said that “we need to go further”.

He said that providing a world class education is critical, which can lead to higher productivity and higher wages.

He stated that the government will be increasing skills spending by £3.8bn.

In addition, a new scheme called Multiply will focus on boosting numeracy skills among workers.

Corporation tax

Sunak confirmed that corporation tax is going up, which will see the £1m annual investment allowance to be extended to March 2023, instead of ending in December 2021.

However, he noted that the bank surcharge will be slashed.

Changes to business rates

Regards business rates the chancellor outlined plans to make them fairer and timelier.

A new relief will be introduced to encourage businesses to adopt greener technology, and the government will also introduce a new relief from 2023 where every business will be able to make property improvements and pay no extra fees for 12 months.

Sharing this news on Twitter, Sunak said: “Together with the new green relief these investment incentives total £750m.”

Plus, a 50% business rates discount for hospitality and leisure sectors will also be available.

Sunak said that these plans will slash business rates by £7bn.

National Living Wage

The chancellor confirmed the rise to the National Living Wage. He stated it will be increased to £9.50 an hour, a pay rise worth over a £1,000.

Sunak added that it will “benefit two million of the lowest paid workers in the country”.

Universal Credit

Finally, Sunak addressed Universal Credit, branding it “a tax on working people”.

He shared that he has decided to cut this rate “not by one percent, not by two percent, but by eight percent”, cutting it from 63% to 55%.

The chancellor said that this is a tax cut worth over £2bn.

Noting that changes like this are normally put in place in the new tax year in the month of April, he said: “We want to help people right now so we will introduce this within weeks and no later than December 1.”