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While warning of some “challenging months” ahead with inflation expected to rise, the Indian-origin minister unveiled an extra GBP 150 billion investment as part of the Budget and Spending Review.
A new temporary business rates relief for the hospitality industry, a freeze on fuel and alcohol duties and increasing the country’s National Living Wage to GBP 9.50 from April 2022, were among some of the key announcements.
“Today’s Budget delivers a stronger economy for the British people: stronger growth, with the UK economy recovering faster than our major competitors,” said Sunak.
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Sunak, in charge of the UK’s economic response to the COVID-19 pandemic, said the Budget was designed to create jobs, improve skills, tackle health service backlogs, put more police on the streets, and build new homes, hospitals, and schools.
The UK Treasury said its latest figures show that the economy is on track to reach pre-pandemic levels by early next year, with unemployment peaking at less than half what was initially predicted.
Among some of the measures expected to prove popular include an end to a duty premium on sparkling wines and a cut in the cost of a pint of beer of 3 pence.
“Over the last decade, consumption of sparkling wines like prosecco has doubled. English sparkling wine alone has increased almost tenfold. It’s clear they are no longer the preserve of wealthy elites,” noted Sunak, himself a teetotaller.
“And they’re no stronger than still wines. So, I’m going to end the irrational duty premium of 28 per cent that they currently pay. Sparkling wines – wherever they are produced – will now pay the same duty as still wines of equivalent strength,” he said.
Sunak announced GBP 5.9 billion to tackle the National Health Service (NHS) backlog of non-emergency tests and procedures, modernise digital technology and ensure there are at least 100 community diagnostic centres to help people across England get health checks, scans and tests closer to their homes.
To support pupils and teachers, he announced an additional GBP 4.7 billion invested in the core schools budget in England. To boost wages, skills funding will increase by a total over the Parliament of GBP 3.8 billion compared to 2019-20. And, for parents, he said GBP 302 million will fund new early years programmes including bespoke breastfeeding services and parent-infant mental support, and funding to rollout Family Hubs across England.
Sunak said: “The evidence is compelling that the first 1,001 days of a child’s life are the most important.
“We’re confirming GBP 150mn to support training and development for the entire early years workforce. To help up to 300,000 more families facing multiple needs, we’re investing an extra GBP 200mn in the Supporting Families programme. And we will provide over GBP 200mn a year to continue the holiday activity and food programme.” The Opposition Labour Party, represented by Shadow Chancellor Rachel Reeves in place of party Leader Keir Starmer who is self-isolating after testing positive for COVID-19, responded to the Budget as asking British people “to pay so much for so little”.
With reference to the duty cut on sparkling wines and air passenger duty on domestic flights, Reeves shot back: “At least the bankers on short haul flights sipping champagne will be cheering today.
”Never has a Chancellor asked the British people to pay so much for so little. This country deserves better.” The Opposition welcomed the increase in the minimum wage but said the government needed to go ”further and faster” and should have moved to a rise of at least GBP 10 an hour.