Adrian Young, tax partner at accounting and business advisory firm HURST, commenting on today’s Government Spending Review, said:
“The chancellor was clear from the outset that the UK is facing some difficult times, referring to economic and fiscal emergencies, and the extraordinary measures to deal with them.
And the measures he’s taking are indeed extraordinary, including £280bn of spending to tackle the pandemic, capital investment increasing, and borrowing going up to a headline-grabbing figure of £394bn which represents 19 percent of GDP, the highest in peace time.
Interestingly, there was no mention of how the spending is going to be paid for, perhaps in keeping with the government’s wider message that ‘now is not the right time’ to be worrying too much about the detail. We would expect this detail including news of tax rises to be announced in the Spring Budget.
The anticipated freeze on public sector pay was, in the event, less severe than expected, sweetened by exceptions for the NHS and lower-paid workers.
The increase in the National Living Wage and National Minimum Wage will also be good news for many, although the additional costs to employers will cause headaches for businesses.
Mr Sunak’s capital investment news will be of interest to many. In particular, the announcement of a National Infrastructure Strategy and the unveiling of the new northern-based Infrastructure Bank will be welcomed, as will the £4bn Levelling Up Fund. All of these are eye-catching projects that no doubt the chancellor hopes will start to move the agenda on to a positive post-pandemic future.”
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