- The government will spend £280bn this year “to get our country through coronavirus”.
- It is expected to borrow £394bn this year – the highest level in our peacetime history.
- The economy is predicted to contract by 11.3% this year, growing 5.5% next year and 6.6% in 2022.
- The number of unemployed people in the UK is expected to increase to 2.6 million by mid-2021. Some 1.62 million people are now unemployed, 300,000 more than last year.
- Public sector pay will be frozen, except for the lowest paid, nurses, doctors and other NHS staff, who will get a pay rise.
- The national living wage will increase to £8.91 an hour and extend to over-21s.
- The core health budget will increase by £6.6bn, which will help to hire 50,000 new nurses.
- The schools budget will increase by £2.2bn.
- Investment in infrastructure will total £100bn next year, with a new infrastructure bank headquartered in the north of England to be created.
- Spending on overseas aid in 2021-2 will be 0.5% of national income, down from the 0.7% currently set in law.
- A new £4bn fund for “levelling up” will be available – any local area can bid for funding for local projects.
Concluding that it was not the right time to share the private sector impact and so the 2021-22 tax rises are still yet to be announced. In our September 2020 blog post we highlighted that tax increases are on the way and this seems even more inescapable now. We are continuously working with business owner clients to plan and adapt for whatever the new tax regime brings.
What makes for a globally unprecedented year with the pandemic and politics it will be finished off with our exit from the EU. If your business interacts with the EU whether that be import / export or employments overseas, you will need to make preparations for the Brexit transition in 34 days time. If you are unsure how this new red tape will affect your business and are yet to make arrangements, useful guidance can be found here: Brexit transition – GOV.UK (www.gov.uk)