The Budget and Spending Review

Playing catch up as I missed the Budget Spending Review while excitedly looking at electric cars to hire in Bude (of which more to come), so I’m now trawling through the stuff. Seems to be a big spending budget – I’ve not yet worked out where the income comes from.

So, Chancellor, Rishi Sunak, seems to feel that employment is up, investment is growing, public services are improving, the public finances are stabilising and wages are rising. To be fair, if all this wasn’t happening at this point in life during Covid, there would be real cause for concern – and he also has to say all that, doesn’t he, so let’s hope he’s right.

Getting beyond the rhetoric and ‘levelling up’ phrases, what does it mean for ordinary people living in Bude – and beyond?

Well, the Chancellor did make the point that Covid is not yet over, and we have challenging months ahead. He encouraged everyone to get their booster jabs asap while he also prepares for a post-Covid world.

Another challenge is global inflation which is expected to further rise (to 4.4%) over the coming year, and makes the pound in people’s pocket worth less. A surge in demand for global energy has certainly not helped. We all recall recent fuel queues, too and price rises.

He has therefore decided extending the HGV levy extension for a further year until 2023, while also freezing Vehicle Excise Duty for heavy goods vehicles.

There is a lot of it to read and you can enjoy the whole speech here. Lots of investment for towns and cities, especially in the north, is mentioned, as part of the levelling up agenda. It is mainly aimed at redwall seats, though £11.5 billion is set aside to build new affordable homes and schools will get an extra £4.7billion (by 2025) with with just under £2billion of new funding to help schools and colleges to recover from the pandemic. Meanwhile, £48m will pay for three new ships to travel between the mainland and the islands of Scilly in Cornwall.

 

Stuff which may affect us here …

 

Life

  • An increase in fuel duty will be cancelled (thank goodness because prices are extremely high already at the moment).
  • The  national living wage will increase from £8.91 to £9.50 an hour from next April.

 

Alcohol – there is something for the pubs here …

  • The UK’s main duty rates on alcohol will be simplified; the higher the strength, the greater the tax.
  • Pubs and bars will benefit from a new “draught relief” cutting duty on beer and cider sold in pubs.
  • The cost of a pint will be cut by 3p.
  • There will be a small brewers’ relief, for beer and cider makers.

 

Taxes/pay –

  • He will cut the taper rate in universal credit from 63p to 55p.
  • The work allowance will be increased by £500.
  • A 50% business rates discount for the retail, hospitality, and leisure sectors in England in 2022-23 will be introduced, up to a maximum of £110,000
  • National Living Wage change is a 6.6pc rise, or an increase of £1,000 a year for a full-time worker, and public sector workers will also benefit from pay rises following a freeze during the pandemic.

 

Air Travel –

  • Flights between UK airports  will be subject to a new lower rate of Air Passenger Duty from April 2022, with financial support for English airports to be extended for a further six months. However, there will be a new ultra-long haul in air passenger duty, covering flights of over 5,500 miles.

There are critics, for example, Anna Taylor, Executive Director, of the Food Foundation said about the stuff I’d missed at first glance:

 

“Today’s announcement that the Holiday Activities and Food Programme will continue to be funded shows that the Government recognise the importance of providing vulnerable children with nutritious food during the school holidays. Provision of holiday clubs through the programme has provided a vital lifeline during the financially challenging school holiday periods for many families this year, supporting children’s learning and development and preventing them from falling behind their peers.

 

However, this alone will not be enough to prevent child food insecurity.  It is worrying that the Government has not chosen to extend eligibility for the scheme, or to expand the number of children that are eligible for Free School Meals and Healthy Start vouchers.  There are still far too many children not benefiting from the safety net that these targeted schemes should be providing. Nearly 50% of children experiencing food insecurity in England are still not eligible for Free School Meals or holiday clubs.  A basic level of adequate, nutritious food for the most at-risk children is not a big ask, and would help ensure that spending on education goes further by helping disadvantaged children learn better and protecting their long-term health.

 

Families are facing a difficult winter with the £20 cut to Universal Credit, growing food and fuel prices and the forthcoming rise in National Insurance.  The wider measures announced today – increasing minimum wage levels from April 2022 and removing the freeze on public sector pay – are very welcome, but will not go far enough, and do little to help those on Universal Credit or to provide essential support for families this winter.“

On transport and fuel duty, the RAC said:

“We welcome the Chancellor’s confirmation that duty will continue to remain frozen at 57.95p a litre. With pump prices at record highs, now would have been the worst possible time to change tack and hike up costs still further at the forecourt. If duty had gone up, RAC data suggests the average price of a litre of petrol could have reached 147p taking the cost of a tank to over £80, and diesel an eye-watering 150p.

“But we’re disappointed he did not provide some respite for drivers at the pumps. As VAT is charged on the final cost at the pumps, a temporary cut in VAT to motor fuels would have benefited drivers immediately at time when filling up the car is hurting household budgets more than ever before as well as the wider economy as people will have less money to spend.”

 

 

 

 

 

 

 

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