Chancellor Rishi Sunak made a number of statements both in his budget speech and in his round of interviews afterwards.
We’ve looked at a few, including the alcohol tax, tax cuts, and debt.
“The independent supervisor has said that our comprehensive plans will reduce carbon emissions and move us further along the path to net zero.”
The Office of Fiscal Responsibility (OBR) has indeed said that fiscal policies coupled with the net zero strategy and the rising cost of fossil fuels could accelerate the reduction of emissions.
On the balance sheet alone, the OBR said that while it “includes fiscal measures that could help on the path to net zero, it also includes fiscal measures that will make the work of getting there harder … by lowering the price of cars and air. domestic. to travel in the next five years “.
It is very difficult to calculate the impact of the changes to the air tax in terms of emissions.
The OBR estimates that as a result there will be 410,000 more air journeys within the UK, but there will be 23,000 fewer ultra-long international journeys (more than 5,500 miles) per year.
The OBR also said the government has not yet quantified the emissions effects of its fiscal measures.
The Chancellor used the phrase “debt down” twice in his budget speech.
Public debt is measured in different ways. With the “title” debt, in the year until the end of March 2021, UK debt it stood at £ 2.2 trillion, up from £ 1.9 trillion a year earlier.
This was also an increase in debt in proportion to GDP, which is a measure of the value of everything that is produced by the economy, from 83% to 104%.
But the clerk was not referring to the principal debt, but to the extent of the “underlying” debt, which excludes the Bank of England schemes.
The Chancellor announced the Office for Budgetary Responsibility (OBR) forecasts for that measure, which suggested it was still on the rise.
The underlying debt is projected to be 85.2% of GDP this year, 85.4% in 2022-23 and 85.7% in 2023-24, before decreasing over the next three years.
However, this is enough to satisfy the Chancellor’s new fiscal rule, which requires it to be on track to bring underlying debt down to GDP in three years.
‘We are taking advantage of the exit from the EU to announce the most radical simplification of alcohol tariffs in over 140 years’
There are certainly aspects of the alcohol tariff changes that would not have been allowed when the UK was part of the EU.
But EU countries can set their own duty rates, and the UK has set some of the highest in Europe.
However, as a member of the EU, while the UK was allowed to tax beer by its own force, duties on cider and wine could only be set in line with the quantity sold.
The School of Health and Related Research noted that “such tariff structures create perverse incentives to purchase higher alcoholic beverages in larger quantities.”
The Chancellor’s alcohol tax reforms will not apply to Northern Ireland, which remains subject to elements of EU law.
‘We cut taxes on millions of the lowest ones paid yesterday’
There has been some discussion on the Today program about this claim, because it was based on the idea that the “taper rate” reduction is a tax cut.
The reduction rate is the rate at which universal credit applicants receive their benefits when they make money.
The chancellor described the tape rate as “essentially a labor tax rate for those with the lowest incomes”.
If reducing the pound’s tape rate from 63p to 55p counts as a tax cut, then it could be argued that the end of the £ 20 per week increase in universal credit earlier this month could count as a tax hike. .
But the chancellor described them as “two very different things”.
The Foundation estimates for resolution that of the 4.4 million households currently applying for universal credit:
- 3.2 million overall will be worse for the loss of £ 20 per week
- 1.2 million will be better off thanks to the changes to universal credit
- The Treasury estimates that 1.9 million households with one working member currently claim universal credit
- The cut in the tapering rate also means that there will also be some households eligible for universal credit that previously were not.
Many low-paying workers will also be affected by next April’s national insurance hike from 12% to 13.25%, which will affect employees earning more than £ 9,564 per year.
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