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A Stronger Economy
On 27 October 2021 the Chancellor of the Exchequer, Rishi Sunak, set out his autumn budget plans and spending review. Billing it as an ambition for ‘a stronger economy for the British people,’ the Chancellor looked forward not only to the ongoing recovery from the covid crisis but also to the greater fiscal flexibility which the UK has now it is no longer constrained by EU tax policy.
On a positive note, the Office for Budget Responsibility (OBR) has confirmed that UK finances are in a stronger position than was previously forecast in March 2021. Against this has to be set the current level of Government borrowing and the potential additional costs should interest rates rise.
The key theme of the Budget was to promote business and innovation, levelling up chances across the UK, and helping to develop a highly skilled economy. As part of levelling up, the Westcountry could potentially benefit from plans to re-open train stations in Wellington and Cullompton. A feasibility study will also look at a potential rail link from Tavistock to Plymouth. An expansion of the British Business Bank’s regional programme will also enable SMEs in the South West to apply for debt and equity finance, providing another line of funding for new and growing businesses.
Businesses in the South West could also benefit from a number of initiatives such as an extension of the business rate relief scheme for retail, hospitality and leisure businesses, the expansion of the R&D tax relief scheme, or an extension of the temporary £1million annual investment allowance to 31 March 2023. Pubs and local breweries will also benefit from a simplification of the alcohol duty matrix alongside the freezing of duty rates on wine, beer, spirits and cider for a further year. Tourism will also be helped by a temporary increase in the rates of the Theatre, Orchestra and Museum and Galleries Exhibition tax reliefs.
Individuals will also benefit from a continuing freeze on fuel duty. Air passenger duty is also to be revamped from April 2023, to reduce the duty for internal UK flights, whilst increasing the charge paid by long haul passengers. Lower paid workers will also benefit from an increase in the national living wage to £9.50 from April 2022 alongside a reduction in the universal credit taper rate from 63% to 55%.