Summarising Rishi Sunak's announcements made in the spending review statement on 25 November
Download our summary of the key announcements from Rishi Sunak’s 2020 spending review statement made on Wednesday 25 November.
The overall picture was as expected with record high levels of government borrowing predicted and a concerning increase in the unemployment numbers. The Chancellor confirmed the government’s commitment to supporting businesses and as many jobs as possible through the next few months. That may be little comfort for those who fall through the cracks of the current support packages.
Some of the highlights were:
- Government borrowing projected to be £394 billion in 2020/21, a peace-time record, before stabilising at around £100 billion from 2023/24 onwards. Total debt to remain over 100% of GDP.
- No tax announcements although an acknowledgement that future adjustments would be required with the Office for Budget Responsibility (OBR) projecting that “a fiscal adjustment of £27 billion” will be needed as a minimum in the medium term.
- New UK Infrastructure Bank to be established in the north of England.
- Public sector pay to be frozen for a year, other than for NHS employees and those earning less than £24,000 a year.
- National Living Wage to increase by 2.2% to £8.91 an hour from April 2021 and the minimum age at which it applies is reduced to 23.
- Overseas aid to be cut from 0.7% of GDP to 0.5% in 2021.
- Further support for the long-term unemployed and freezing of business rates multiplier for 2021/22 to support business recovery
There will be the Budget in the Spring although it is still unclear whether there will be any substantive tax changes to be introduced next year or whether these will be deferred until the economy has had a chance to recover.
If you have any questions about the summary’s contents or how any aspects of your tax and financial planning may be affected, please call us to discuss them – 01483 416232.
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