Kerry Williams of Stephenson Smart

News: Spending Review 2020 response from Kerry Williams

25th November, 2020, Kerry Williams

In his announcement in the Commons today, Chancellor Rishi Sunak focussed heavily on public spending, especially in response to the Covid pandemic.  He referred to the ‘economic emergency’ that our country is in. The Office for Budget Responsibility (OBR) forecast was that the economy would shrink by 11.3 per cent this year and not recover to its pre-Covid level until the 4th quarter of 2022.

In light of this, the Chancellor announced a raft of public spending to try and continue to protect jobs and public services, the only cut back being to pause the pay rise for public sector workers that weren’t nurses, doctors or NHS staff – apart from those currently earning less than the median wage.

He also announced a drop from 0.7 per cent to 0.5 per cent in spend on overseas aid.

The areas that were announced in today’s Spending Review that will most affect local people and businesses were the increase of the National Living Wage by 2.2 per cent to from £8.72 to £8.91 per hour, and also new National Minimum Wage rates, both will apply from April 2021.

There will also be an increase to the 2021-22 Income Tax Personal Allowance and Higher Rate Threshold, in line with inflation, from April 2021.

The Chancellor also announced today that he will freeze the Business Rates multiplier in 2021-22 and is considering further Business Rate reliefs.

You can view a full list of the economic support schemes in place for businesses during Covid in our online Business Interruption Guide.

It had been rumoured that the Chancellor would take this opportunity to start to gently prepare us all for the changes that will inevitably be made to taxes to claw back the £280 billion spent this year alone on support during coronavirus.  However, it seems that we have a reprieve, at least for a few months, as it is likely these changes will now be announced in the Spring Budget.

25th November, 2020, Kerry Williams

In his announcement in the Commons today, Chancellor Rishi Sunak focussed heavily on public spending, especially in response to the Covid pandemic.  He referred to the ‘economic emergency’ that our country is in. The Office for Budget Responsibility (OBR) forecast was that the economy would shrink by 11.3 per cent this year and not recover to its pre-Covid level until the 4th quarter of 2022.

In light of this, the Chancellor announced a raft of public spending to try and continue to protect jobs and public services, the only cut back being to pause the pay rise for public sector workers that weren’t nurses, doctors or NHS staff – apart from those currently earning less than the median wage.

He also announced a drop from 0.7 per cent to 0.5 per cent in spend on overseas aid.

The areas that were announced in today’s Spending Review that will most affect local people and businesses were the increase of the National Living Wage by 2.2 per cent to from £8.72 to £8.91 per hour, and also new National Minimum Wage rates, both will apply from April 2021.

There will also be an increase to the 2021-22 Income Tax Personal Allowance and Higher Rate Threshold, in line with inflation, from April 2021.

The Chancellor also announced today that he will freeze the Business Rates multiplier in 2021-22 and is considering further Business Rate reliefs.

You can view a full list of the economic support schemes in place for businesses during Covid in our online Business Interruption Guide.

It had been rumoured that the Chancellor would take this opportunity to start to gently prepare us all for the changes that will inevitably be made to taxes to claw back the £280 billion spent this year alone on support during coronavirus.  However, it seems that we have a reprieve, at least for a few months, as it is likely these changes will now be announced in the Spring Budget.


Kerry Williams of Stephenson Smart

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