Alcohol, fuel and tax: Key announcements from the budget

Published

4 years ago

October 27, 2021

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Here are the key points from Chancellor Rishi Sunak’s budget speech:

• The chancellor says there are “challenging” months ahead, adding that inflation in September was 3.1% and is likely to rise further – the OBR expect it to average 4% over the next year

• Pressures caused by supply chains and energy crisis will “take months to ease”.

• Economy to return to its pre-COVID level at the turn of the year – an improvement on OBR forecasts revealed in March

• Economy expected to grow by 6% in 2022, and 2.1%, 1.3% and 1.6% over the next three years

• In July last year, at the height of the pandemic, unemployment was expected to peak at 12% but the OBR now expect it to peak at 5.2%

• Compared to 2020, wages have grown by 3.4%

• Underlying debt is forecast to be 85.2% of GDP this year

• It will reach 85.4% in 2022-23, before peaking at 85.7% in 2023-24

• It then falls in the final three years of the forecast from 85.1% to 83.3%

• Total departmental spending over this parliament will increase by £150bn, growing by 3.8% a year in real terms

• Spending on healthcare to increase by £44bn to over £177bn by the end of this parliament

• Extra revenue from health and social care levy will go towards NHS and social care as promised

• Health budget will be the largest since 2010, with record investment in research and development, better screening, 40 new hospitals and 70 hospital upgrades

• Mr Sunak says the budget funds an ambition to recruit 20,000 new police officers

• Extra £2.2bn for courts, prisons and probation services, including £500m to reduce the backlog in courts

• Programmes to tackle neighbourhood crime, reoffending, county lines crimes, violence against women and girls, victims’ services, and improved response to rape allegations

• £3.8bn for the “largest prison-building programme in a generation”

• £11.5bn to build up to 180,000 affordable home – 20% more than the previous programme

• £1.8bn to bring 1,500 hectares of brownfield land into use

• £640m a year to help those who are rough sleepers and homeless

• £5bn to remove unsafe cladding from the highest risk buildings, partly funded by a residential property developers’ tax, which will be levied on developers with profits over £25m at the rate of 4%

• £21bn for roads as part of a larger investment in transport

• £2.6bn for upgrades of over 50 local roads

• More than £5bn for road maintenance – enough to fill one million more potholes a year

• More than £5bn for buses, cycling and walking improvements

• HGV levy (previously suspended until August) will now be suspended until 2023

• Vehicle excise duty for heavy goods vehicles to be frozen

• Funding to improve lorry park facilities

• £46bn investment in railways, with an integrated rail plan to be published soon

• £5.7bn for London-style transport settlements in Greater Manchester, Liverpool City Region, Tees Valley, South Yorkshire, West Yorkshire, West Midlands, West of England

• £300m for parenting programmes for families, tailored services to help with perinatal mental health

• £150m to support training and development for early years workforce

• £200m for Supporting Families programme which helps families with varied needs

• Over £200m to continue the holiday activity and food programme

• £560m for youth services – enough to fund up to 300 youth clubs in England

• More than £200m to build or transform up to 8,000 community football pitches in the UK

• £2bn new funding to help schools and colleges, bringing total support (some already announced) to almost £5bn

• Restoring per pupil funding to 2010 levels in real terms, equivalent to a cash increase for every pupil of more than £1,500

• 30,000 new school places for children with special needs and disabilities

• New 50% business rates discount for businesses in the retail, hospitality and leisure sectors, including pubs, music venues, cinemas, restaurants, hotels, theatres, and gyms

• This will mean any eligible business can claim a discount up to a maximum of £110,000 – a tax cut worth almost £1.7bn

• Mr Sunak says that, together with small business rates relief, this means more than 90% of all businesses in these sectors will see a discount of at least 50%

• An overhaul of alcohol duty, cutting the number of main duty rates from 15 to six – the stronger the drink, the higher the rate

• Small producer relief will extend the principle of small brewers’ relief to small cidermakers and others making alcoholic drinks of less than 8.5% ABV

• Sparkling wines will pay the same duty as still wines of equivalent strength, rather than the 28% they currently pay. Duty will also be cut for fruit cider

• Planned rise in fuel duty will be cancelled, meaning that – after 12 consecutive years of frozen rates, the average car driver will save a total of £1,900

• National living wage to increase next year by 6.6% to £9.50 an hour. For a full time worker, that’s a pay rise worth over £1,000

• This move will help more than two million of the lowest-paid workers, Mr Sunak says

• Mr Sunak says his goal is to reduce taxes and the universal credit taper, which reduces financial support as people work more hours, is in his sights

• The rate is currently 63%, so for every extra £1 someone earns, their universal credit is reduced by 63p. Mr Sunak announces plans to cut this by 8 percentage points (from 63% to 55%). This will come into effect “within weeks”

• Work allowances being increased by £500 – combined with the change to the taper, this is a tax cut worth more than £2bn, he says. Nearly two million families will keep, on average, an extra £1,000 a year

Business

UK economy grows more than expected, according to official figures

Published

5 hours ago

May 15, 2025

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UK economy grows more than expected, according to official figures

The UK economy showed strong growth in the first three months of the year, according to official figures.

Gross domestic product (GDP) – the standard measure of an economy’s value – grew 0.7% in the first quarter of 2025, the Office for National Statistics said.

The rise is better than expected. An increase of just 0.6% was anticipated by economists polled by the Reuters news agency.

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It’s significantly better than the three months previous, in which a slight economic expansion of just 0.1% was reported for the final quarter of 2024.

The ONS also said there was a small amount of growth last month, as GDP expanded 0.2% in March, which similarly beat expectations.

No growth at all had been forecast for the month.

How did the economy grow?

A large contribution to high GDP growth was an increase in output in the production sector, which rose 1.1%, driven by manufacturing and a 4% increase in water supply, the ONS said.

Also working to push up the GDP figure was 0.7% growth in the biggest part of the UK economy – the services industry.

Wholesale, retail and computer programming services all performed well in the quarter, as did car leasing and advertising, the ONS said.

It shows the economy was resilient, as the country headed into the global trade war sparked by President Trump’s so-called ‘liberation day’ tariff announcement on 2 April.

Welcome political news, for now

The data is welcome news for a government who have identified growing the economy as its number one priority.

Chancellor Rachel Reeves is taking the figures as a political win, saying the UK economy has grown faster than the US, Canada, France, Italy and Germany.

“Today’s growth figures show the strength and potential of the UK economy, ” she said.

“Up against a backdrop of global uncertainty, we are making the right choices now in the national interest.”

Such GDP numbers may not continue into April as businesses and consumers were hit with a raft of bill rises, and Mr Trump’s tariffs fired the starting gun on a global trade war.

Last month, water, energy and council tax bills rose across the country while employers faced higher wage costs from the rise in their national insurance contributions and the minimum wage.

But above-inflation wage growth and fading consumer caution could continue to boost the economy.

Business

Foreign states face 15% newspaper ownership limit amid Telegraph row

Published

22 hours ago

May 14, 2025

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Foreign states face 15% newspaper ownership limit amid Telegraph row

Foreign state investors would be allowed to hold stakes of up to 15% in British national newspapers, ministers are set to announce amid a two-year battle to resolve an impasse over The Daily Telegraph’s ownership.

Sky News has learnt that the Department for Culture, Media and Sport could announce as soon as Thursday that the new limit is to be imposed following a consultation lasting several months.

The decision to set the ownership threshold at 15% follows an intensive lobbying campaign by newspaper industry executives concerned that a permanent outright ban could cut off a vital source of funding to an already-embattled industry.

It would mean that RedBird IMI, the Abu Dhabi state-backed fund which owns an option to take full ownership of the Telegraph titles, would be able to play a role in the newspapers’ future.

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RedBird Capital, the US-based fund, has already said it is exploring the possibility of taking full control of the Telegraph, while IMI would have – if the status quo had been maintained – forced to relinquish any involvement in the right-leaning broadsheets.

One industry source said they had been told to expect a statement from Lisa Nandy, the culture secretary, or another DCMS minister, this week, with the amendment potentially being made in the form of a statutory instrument.

Other than RedBird, a number of suitors for the Telegraph have expressed interest but struggled to raise the funding for a deal.

The most notable of these has been Dovid Efune, owner of The New York Sun, who has been trying for months to raise the £550m sought by RedBird IMI to recoup its outlay.

Another potential offer from Todd Boehly, the Chelsea Football Club co-owner, and media tycoon David Montgomery, has yet to materialise.

RedBird IMI paid £600m in 2023 to acquire a call option that was intended to convert into ownership of the Telegraph newspapers and The Spectator magazine.

That objective was thwarted by a change in media ownership laws – which banned any form of foreign state ownership – amid an outcry from parliamentarians.

The Spectator was then sold last year for £100m to Sir Paul Marshall, the hedge fund billionaire, who has installed Lord Gove, the former cabinet minister, as its editor.

The UAE-based IMI, which is controlled by the UAE’s deputy prime minister and ultimate owner of Manchester City Football Club, Sheikh Mansour bin Zayed Al Nahyan, extended a further £600m to the Barclays to pay off a loan owed to Lloyds Banking Group, with the balance secured against other family-controlled assets.

Other bidders for the Telegraph had included Lord Saatchi, the former advertising mogul, who offered £350m, while Lord Rothermere, the Daily Mail proprietor, pulled out of the bidding last summer amid concerns that he would be blocked on competition grounds.

The Telegraph’s ownership had been left in limbo by a decision taken by Lloyds Banking Group, the principal lender to the Barclay family, to force some of the newspapers’ related corporate entities into a form of insolvency proceedings.

The newspaper auction is being run by Raine Group and Robey Warshaw.

The DCMS declined to comment.

Business

Burberry to cut 1,700 jobs after multi-million pound loss

Published

1 day ago

May 14, 2025

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Burberry to cut 1,700 jobs after multi-million pound loss

Burberry, the UK’s only global luxury brand, is to cut around 1,700 jobs worldwide over the next two years after reporting a steep financial loss.

The company lost £66m in pre-tax profit in the year ended in March as luxury goods sales fell across the world and the company weathered an “uncertain” environment and a “difficult macroeconomic backdrop”.

A year earlier, it recorded £383m in profit.

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It’s suffered in recent years with the share price falling to such an extent the business was removed from the FTSE 100, the index of most valuable companies listed on the London Stock Exchange.

Despite the financial performance, the company was upbeat, with chief executive Joshua Schulman saying “I am more optimistic than ever that Burberry’s best days are ahead and that we will deliver sustainable profitable growth over time”.

What cuts are being made?

The retailer did not specify any shop closures – in the past year, it closed 26 and also opened 26 stores – but did highlight shift cuts and consolidations.

“We don’t have a store closing programme, per see,” Mr Schulman told investors

The night shift at Burberry’s Castleford factory will be cut, it proposed, saying the shift has resulted in overproduction.

“Significant” investment in the facility will be made, however, as the ambition is to scale up British production “over time”, Mr Schulman said.

Changes to the retail network across the world will be made with shop staff being scheduled around “peak traffic”.

Burberry will be “realigning” shop staff, he said, “so that we can offer the best service” at the busiest times.

There will also be a “simplification” of Burberry’s regional structure and a “rebalancing” of central and regional responsibilities to reduce duplication and “accelerate decision making” through the retail network.

But the majority of changes will be made to “office space teams” around the world, the CEO said.

Commercial and creative teams have already been consolidated, Burberry’s annual results said.

What’s gone wrong?

Aside from the global slowdown in luxury goods sales over recession fears, additional headwinds have come in the form of President Trump’s tariffs.

“Clearly, the external environment has become more challenging since mid-February”, Mr Schulman told investors.

Tariff risks were higher than first planned, the annual results said.

It led the US market to be described by Mr Schulman as “choppy” since February when Mr Trump began announcing tariffs on Mexico, Canada and China, as well as on goods such as steel and cars.

Sales also fell in the Asia Pacific region by 16%, the results showed.

Criticism was levelled at the 2021 British government decision to withdraw VAT refunds for overseas visitors, “which has made the UK the least competitive destination in Europe for tourist shopping”, the results read.

“Business in our UK home market continues to be seriously impacted” by the move.