A Peek Inside the Red Box: What's in Rishi Sunak's Autumn Budget?
15:41 GMT 26.10.2021 (Updated: 15:24 GMT 28.05.2023)
© REUTERS / TOBY MELVILLE / Conservative Party Conference in Manchester
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Wednesday's budget speech is already looking like an anti-climax after Chancellor of the Exchequer Rishi Sunak and his department trailed large parts of it in the media — angering MPs on both sides of the House of Commons and speaker Sir Lindsay Hoyle.
With much of the autumn budget already out of the red despatch box, what can we expect in Wednesday's speech?
Conservative Chancellor Rishi Sunak is set to unveil his spending plans in the House of Commons on Wednesday. But the debate has already kicked off after many details were leaked.
Public-Sector Pay Unfrozen
Sunak's latest revelation on Sunday night was that the pay freeze for public-sector workers, imposed last November in response to the economic recession caused by the COVID-19 pandemic, would finally be lifted.
"The economic impact and uncertainty of the virus meant we had to take the difficult decision to pause public sector pay," the chancellor said. "And now, with the economy firmly back on track, it's right that nurses, teachers and all the other public sector workers who played their part during the pandemic see their wages rise."
Health Secretary Sajid Javid announced a three per cent pay offer for National Health Service nurses in July, in line with the independent pay body's recommendation.
Sunak had originally budgeted in March for a meagre one per cent rise — lower than the rising inflation rate. Nursing trade unions have demanded 15 per cent to redress the decade-long pay stagnation caused by the original pay freeze slapped on them by former Prime Minister David Cameron as part of post-Credit Crunch austerity cuts.
Minimum Wage Hike
Earlier on Monday it emerged that the National Living wage — the minimum pay rate for workers aged 23 and over — would be raised from £8.91 an hour to £9.50.
Apprentices and 21-22-year-olds will also see proportionately larger rise in their minimum wage, but there was no mention of the 16-17 and 18-20 groups.
Shadow chancellor Rachel Reeves attacked the Tory government for moving the country a big step closer implementing the Labour Party's own promise of raising the rate to £10 per hour if it wins the next election.
This works out at £1,000/year less than Labour’s existing plans for at least £10 an hour for people working full-time.
— Rachel Reeves (@RachelReevesMP) October 25, 2021
Much of it will be swallowed up by Tory tax rises, UC cut & energy bill failures.
Only Labour is serious about improving work and pay.https://t.co/fVMyHTyxMu
No Cut in VAT on Household Bills
Sunak has also ruled out Labour's demand for a cut in Value-Added Tax (VAT) on household heating fuel and electricity supplies.
VAT is currently charged at a whopping 20 per cent, a legacy of the UK's membership of the European Union. But while the Brexit transition period ended in January, the Treasury has yet to lower the rate.
However, Business Secretary Kwasi Kwarteng has insisted that energy regulator Ofgem's price cap on household bills will not be reviewed and will run its course until April.
Duty on petrol and diesel will remain frozen however, although prices at the pumps have risen to record levels in the wake of a bout of panic-buying in September prompted by complaints from the Road Haulage Association of a post-Brexit shortage of drivers.
From £3Bln on ‘Skills Revolution' to £5bn on Health Research, Sunak Previews Budget Spending Pledges
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'The Right Thing'
On Monday, Parliamentary Speaker Sir Lindsay Hoyle suggested the chancellor should resign over leaks of budget details to the media.
"At one time ministers did the right thing if they breached before a budget — they walked — absolutely, they resigned," Hoyle said.
On Tuesday Treasury Minister Simon Clarke turned up at the House of Commons in Sunak's place after Hoyle ordered his boss to answer questions on the budget and the leaks.
Veteran Tory backbencher Sir Desmond Swayne also took Clarke to task over the unreleased cost of a fourth "Plan B" COVID-19 lockdown.
"Why was the leaked information about the costs, the substantial costs of winter Plan B, marked not for publication?" Swayne asked. "What is the Government trying to hide? Why is it frightened of our scrutiny?"
Levelling-Up
Clarke teased another detail from the budget, saying that while the rabbit was already out of the hat, another "fluffy bunny" could be "a huge announcement about the Government's levelling up fund".
Sunak has already promised £7 billion for public transport in cities outside the capital as part of the regional levelling-up agenda, although he was forced to admit that the figure included sums promised months earlier.
He has also pledged £3 billion for a "skills revolution" to help move to a higher-wage post-Brexit economy.
