Header

Key points from UK’s budget 2017

Defence Secretary, and chancellor, Philip Hammond, is unveiling UK’s budget 2017.Key points from UK's budget 2017The UK government will spend £1.5bn to “address concerns” about its flagship universal credit scheme, Philip Hammond has announced in his Budget.

In the last nine months, the UK has triggered Brexit and begun negotiations on the terms of its departure from the EU.

Economic conditions have changed too, although there is fierce debate about how much of this is attributable to uncertainty and negativity over Brexit.

Inflation has risen to 3%, its highest level in five years, while growth has faltered a little.

 

However, borrowing levels are at a 10-year low, giving Mr. Hammond more flexibility, while employment remains at record levels.

It will be used to reduce the waiting period for payments and make it easier for claimants to receive an advance.

The chancellor also pledged £3bn to prepare for Brexit and an extra £2.8bn for the NHS.

And he has unveiled lower growth forecasts and said the productivity remains “stubbornly flat”.

Here are all the Key points from UK’s budget 2017.

Housing

  • 100% council tax premium on empty properties.
  • £28m in three new housing pilots – in the West Midlands, Manchester and Liverpool – to halve rough-sleeping by 2022.
  • £44bn for capital funding to help build 300,000 homes annually by 2020.
  • £8bn of financial guarantees to support private building.
  • £2.7bn housing infrastructure fund.
  • £34m for construction skills.
  • A review to be chaired by Oliver Letwin to look at ways to speed up planning permission.
  • Five new garden towns.
  • One million new homes on the Cambridge Milton Keynes Oxford corridor by 2050.

Stamp duty

  • Abolished for first-time buyers on homes up to £300,000, and on the first £300,000 of properties up to £500,000.

RM: This is the big one. It will please many looking to buy their first home. But it is hard to see how it will increase supply, is likely to help those in the south-east the most, and may just stimulate the slowing market again.

 

Borrowing

  • £49.9bn this year, down from previous estimate of £58bn.

RM: Hammond says he is not resiling from efforts to bring down the UK’s deficit and debt, as he still wants to balance the books like George Osborne. But he is slightly slowing the pace of reducing the deficit so borrowing will reduce less rapidly than forecast in March.

Research and development

  • £2.3bn of investment.
  • Tax credit 12%.

RM: The chancellor is focusing on scientific investment as he tries to pitch this as a ‘forward-looking’ budget. It involves tax breaks for spending on research, even though these have been criticised by the IPPR thinktank for subsidising investment that would have happened anyway.

  • Investigate charges on plastic waste.

RM: This is a potential revenue raiser for the Treasury, after a string of media stories about the wastefulness of items such as coffee cups, plastic bags, food wrappers, straws and drinks bottles. This is only a consultation though, so could take a while to flow through.

Technology

  • £20bn of new investment in UK knowledge-intensive industries.
  • £2.5bn from the business bank.
  • Encourage pension fund investment.
  • Boost to EIS.
  • Replace funding from Europe.

Electric cars

  • £400m charging infrastructure.
  • Those charging electric vehicles at work will not face taxes.

RM: This is another boost for a new technology, although quite a niche one as electric cars are only driven by a tiny minority of people at the moment.

Diesel cars

  • 1 percentage point increase in company car tax.
  • From 2018, an increase in tax on cars that don’t meet standards – to go up by one band.

RM: Hammond promises that he is not hammering white van man or woman – mindful of how his budget will be received by headline writers at the Sun. The increase in vehicle tax also only applies to new diesel cars, so existing owners will avoid being penalised as well.

Education

  • Maths: £40m for maths teachers; £600 premium for maths students in A levels.
  • Computing: triple number of science teachers to 12,000; new national centre for computing.
  • National retraining scheme for digital expertise.

RM: This announcement is covered in the fingerprints of Hammond’s deputy, Liz Truss, who has long spoken about the need to focus on maths, science and the quality of teaching.

Northern powerhouse

  • £1.7bn transforming cities fund.

RM: It seems May’s government has not abandoned Osborne’s northern powerhouse after all. This announcement is about better connecting prosperous city centres with their suburbs.

Scotland, Wales and Northern Ireland

  • £650m extra for NI.
  • £2bn extra for Scotland.
  • £1.2bn extra for Wales.

Oil

  • Tax changes to encourage investment.

RM: This is a straightforward tax break for North Sea oil producers, slightly undermining the chancellor’s earlier green rhetoric about electric cars and taxing plastics.

Universal credit

  • £1.5bn to remove seven-day waiting period; new claimant in receipt of housing benefit will get it for two weeks.

RM: This is a partial victory for those campaigning against the injustices of the universal credit system leaving many in hardship. It is an expensive move – reducing the waiting time of claimants by one week, make advances quicker and give people housing benefit for longer to avoid the threat of evictions while they wait for universal credit. Tory MPs are likely to be appeased but Labour may well think this does not go far enough, considering many have been left waiting for six weeks for their first payments.

Rent

  • £125m of funding to help 140,000 people.

Living wage

  • Up to £7.83 from £7.50.

RM: The Conservatives say this will give the lowest paid a rise of about £600 a year but it is still below the real living wage of £8.75 and Labour’s promise to raise it to £10.

Income tax

  • Basic rate rises to £11,850 from April; 40% threshold increases to £46,350.
  • Chancellor has previously pledged to increase basic rate to £12,500 by 2020.

RM: This is in line with the Conservatives’ pledge to increase the basic rate threshold to £12,500 by 2020 and the higher rate threshold – the point at which you start paying 40% tax – to £50,000 by 2020.

Duties on spirits, wine and beer

  • Frozen.

RM: This one got a huge cheer from the backbenches. ‘Happy Christmas, Mr Deputy Speaker,’ Hammond adds.

New railcard

  • 4.5 million people aged 26-30 to get a third off rail fares.

RM: Hammond has been under pressure to appeal to younger voters after they turned to Labour in their droves at the election. However, some have questioned whether such an obvious handout will tempt those in their 20s back to the Conservatives and highlighted the risk that it could annoy those in their 30s who also turned to Labour.

Airlines

  • Increase on air passenger duty on premium class tickets.

RM: The chancellor turns to wealthier first class passengers and those who travel by private jet to fund a freeze in air passenger duty, which airline bosses have long been complaining makes them uncompetitive.

Fuel duty rise

  • Cancelled.

RM: Every year Conservative MPs lobby against further rises in fuel duty and this year the chancellor has given in once again – at a time of rising petrol and diesel prices.

NHS

  • £10bn capital investment in frontline services over the course of this parliament.
  • £2.8bn of extra funding for England.

RM: The chancellor is giving an extra £2.8bn to the NHS – which falls short of the £4bn demanded by Simon Stevens, the chief executive of NHS England. As expected, he commits to £10bn on capital expenditure in the health service.

Tax avoidance

  • Measures to save £4.8bn by 2022-23.

RM: It is the most predictable element of any budget: pledges by the chancellor to raise money from cracking down on tax avoidance.

Business rates

  • £2.3bn cost to bring forward the change to CPI from RPI brought forward to 2018.
  • After next revaluation, future revaluations to take place every three years.
  • Staircase tax: businesses hit will have original bill reinstated.
  • Discount for pubs (rateable value less than £100,000) extended by one year to March 2019.

Digital tax

  • £200m a year extra from income tax on UK sales.

RM: This is an attempt to raise money from digital retailers to level the playing field between them and high street shops, but the £200m revenue is not huge.

Grenfell Tower

  • £28m for mental health services; local regeneration for Kensington and Chelsea council.

Brexit

  • £3bn set aside for Brexit preparations.

Rowena Mason, deputy political editor: This is a big boost to the £700m previously allocated for preparations. It will be seen as a victory for those hard Brexiters pushing for more money to be put into getting ready for the possibility of leaving with no deal. But critics of Brexit are likely to seize on the high sum, which could otherwise have been spent on improving public services. Voters were also promised that leaving the EU would save them money, not cost more.

Growth

  • Revised down to 1.5% in 2017 from 2%.
  • Forecasts are 1.4% in 2018, 1.3% 2019, 1.3% 2020, 1.5% 2021 and 1.6% 2022.
  • In March, the forecasts were 1.6% in 2018, 1.7% 2019, 1.9% 2020 and 2% 2021.

RM: It is nearly all bad news on the economic front. Growth is lower than expected and productivity still poor. Hammond does not say why the economy will slow for the next three years but there will be inevitable links to the uncertainty caused by Brexit.

Source: Samcilla/BjrliveFM.com/22117/

Nnananna

0

Leave a Reply