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Rishi Sunak has begun setting out his plans to create an economy “fit for a new age of optimism” – revealing measures to boost wages, skills and productivity as the UK recovers from the Covid crisis.The chancellor was under pressure to ease the cost-of-living concerns of families facing rising bills, ease the burden on struggling businesses, and provide much-needed investment in the NHS and public services.So what has Mr Sunak offered in his autumn Budget and spending review? The Independent takes a look at the key announcements.Universal CreditMr Sunak announced measures to help Universal Credit claimants by allowing them to keep more of the benefit as they earn more. The “taper rate” – the amount of benefit taken away for every £1 earned above the claimant’s work allowance – will be reduced from 63p to 55p.The chancellor claimed it amounted to a “£2bn tax cut” for low-income families, and promised the changes would come into force within weeks.While this will ease the burden on claimants who are in work, it does not compensate for the £20-a-week cut the government made earlier this month (worth £6bn), or do anything to help people who are not in work.Air passenger dutyFlights between airports in England, Scotland, Wales and Northern Ireland will be subject to a new lower rate of air passenger duty from April next year – sparking criticism from climate campaigners hoping for measures that would help to reduce aviation emissions.However, a new “ultra-long-haul band” covering flights of over 5,500 miles means long-haul flyers will pay slightly more. “Less than 5% of passengers will pay more – but those who fly furthest will pay the most,” Mr Sunak said.Fuel dutyMr Sunak said the planned fuel duty rise would be cancelled – so it will remain frozen at 57.95p a litre until next year. “With fuel prices at the highest level in eight years, I’m not prepared to add to the squeeze on families and small businesses,” said Mr Sunak.Business ratesMr Sunak announced some changes to business rates. A new 50 per cent business rates discount will apply in the retail, hospitality, and leisure sectors, with eligible businesses able to claim a discount on their bills, up to a maximum of £110,000.There will also be more frequent revaluations every three years from 2023, a 12-month rate holiday on property improvements, and relief for business owners who install solar panels.It falls short of the across-the-board cut to business rates that many Tory MPs had been looking for, while Labour has called for a complete overhaul of the system.Alcohol DutyA planned increase in duty on spirits, beer and wines will be cancelled, said Mr Sunak – claiming it amounts to a £3bn tax cut for the hospitality industry. The chancellor said a 5 per cent cut in tax on pints pulled in pubs would reduce the cost of a pint by 3p.Mr Sunak said he would simplify the system of alcohol duties from 15 duty rates to just six – promising lower rates for lower-strength drinks such as rose, fruit ciders, and lower-strength beers. But he said some higher-strength drinks would see higher rates. “The stronger the drink, the higher the rate,” he said.EducationMr Sunak has promised an extra £4.7bn for England’s schools by 2024-25, saying just under £2bn of the new funding would go to help schools and colleges recover from the pandemic.The chancellor said that the government’s funding plans would mean spending for each pupil would finally return to 2010 levels, and also announced an extra £200m to continue the holiday activities scheme.Minimum wage and public sector payThe chancellor announced ahead of the Budget that he had accepted a recommendation from the Low Pay Commission to increase the national living wage from £8.91 to £9.50 an hour for workers aged 23 and over.Mr Sunak also ended the year-long public sector pay freeze, but did not reveal whether the pay rises would be above inflation (currently 3.1 per cent). He claimed there would be “fair and affordable pay rises” – but said it would be up to pay-review bodies to decide on the amounts.Every Whitehall department will receive a “real terms rise in overall spending” as part of the spending review, the chancellor said, amounting to £150bn over the course of this parliament.NHS fundingIn another pre-Budget announcement, an additional £5.9bn will go to the NHS to tackle the huge backlog in care following the Covid crisis – with investment in diagnostic services, surgical hubs, and boosting bed capacity.Although £3.8bn of the extra spending will be aimed directly at getting the health service “back on track”, some £2.1bn will go on “digitising” the NHS – as the government attempts to push the health service into an efficiency drive.TransportThe government has topped up a pledge to increase funding for trams, trains, buses and cycleways in a bid to improve local transport across England.But only a small share of the £7bn for transport touted by the Treasury before the Budget is new money – only around £1.5bn is additional funding, with most of the sum being accounted for in previous commitments.HousingBig construction companies will be charged an extra levy to raise a £5bn fund to remove unsafe cladding from highrise buildings. Developers with profits over £25m will be charged a rate of 4 per cent.The chancellor also announced £11.5bn to build up to 180,000 affordable homes, and an extra £1.8bn to bring 1,500 hectares of brownfield land into use.But James Forrester, managing director of estate agent Barrows and Forrester, accused the chancellor of “recycling” old commitments.Levelling up agendaThe chancellor announced he was allocating £1.7bn of funding from the Levelling Up Fund for over 100 local areas, including disadvantaged communities in the north of England and the Midlands.Rejecting Labour claims of “pork-barrel politics” for Tory-held seats, Mr Sunak said the money would go to Labour constituencies. “We’re so committed to levelling up we’re even levelling up the opposition front bench,” he said.Meanwhile, devolved administrations will be given the “largest block grants” since 1998, he added, with an increase to Scottish government funding in each year by an average of £4.6bn, along with £2.5bn for the Welsh government and £1.6bn for the Northern Ireland executive.Local government and council taxMr Sunak’s Budget provides English councils with £1.6bn of new grant funding in each of the next three years, on top of previous funding to implement social care reform plans.But the Office of Budget Review (OBR)’s assessment makes clear that the government expects big council tax rises ahead. The body said it expects council tax receipts to be £12.1bn above last year’s level by 2026-27 – largely thanks to the push to boost social care.The Budget also gives police and crime commissioners in England the “flexibility” to raise council tax by £10 for a band D property in each of the next three years. If fully implemented, it would see average bills rise by £30 by 2024-25.Growth, borrowing and spendingThe chancellor said that OBR forecasts show that the UK economy will grow by 6.5 per cent this year – followed by lower growth of 2.1 per cent in 2023, 1.3 per cent in 2024, and 1.6 per cent in 2025.But inflation is expected to spike to 4 per cent next year, Mr Sunak revealed – as the economy struggles to keep up with demand in the wake of Covid and Brexit. He admitted Britains supply-chain woes would take “months to ease”.Mr Sunak has also set out new fiscal rules: that debt must fall as a percentage of GDP, and the government should only borrow to invest in future growth once the pandemic has passed and the country returns to “normal times”. More

Almost £2bn has been slashed from promised development spending in poorer areas of the UK, despite Boris Johnson’s vow to “level up the country”.The government had pledged to match lost EU funding – to “tackle inequality and deprivation” – which would have required at least £4.5bn over the next three years.But Rishi Sunak’s Budget reveals just £2.6bn has been allocated and reallocates the fund to improving “functional numeracy skills”, to boost job prospects.The move will provoke fury in many ‘Red Wall’ areas of England and in Scotland and Wales – which were big recipients of EU structural funds before Brexit cut off the flow.The Conservative party manifesto at the 2019 general election promised to “at a minimum match” the lost funds in each nation of the UK. More

The government will cut taxes on domestic flights to make it cheaper to fly within the UK, Rishi Sunak has announced – despite being told by his climate advisors that he needs to reduce aviation.In a budget delivered just days before the UK hosts the Cop26 UN climate conference in Glasgow the chancellor said he wanted to make internal air travel cheaper to “cut the cost of living”.And he also announced that the government will continue to freeze fuel duty, a policy which has made it increasingly cheaper to drive compared to more environmentally sustainable alternatives.Mr Sunak’s announcement attracted the ire of environmentalists, with Green MP Caroline Lucas warning that the chancellor did not “get the memo on the climate emergency” and Friends of the Earth branding the move “astonishing”. It comes a day after the government’s own Climate Change Committee (CCC) told Boris Johnson he needed discourage people from flying and that his administration’s net zero strategy had “nothing to say” on aviation.Mr Sunak’s policy in flights is the polar opposite of some other European countries – which have increasingly moved to restrict domestic air travel where rail alternatives are available.But the government is moving to push passengers from rail to flying by cutting the price of internal flights while rail fares are set to rise at the fastest rate in a decade from January.”Right now people pay more for return flights within and between the four nations of the United Kingdom than they do when flying home from abroad,” Mr Sunak told MPs on Wednesday afternoon.”We used to have a return leg exemption for domestic flights, but were required to remove it in 2001. “But today, I can announce that flights between airports in England, Scotland, Wales and Northern Ireland will from April 2023 be subject to a new lower rate of air passenger duty.”Mr Sunak claimed the policy would “help cut the cost of living with nine million passengers seeing their duty cut by half”. “It will bring people together across the United Kingdom, and because because they tend to have a greater proportion of domestic passengers it is a boost to regional airports like Aberdeen, Inverness and Southampton which are major regional employers.”The Chancellor also confirmed he would extend state support to English airports for a further six months to “help them get through the winter”.Mr Sunak also said he would create a new “ultra long haul band” of air passenger duty affecting just 5 per cent of passengers would increase air passenger duty on flights over 5500 miles long.In a statement earlier this week the CCC, a statutory body which advises the government on meeting its climate change targets said: “The government does not include an explicit ambition on diet change, or reductions in the growth of aviation, and policies for managing travel demand have not been developed to match the funding that has been committed. “These remain valuable options with major co-benefits and can help manage delivery risks around a techno-centric approach. They must be explored further with a view to early action.”Friends of the Earth’s head of policy, Mike Childs, said: “Cutting Air Passenger Duty on domestic flights is an astonishing move that completely flies in the face of the climate emergency. The Chancellor should be making it cheaper for people to travel around the country by train, not carbon-guzzling planes.“Air Passenger Duty for all flights should have been increased, or even better replaced with a frequent flyers levy, aimed at curbing multiple flights taken by a minority of people each year.“As the Prime Minister prepares to host next week’s crucial climate summit, this retrograde step is another illustration that the government’s carbon reduction plans don’t add up.”Rebecca Newsom, head of politics at Greenpeace UK said Mr Sunak was “actively making things worse by making it cheaper to fly between UK cities”, while James Thornton, chief executive of campaign group ClientEarth the announcement on fuel and domestic flight duties “goes against everything we know about climate change” and warned that the UK had “missed a crucial chance to lead by example”. Luke Murphy, head of the environmental justice commission at the Institute for Public Policy Research think-tank, meanwhile said Mr Sunak had “used the budget to extend the ages of fossil fuels”.“Cutting air passenger duty was the most significant new policy mentioned in the budget speech today which will have an impact on greenhouse gas emissions – and it will increase them. Rishi Sunak talked for longer about beer duty, than our duty to future generations to address the climate and nature crises,” he said.“The truth is, this climate-void, fossil-fuel heavy budget failed to deliver the necessary £30 billion of investment needed each year to meet our climate and nature targets.”And Sam Alvis, head of green renewal at Green Alliance, said the chancellor’s approach to climate was “increasingly difficult to understand”.“Just days away from a vital climate conference championed by the prime minister, Rishi Sunak barely mentions net zero and encourages people to fly around the UK rather than take the train. The measure on air passenger duty will even cost the Treasury money rather than boost its revenue, he said.Ed Miliband, Labour’s shadow energy and climate secretary said: “Another Budget from the Chancellor which failed on both the cost of living crisis and the climate crisis. “No green recovery, no plan to save families £400 on bills, no plan for green steel. Working people will pay the price of Tory climate delay.” More

Inflation is to spike to 4 per cent next year as the economy struggles to keep up with demand in the wake of Covid and Brexit, the Chancellor has revealed.In his Budget speech to the Commons on Wednesday Rishi Sunak said inflation was 3.1 per cent in September and is “likely to rise further”,.He revealed that the Office for Budget Responsibility now expected CPI to average 4 per cent over next year.But there was better news on the growth front for the UK economy as Mr Sunak told MPs that the OBR believed less economic “scarring” had happened as a result of the pandemic than previously predicted.As a result, the OBR’s latest growth forecasts expects the economy to now grow more rapidly, by 6 per cent in 2022 – and then at a rate of 2.1 per cent, 1.3 per cent and 1.6 per cent in the following years.Mr Sunak said the OBR “forecast the economy to return to its pre-Covid level at the turn of the year – earlier than they thought in March”.Addressing the issue is inflation, he said “demand for goods has increased more quickly than supply chains can meet” as economies around the world reopen, while global demand for energy has also “surged”.Mr Sunak said: “In the year to September, the global wholesale price of oil, coal and gas combined, has more than doubled. The pressures caused by supply chains and energy prices will take months to ease.“It would be irresponsible for anyone to pretend that we can solve this overnight. I am in regular communication with finance ministers around the world and it’s clear these are shared global problems, neither unique to the UK, nor possible for us to address on our own.”The chancellor also used his autumn budget to announce he would create two new fiscal rules for spending, which he claimed would “keep this Government on the path of discipline and responsibility”.The self-imposed rules are likely to restrict public spending in the coming years and could see more austerity imposed on public services. Under the rules, “underlying public sector net debt, excluding the impact of the Bank of England, must, as a percentage of GDP, be falling”.Additionally, he said, “in normal times the state should only borrow to invest in our future growth and prosperity”, with the stipulation that “everyday spending must be paid for through taxation”.He said that both rules “must be met by the third year of every forecast period giving us the flexibility to respond to crises while credibly keeping the public finances under control”. More

Sir Keir Starmer has tested positive for Covid-19, just hours before he was due to face Boris Johnson at prime minister’s questions.With the deputy leader, Angela Rayner, on bereavement leave, the shadow business secretary, Ed Miliband, stood in for Sir Keir at the dispatch box on Wednesday.The shadow chancellor, Rachel Reeves, then stood in for the Labour leader to respond to Rishi Sunak’s Budget statement.Sir Keir has had to self-isolate on four separate occasions since March 2020 under the now-expired Covid restrictions – after coming into contact with someone who had tested positive.During the summer, the Labour leader was forced to abandon a summer tour of the Midlands, as part of a series of conversations across the country with voters who abandoned the party at the last general election.Mr Miliband, who resigned as leader of the party immediately after his election loss to David Cameron in 2015, was greeted by ironic cheers from Tory MPs when he stood up in the Commons chamber.He joked to MPs: “Just like the old days.“I just want to reassure both sides of the House it’s one time only,” he added.Mr Miliband used the session ahead of the Budget to criticise the government for cutting overseas aid while simultaneously lobbying nations for $100bn of climate finance for poorer nations ahead of the critical climate summit – Cop26 – in Glasgow.“We all need the vital Cop26 summit in Glasgow to deliver next week because failing to limit global warming to 1.5 degrees will have devastating consequences for our planet and that is shared across this House,” Mr Miliband told MPs.“Does the prime minister agree that to keep that goal of 1.5 degrees alive we need to roughly halve global emissions in this decisive decade?”Mr Johnson replied: “It is of course correct that Cop26 is both unbelievably important for our planet but also very difficult and it’s in the balance.”During prime minister’s questions, the chancellor, Rishi Sunak, and the justice secretary, Dominic Raab, were among senior Tory MPs wearing masks in the chamber – after the health secretary, Sajid Javid, urged politicians to set an example. More

Many universal credit claimants will keep £1,000 a year more of their benefits after the Budget included an 8 per cent cut in the harsh ‘taper rate’.Rishi Sunak went further than expected by slashing the rate – the amount of every £1 lost when someone takes on work – from 63 per cent to 55 per cent.The move offers some relief to many of the millions of people hit by the controversial £20-a-week cut in universal credit, introduced this week.The chancellor was under huge pressure to act after the cut took £6bn out of the pockets of low-earners, but is handing only £2bn back.Furthermore, the move will only benefit the approximately 40 per cent of universal credit claimants who are in work – and of those, only people able to take on extra hours.The £6bn cut is predicted to plunge half million more people into poverty, including 200,000 children. An internal Whitehall analysis warned of a “catastrophic” impact.In the final announcement of his Budget speech, Mr Sunak said what he called a “tax on work” would be reduced no later than 1 December.“The universal credit taper withdraws support as people work more hours. The rate is currently 63 per cent, so for every extra £1 someone earns, their universal credit is reduced by 63p.“To make sure work pays, and help some of the lowest income families in the country keep more of their hard-earned money, I have decided to cut this rate, not by 1 per cent, not by 2 per cent – but by 8 per cent.”Ironically, Thérèse Coffey, the work and pensions secretary, got into trouble when she appeared not to understand how the taper works, in a major gaffe last month.Mr Sunak also raised the amount claimants can earn before the benefit starts to be withdrawn – known as the work allowance – to £5,000.However, this only partially reverse one of the biggest benefit cuts imposed by George Osborne, who cut work allowances dramatically in the middle of the last decade.Paul Johnson, the head of the Institute for Fiscal Studies, said it was a “big cut” to the universal credit taper rate, but added: “Out of work UC claimants get nothing.”He also warned that, while work incentives for current recipients would be improved, but that the change “will drag more into the system”.In the Commons, a scornful Rachel Reeves, Labour’s shadow chancellor, said: “After taking £6bn out of the pockets of some of the poorest people in this country, he is expecting them to cheer today at being given £2bn to compensate.”And Morgan Wild, head of policy at Citizens Advice, said: “It doesn’t cushion the blow of the £20-a-week cut for those still looking for work or the 1.7 million unable to work because of disability, health issues or caring responsibilities.“Given the cost of living crisis, the government must ensure every family is able to access the support they need this winter.” More

Priti Patel has said she wants to force boats carrying asylum seekers back to France to “save lives”.The home secretary insisted that planned operations by the Border Force in the English Channel would not risk lives and cause people to drown.During an evidence session held by the Lords Justice and Home Affairs Committee, she said there had been “extensive work” on legal and practical issues around push-backs.Labour peer Baroness Chakrabarti, the former director of Liberty, said many people found the plans “shocking” and asked if the government had considered that it might be violating human rights and maritime law.“You’ve got to be really careful not to [affect] some people who are genuine refugees, and frankly not to drown people, whether they’re genuine refugees or not,” she added.Ms Patel said the government would “never do anything to put the safety of people’s lives at risk”.“We don’t want to see people dying at sea and I’m very vocal about this, but at the same time I’m unapologetic about our determination as a government to stop the people trafficking and putting people in boats,” she added.“We’re not here to threaten lives, we’re here to save lives and make sure that people’s lives are not put at risk.”Ms Patel said several people had already drowned in the Channel, including a migrant who was reported to have fallen off a dinghy off the coast of Essex on Tuesday.The home secretary told the committee that a legal framework had been created for push-backs and operational decisions would be made by Border Force, adding: “None of this is illegal.”Ms Patel said that decisions on push-backs would take the weather and conditions into account, and would be done “in a safe way”.“Our policy is based around saving lives and stopping people from drowning,” she added.Asylum seekers face violent pushbacks in Aegean SeaThe home secretary was speaking days after a UN Refugee Agency (UNHCR) official said push-backs in the English Channel would “unavoidably” put lives at risk and may not work as a deterrent.Speaking to the Joint Committee on Human Rights on 20 October, the UNHCR’s UK representative Rossella Pagliuchi-Lor said: “There is an obligation to both save lives at sea and not endanger lives at sea, which would almost unavoidably happen if there were attempts at turning back dinghies which are overcrowded with people.”She warned that refugees forced back to France could “fall through the cracks” and be barred from its asylum seeker, adding: “There is a real risk that the right to seek asylum is eliminated by the fact that no country will take responsibility.”Asked if push-backs would meet the government’s stated aims of deterring Channel crossings and tackle people smuggling, Ms Pagliuchi-Lor replied: “Frankly I don’t think so, we have to see but I really do not think this is going to have a significant impact.”She questioned how many boats could effectively be pushed back when crossings are happening along a “very long stretch of coast”, and urged the UK to focus on effective processing and replacing returns agreements with EU countries that were lost in Brexit.A Home Office impact assessment of the Nationality and Borders Bill, which contains the government’s plans for the Channel and wider asylum changes, said focusing on small boats could encourage “riskier means of entering the UK”.Responding to government claims that its plans will deter dangerous sea crossings, the document said “evidence supporting the effectiveness of this approach is limited”.The government has changed its Immigration Rules to mean that it can declare asylum applications from people who have travelled through EU member states on their way to Britain “inadmissible”.But the UK lost access to an EU-wide returns agreement allowing asylum seekers to be transferred back to countries including France, Italy and Spain, in Brexit.The home secretary admitted that only two returns agreements had been struck by Wednesday, with India and Albania, and several EU countries have told The Independent that bilateral negotiations are not underway.She confirmed that the government was threatening visa sanctions against “countries that do not cooperate” on accepting returnees.Ms Patel said the government would support asylum seekers arriving in the “right and proper way”, on regular routes and with documentation.But the former Labour home secretary Lord Blunkett pointed out that persecuted people may not have passports, visas or formal permission to leave the country they are fleeing.“I get the impression that if you are properly documented and you have been able to come legally you will not be granted asylum because you are clearly not at risk, whereas if you are at risk and escaped without documentation, you will be inadmissible,” he added. More

Chancellor Rishi Sunak has boasted that per pupil funding will return “2010 levels” in real terms by 2024-25 — after more than a decade of Conservative austerity.Unveiling the Budget, Mr Sunak said an extra £4.7 billion will be made available, “which combined with the ambitious plans announced at the spending review of 2019 will restore per pupil funding to 2010 levels in real terms”.According to the Institute for Fiscal Studies (IFS), between 2009-10 and 2018-19, spending per pupil fell by eight per cent in real terms in England, but rose again afterwards to “reach just below 2009-10 levels”.“Not much of a boast really to say that school spending per pupils will return to 2010 levels,” the IFS director responded. “A decade and a half without growth is quite a thing”.On the disruption caused by the Covid-19 pandemic, Mr Sunak said a further £2 billion would be made available for recovery — but still way short of the figure recommended by the former education catch up tzar.In June, Sir Kevan Collins resigned from the position in protest at the funding package offered by the government, describing it as falling “far short of what is needed” and warned: “A half-hearted approach risks failing hundreds of thousands of pupils”.In an evidence session to MPs after quitting the post, Sir Kevan said there were proposals he presented to government that “got to £15 billion”.Paul Whiteman, the general secretary of the school leaders’ union NAHT, said that while the extra funding announced at the Budget on Wednesday was welcome it still “falls far short of the £13-15 billion independent experts have said is needed”.“The government has made bold claims about ‘levelling up’ and ‘no child left behind’,” he added. “The investment announced today doesn’t meet those goals or the futures needs of the country.“The increase in per pupil spending announced by the government takes us back to 2010 levels. This is no proud boast, as it represents a failure to invest in children’s futures for over a decade.”Echoing this view, the general secretary of the Association of School and College Leaders (ASCL), Geoff Barton, said: “We fear this Budget falls a long way short of what is needed in terms of investment in education, but recognise that there is at least some progress in the right direction.”Mr Barton added: “We hear the chancellor’s claim that the investment in schools will restore per pupil funding to 2010 levels.“However, we will need to see the detail of the overall spending plans and commitments before knowing the full implications. Even in the best-case analysis this still represents no growth in school funding for 15 years, and this commitment does not address the stark reality in 16-19 education where the learner rate is far too low.”During the statement, Mr Sunak also announced a £300 million “start for life” parenting programme — with an extra £170 million by 2024/5 going into paying for childcare. More