Thread by @lewis_goodall

Here we go Budget 2021/SR live thread

Sunak getting underway

One notable change already- government front bench masked up (though not Jacob Rees Mogg)

Sunak on prices: "Inflation in September was 3.1%- OBR expecting inflation 4% over the course of this year."

Sunak says rising prices are "shared global problems, neither unique to the UK nor something we can solve on our own."

Of course, on labour shortages-a central govt policy Brexit is undoubtedly making shortages experienced in other countries especially severe in the UK.

Sunak says OBR expects recovery to be quicker

Says they expect UK economy to recover to pre-Covid size at start of 2022

Expects economy to grow by around 6% over the next two years before returning to around trend.

Sunak says that long term Covid scarring effect on economy has been revised down by OBR from 3% to 2%.

Remember, we haven't seen inflation at around 4% for about 10 years.

Sunak leaning into his conservative economic orthodoxy- talking about borrowing day inevitably leading to tax rises and interest rate increases tomorrow (a position which has looked more and more uncertain as the last decade has progressed).

Sunak says that borrowing as a % of GDP is forecast to fall every single year of the forecast period.

This section reaffirming Sunak's psoition as the last Osbornite standing in the Cabinet. He's even planning to do the George Osborne wheeze of putting his fiscal rules before the House to a vote to try and put Labour in a difficult political position.

The point of this is pretty dubious. You might remember when George Osborne put a surplus into law. What happened to that.

https://twitter.com/lewis_goodall/status/1453327405037260800?s=20

Sunak confirms that development spending will return to 0.7% of GDP by 2024/25. Will mean we've missed it for three-four years.

Sunak says every department will see real terms rises in budgets: "This Budget confirms that the Conservatives are the real party of public services."

The Chancellor announces the "largest increase in funding for local government in a decade". Will be welcome in local govt- though given the settlements bestowed on local govt over the past ten years, it's not an especially high bar to clear.

Should also say, this will only be the case if the fiscal rules are met.

https://twitter.com/lewis_goodall/status/1453327810605555718?s=20

Sunak says that he is returning school funding per pupil "to 2010 levels in real terms"

Curious this- Sunak basically heralding the fact the government is returning spending to the sums last reached before his party came to power...

Sunak announces a series of "levelling up fund" investments in Labour seats: "We're so committed to levelling up, we're even levelling up the opposition front bench."

Again, spirit of George Osborne abounds- talking about re-balancing of Britain's economic geography, investment in infrastructure (there's a lot more continuity between the Cameron-Johnson governments and certainly the Osborne-Sunak Chancellorships than is generally accepted).

These are the new fiscal rules

1) structural debt falling as % of GDP
2) and current budget must be in balance by third year of every forecast period.

I think the "It's a Labour budget!" takes already whizzing around maybe should wait until we see the OBR/budget documents and the actual plans for departmental spending.

Here comes the Brexit section

Tonnage tax reformed to reward ships flying the red ensign, rather than that of an EU state.

Flights between airports across the UK to have lower Air Passenger Duty

So basically, encouraging domestic flights. Big question how that squares with COP...

Extra Air Passenger Duty for long haul flights

V interested to see forecasts about behavioural effects of this. Can imagine that will encourage domestic flights whilst not affecting long haul flight plans much (you have no choice about latter and choice about former).

Basically, will likely be an effective revenue raiser on long haul but not much of a disincentive to fly.

https://twitter.com/lewis_goodall/status/1453335048086769666?s=20

Sunak announcing changes to alcohol duties

Simplifying system of duty rates from 15 to 6.

Stronger alcohols (like fortified wines and strong red wines) to be taxed more

Reader, I confess, I groaned in anguish.

https://twitter.com/lewis_goodall/status/1453336884432748545?s=20

"Draft relief" tax break on draft beer and cider, cutting duty by 5%

One for the tax aficionados: "The biggest cut to cider duty since 1923"

Planned duty rise on spirits cancelled- cost of £3bn.

The obligatory fuel duty cancellation.

Again- with COP, critics will say this was precisely the year to finally have a fuel duty rise, even with high high oil prices.

https://twitter.com/lewis_goodall/status/1453338281593217029?s=20

If we don't hear something about cutting tax on champagne from the Labour front bench within the first two minutes of Sunak sitting down I'll buy you all a bottle of a tipple of your choice.

Here we are- final announcement on Universal Credit taper

I hate saying it but here's the rabbit: Chancellor cutting the Universal Credit taper rate from 63p to 55p. Sunak says should be introduced by December 1st.

This is a big commitment. Let's wait for the budget documents but feels as if Sunak has spent a fair bit of a potential contingency fund that was much talked about.

https://twitter.com/lewis_goodall/status/1453340123425349633?s=20

Here you go- about 30 seconds in the end.

Reeves: "The Chancellor in this Budget has decided to cut taxes for Banks. So bankers on short haul flights, sipping champagne will have something to spend it on."

https://twitter.com/lewis_goodall/status/1453339310703452160?s=20

Reeves: "The Chancellor says he's discovered the importance of early years provision. Can I ask the Chancellor if he's ever heard of the Sure Start programme which this Tory government abolished?"

Something notable: only two mentions of the NHS in the Chancellor's speech. Arguably biggest public policy challenge we have is addressing waiting times. Perhaps surprising it wasn't a bigger focus.

Interesting dance between Sunak and Reeves.

Reeves attempting to place Johnson's government firmly as a successor to the Conservative governments which came before. Sunak at times placing himself as a successor but as often talked about taking us back to 2010.

Ditto this for housing. Little new for cladding/building safety crisis.

https://twitter.com/lewis_goodall/status/1453342845021167618?s=20