Optimistic chancellor delivers upbeat Budget

Chancellor of the Exchequer Rishi Sunak holds his ministerial 'Red Box' as he stands with his minist

Chancellor Rishi Sunak outside 11 Downing Street, London, before delivering his Budget - Credit: PA

Chancellor Rishi Sunak ushered in his "age of optimism" with a Budget speech bursting with positivity on the back of better than expected economic news. 

Mr Sunak opened his Budget statement promising the "stronger economy of the future" but added a line had not been drawn under the battle with Covid.

There was good news for East Anglia's battered retail and hospitality sector with a 50pc rates relief for the next 12 months.

He told the House of Commons: "I'm announcing today, for one year, a new 50pc business rates discount for businesses in the retail, hospitality, and leisure sectors."

And landlords will be toasting lower duty rates on many drinks. Tax on draught beers is therefore set to drop by 5pc - the biggest cut for 50 years. 

Announcing "draught relief" he said: "It will apply to drinks served from draught containers over 40 litres. It will particularly benefit community pubs who do 75pc of their trade on draught. Let me tell the House the new rate: draught relief will cut duty by 5pc.

"That's the biggest cut to cider duty since 1923. The biggest cut to fruit ciders in a generation. The biggest cut to beer duty for 50 years. This is not temporary, it's a long-term investment in British pubs of £100 million a year.

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"And a permanent cut in the cost of a pint by 3p."

Mr Sunak said the reforms will come into effect in February 2023.

And he also cancelled a planned fuel rise.

The chancellor confirmed the Office for Budget Responsibility had forecast a faster bounce back from Covid for the economy with growth expected to be 6.5pc this year rather than the 4pc previously expected.

He also predicted that the economy would be back to pre-lockdown performance levels by the end of the year.

However Number 11 did not buckle under immense pressure to U-turn over the decision to cancel the £20 Universal Credit (UC) rise implemented during the pandemic.

However Mr Sunak did announce an 8pc cut to the UC taper rate.

"The Universal Credit taper withdraws support as people work more hours," he said. "The rate is currently 63pc, so for every extra £1 someone earns, their Universal Credit is reduced by 63p.

"Let us be in no doubt: this is a tax on work - and a high rate of tax at that."

He added: "To make sure work pays, and help some of the lowest income families in the country keep more of their hard-earned money, I have decided to cut this rate, not by 1pc, not by 2pc - but by 8pc."

Speaking in the Commons, the shadow chancellor Rachel Reeves - deputising for Labour leader Sir Keir Starmer after he tested positive for Covid - said: "Families struggling with a cost-of-living crisis, businesses hit by a supply chain crisis, those who rely on our schools and hospitals and our police - they won't recognise the world the chancellor is describing.

"They will think he is living in a parallel universe."

She added: "The Chancellor in this Budget has decided to cut taxes for banks.

"So at least the bankers on short-haul flights sipping champagne will be cheering this Budget today."

Reflecting on the choices made by Mr Sunak, the shadow chancellor said: "The highest sustained tax burden in peace time.

"And who is going to pay for it? It is not international giants like Amazon, no, the Chancellor has found a tax deduction for them.

"It is not property speculators, they already pocketed a stamp duty cut, and it is clearly not the banks, even though bankers' bonuses are set to reach a record high this year.

"Instead, the Chancellor is loading the burden on working people. A national insurance tax rise on working people, a council tax hike on working people, and no support today for working people with VAT on their gas and electricity bills."

Instead, she argued, people are getting in return a "record NHS waiting list with no plan to clear it", adding: "No way to see a GP and still having to sell their homes to pay for social care. Community policing nowhere to be seen, a court backlog leaving victims without justice and almost every rape going unprosecuted."