Wednesday, November 22, 2017
Chancellor of the Exchequer Philip Hammond took to the despatch box to deliver his annual budget to the UK Parliament for 2017.
Speaking for just over an hour, at times he revelled in his reputation as "Spreadsheet Phil" delivering sobering statistics and complex changes.
During the usual lively encounter, Mr Hammond focused on housing and encouraging growth to make sure the UK would be fit for the future. Labour's Jeremy Corbyn said it was a budget that showed they were not fit for office.
So, How's the UK Economy Doing?
- Growth forecast for 2017 downgraded from 2% to 1.5%
- GDP downgraded to 1.4%, 1.3% and 1.5% in subsequent years before rising to 1.6% in 2021-22
- Productivity growth and business investment also revised down
- Annual rate of CPI inflation forecast to fall from peak of 3% to 2% later this year
- Another 600,000 people forecast to be in work by 2022
Borrowing, Debt and Brexit
- £3bn to be set aside over next two years to prepare UK for every possible outcome as it leaves EU
- Annual borrowing £49.9bn this year, £8.4bn lower than forecast in March
- Borrowing forecast to fall in every subsequent year from £39.5bn in 2018-19 to £25.6bn in 2022-23
- Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.4% this year, then 1.9%, 1.6%, 1.5% and 1.3% in subsequent years, reaching 1.1% in 2022-23.
- Debt will peak at 86.5% of GDP this year, then fall to 86.4% next year; then 86.1%, 83.1% and 79.3% in subsequent years, reaching 79.1% in 2022-23.
Mr Hammond said he wanted to revive the home ownership dream, also a flagship policy area for the Prime Minister. He said it was a complex issue with no silver bullet but offered:
- Long-term goal to build 300,000 new homes a year by the mid-2020s
- £44bn in government support, including loan guarantees, to boost construction skills
- 100% council tax premium on empty properties
- Compulsory purchase of land banked by developers for financial reasons
- Review into delays in permitted developments going forward
- £28m for Kensington and Chelsea council to provide counselling services and mental health support for victims of the Grenfell fire and for regeneration of surrounding area
- New homelessness task force
Fuel, Tobacco and Alcohol
- Alcohol, tobacco, gambling and fuel
Tobacco will rise by 2% above Retail Price Index (RPI) inflation while the minimum excise duty on cigarettes introduced in March will also rise, as will duty on hand-rolled tobacco
- Duty on beer, wine, spirits and most ciders will be frozen
- But duty on high-strength "white ciders" to be increased via new legislation
- Vehicle excise duty for diesel cars that do not meet latest standards to rise by one band in April 2018
- Tax hike will not apply to van owners
- Existing diesel supplement in company car tax to rise by 1%
- Proceeds to fund a new £220m clean air fund
- Fuel duty rise for petrol and diesel cars scheduled for April 2018 scrapped
- Tax-free personal allowance to rise to £11,850 in April 2018
- Higher-rate tax threshold to increase to £46,350
- Short-haul air passenger duty rates and long-haul economy rates to be frozen, paid for by an increase on premium-class tickets and on private jets
- VAT threshold for small business to remain at £85,000 for two years
- £500m for 5G mobile networks, fibre broadband and artificial intelligence
- £540m to support the growth of electric cars, including more charging points
- A further £2.3bn allocated for investment in research and development
- Rises in business rates to be pegged to CPI measure of inflation, not RPI
- Income tax to be applied from April 2019 on digital economy royalties relating to UK sales which are paid to a low-tax jurisdiction, raising about £200m a year
Education & Skills
- £40m teacher training fund for underperforming schools in England. Worth £1,000 per teacher
- 8,000 new computer science teachers to be recruited at cost of £84m
- Secondary schools and sixth-form colleges to get £600 for each new pupil taking maths or further maths at A-level at an expected cost of £177m
- £320m to be invested in former Redcar steelworks site
A Budget for the United Kingdom
- Second devolution deal for the West Midlands
- £1.7bn transport fund for city regions
- £2bn for Scottish government, £1.2bn for Welsh government and £650m for Northern Ireland executive
- Scottish police and fire services to get refunds on VAT from April 2018.
Managing the Implementation of Universal Credit
- £1.5bn package to "address concerns" about the delivery of universal credit
- Seven-day initial waiting period for processing of claims to be scrapped
- Claimants to get one month's payment within five days of applying
- Repayment period for advances to increase from six to 12 months.
- New universal credit claimants in receipt of housing benefit to continue to receive it for two weeks
Managing an 'NHS under pressure'
- £2.8bn in extra funding for the NHS in England
- £350m immediately to address pressures this winter, £1.6bn for 2018-19 and the remainder in 2019-20
- £10bn capital investment fund for hospitals.
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