Britain’s autumn budget will see Chancellor of the Exchequer Rishi Sunak unveil more than £31 billion ($42.7bn) of investment as he strives to boost Britain’s post-Covid-19 economy.
Mr Sunak’s second budget of the year will see him focus on the future as he pledges to build a “stronger economy for the British people”, a shift from when his main focus was to support the economy through the pandemic.
“[Over] the last year, I've been focused on delivering our plan for jobs, protecting people's livelihoods, their incomes, their job,” Mr Sunak said in the run-up to the budget.
A number of investments have already been unveiled, including a fund to attract foreign talent to the UK, a rise in the minimum wage and tax changes to tempt more of the world's largest shipping companies to UK shores.
Other key issues affecting people's finances, such as cuts to value-added tax (VAT) rates on household bills, have yet to be confirmed.
So here are the highlights of what to expect from this year’s budget:
Attracting innovative talent from overseas
A £1.4bn fund to boost investment into Britain’s economy will strive to attract foreign talent to the UK, in turn boosting growth and creating jobs.
The fund will funnel money into key sectors by handing out grants to encourage internationally mobile companies to invest in the UK's critical industries, such as life sciences and automotive.
The fund includes £354 million to support investment in life sciences manufacturing, increasing resilience for future pandemics, and more than £800m in the production and supply chain of electric vehicles, including in England's North-East and Midlands regions.
Meanwhile, a new set of talent hubs around the world aim to make it easier for highly-skilled workers in the science and tech sectors to relocate to the UK.
The hubs will be set up in innovation hotspots, such as the Bay Area of San Francisco and Boston in the US, which will go live in 2022, and also Bengaluru in India, to source leading lights from universities, businesses and research institutions.
The government will also make it easier for companies to relocate to the UK through a new re-domiciliation scheme, to give a further boost to investment and skilled jobs in the country.
Expert view: Rain Newton-Smith, chief economist at the Confederation of British Industry, said the scheme “hits the spot” at a time when the UK is grappling with labour shortages.
“The UK has always been an attractive location for top talent,” Ms Newton-Smith said.
“With labour shortages biting in sectors from the lower-skilled to the high, this new network could prove a useful tool in some of our most exciting, higher skilled industries alongside much needed funds to spur global investment into the UK.”
Boosting Britain’s minimum wage
The minimum wage is set to increase to £9.50 an hour, a 6.6 per cent increase from the £8.91 previously paid to adults aged 23 and over.
This is more than twice the 3.1 per cent rise in inflation recorded in September and reflects the government’s commitment to help low-paid employees as well as younger workers, who were more heavily hit by the pandemic.
Known as the National Living Wage, it refers to the hourly pay all workers are entitled to, with this latest increase taking effect from April 1 next year — offering a boost to millions of employees.
The £0.59 uplift will deliver a pay rise of more than £1,000 a year, with Mr Sunak also set to announce wage rises for younger workers under the age of 23.
For those aged 21-22, the National Minimum Wage rate will increase to £9.18 an hour, from £8.36, while an 18-year-old apprentice in an industry such as construction will see their minimum hourly pay increase by almost 12 per cent to £4.81 an hour.
Expert view: Mike Cherry, chairman of the Federation of Small Businesses, raised concerns over the impact of the pay rises on the jobs sector, saying that any rise “must be affordable without jeopardising jobs”.
“Small firms are still trying to recover from the pandemic, and the last thing they want to do is to force customers to pay more or make cuts to staffing numbers,” he said.
A post-Brexit approach to shipping
Tax changes will be introduced to encourage more of the world's largest shipping companies to set up shop on UK shores.
Ships that fly the UK Red Ensign — a red flag with the Union Jack in the upper left hoist — have more chance of being accepted when applying to join the UK’s Tonnage Tax Regime, which helps countries attract shipping companies to their jurisdictions through competitive tax rates.
The same will apply to shipping companies that invest in net-zero, in the first shake-up of the shipping rules in more than two decades.
The Treasury said when the UK was part of the European Union, there were no benefits for ships that wanted to fly the Union Jack as opposed to other flags from EU countries.
With 95 per cent of the UK’s trade in goods carried out by sea, Mr Sunak said now that the UK has left the EU, “it’s time for us to do even more to help the UK shipping industry to grow and compete in the global market”.
Expert view: Gavin Simmonds, policy director commercial at the UK Chamber of Shipping, said the industry welcomed the move as it will “encourage innovation in the offshore energy sector and attract international investment”.
Raising public sector pay
Millions of public sector workers are in line for a pay rise after Mr Sunak confirmed he will scrap the year-long public sector pay freeze in his fiscal statement.
The move could see teachers, nurses, police and armed forces staff receive a pay rise, after a “temporary pause” in salary progression was introduced in November last year in response to the pandemic. However, an exception was made for the NHS and those earning less than £24,000.
There were 5.68 million public sector workers registered in June, according to the latest data from the Office for National Statistics, with Mr Sunak saying it was “right” that frontline workers would “see their wages rise” as the economy recovers.
Expert view: Unison union general secretary Christina McAnea said the pay freeze would continue “in all but name” unless government departments were given extra money by Mr Sunak to fund the wage increases.
“Pay freezes don't help employers hold on to experienced staff, nor attract new recruits,” she added.
Investing in the health of today and tomorrow
Almost £6bn in funding will help the NHS tackle treatment backlogs as the government strives to help the sector recover from delays caused by the Covid crisis.
The money will focus on easing the backlog of non-emergency tests and procedures, such as MRIs, ultrasounds and CT scans, and invest in technology and data to improve efficiency and security within the health service, with the £5.9bn in funding in addition to the government’s plan to spend £8bn on the NHS following Covid.
Separately, about £5bn will go to the Department of Health and Social Care over the next three years to fund research and development in areas such as genome sequencing and tackling health inequalities.
This will include genome technology to allow doctors to detect more than 200 conditions in babies, compared with existing tests which can only identify nine.
About £95m of the funding will be given to the Office for Life Sciences to boost the development of cutting-edge innovations to treat cancer, obesity and mental ill health.
Expert view: Dr Layla McCay, director of policy at the NHS Confederation, said new spending for the NHS will “go a long way”. but further investment is required considering the health service is short of 80,000 staff.
“While it will be really helpful, particularly in addressing the backlog, we need to remember that the NHS does need a little bit more than that in order to properly restore services and work through the additional expenses that have been created by Covid-19,” Dr McCay said.
Boosting the skills of Britain’s young workers
A cash injection of £3bn will be given to boost post-16 education, but also to train adults later in life, while the number of skills boot camps in areas such as artificial intelligence, cybersecurity and nuclear will be quadrupled.
About £1.6bn will provide up to 100,000 16 to 19-year-olds studying for T-levels — technical qualifications — with additional classroom hours, while 24,000 traineeships will also be created.
Separately, football pitches, tennis courts and youth facilities will see £700m of funding to help foster the next generation of young talent.
In addition, up to 500,000 adults will be able to access a £560m scheme to improve their mathematics skills after it was found more than eight million people in England have numeracy skills lower than those expected of a nine-year-old.
Expert view: Geoff Barton, general secretary of the Association of School and College Leaders, said “post-16 education has been woefully underfunded by the government for many years”
“More investment is also needed in schools, early years and in education recovery following the Covid pandemic,” he added.
'Levelling up' the UK’s transport sector
Almost £7bn will be invested in local transport to help “level up commutes” across the UK.
Money will be given to areas such as Greater Manchester, the West Midlands and South Yorkshire for projects ranging from tram upgrades to introducing London-style improvements in infrastructure, fares and services.
About £5.7bn will be pumped into sustainable transport settlements for city regions to boost productivity through train and station upgrades, as well as the expansion of tram networks,
A further £1.2bn of new funding will go towards transforming bus services to deliver London-standard journey times, fares and number of services.
Expert view: Labour's Andy Burnham, who is also the Mayor of Greater Manchester, said the investment was “an important first step towards a London-style public transport system for Greater Manchester".
However, he stressed that the infrastructure investment “will not make levelling up feel real to the people of Greater Manchester”.
“That will only happen when the frequency and coverage of bus services are increased and fares are lowered to London levels,” he said.
Helping angel investors reach the whole country
Angel investors will be connected with businesses outside London and the South-East through a £150m pot of funding for the British Business Bank.
The money will encourage the development of regional networks of Dragons' Den-style angel investors to help make people's dreams of starting a business a reality.
The Regional Angels Programme will reduce “imbalances in access to early stage funding”, with more than 200 businesses in sectors such as technology, life and health sciences and manufacturing already benefiting since June this year,
Expert view: Kitty Ussher, a chief economist at the Institute of Directors, said 85 per cent of the organisation’s members are SME company directors based outside London.
“We strongly welcome this additional commitment to providing more early-stage equity finance to get great business ideas up and running across the UK. No entrepreneur should be denied a helping hand to get started simply by virtue of where they live,” she said.
Building new homes on regenerated land
Brownfield sites covering the equivalent of 2,000 football pitches are set to be plots for new homes with a £1.8bn injection unveiled at the budget.
Brownfield sites are disused or derelict land in urban areas, with hopes 160,000 homes could be built on regenerated land across the country, while England's planning system will also face an overhaul, including digitisation, thanks to a £65m investment.
As well as new homes, transport links, schools and community parks will receive an uplift from £300m of grant funding set to be handed to regional mayors and councils to unlock smaller brownfield sites for housing.
Expert view: Zoe Nicholson, Green Party leader of Lewes District Council, said while building on brownfield sites made sense, the investment was an “absurdly small amount of money".
“This announcement seems to be little more than a gimmick intended to distract us from the fact that their agenda is to simply 'build, build, build' on our countryside to the benefit of greedy developers,” Ms Nicholson said.
Boosting Britain’s security
Mr Sunak will spend £74m upgrading the UK's fleet of Border Force patrol vessels, with 11 cutting-edge more fuel-efficient vessels with newer engines that emit less carbon,
The move is part of a £703m package to protect the UK border and help tackle serious and organised crime, along with the smuggling of illicit goods and illegal migration.
Separately, Britain will also overhaul its immigration checks at airports with £628m spent on “modernising and digitalising the border”.
Tourists will need a US-style Electronic Travel Authorisation to enter the UK, with the system expected to start in 2023.
