The chancellor delivered his budget to the House of Commons yesterday afternoon with a speech lasting just over an hour. Much was expected from the budget which presented an opportunity to turn around public perception about the competency of this government. Here are some of the highlights.
• Stamp Duty abolished for first-time buyers purchasing homes up to £300,000.
• Commitment to build 300,000 new homes every year.
• House building investment to receive an extra £15.3 billion over a five-year period.
• Increase of the tax-free personal allowance by £350 at the lower threshold up to £11,850 and by over £1,000 at the higher threshold up to £46,350.
• An extra £6.3 billion for the NHS.
• £1.7 billion for local transport development across urban England.
• Investment in education, specifically maths, computer sciences, and T-levels.
• An extra £1.5 billion for Universal Credit with further amendments to its structure.
• Increase in the National Living Wage for over 25s to £7.83.
• Increasing duties for “white ciders” – strong but cheap alcohol.
• New railcard for 26-30-year olds.
• Economic growth rates revised to below the expected 2%.
• £3 billion reserved, over the next two years, in case of Brexit emergencies.
• Extra funding for Scotland, Wales and Northern Ireland.
• Continued business rate discounts for pubs
On funding, Hammond also proposed a crackdown on tax avoidance which he expected would raise just under £5 billion over the next five years. He also plans to introduce income tax on UK sales by online companies for the 2019-2020 tax year. However, he conceded this will only raise £200 million, leaving the obvious question about how the rest of his proposals will be funded.
A major theme of the Budget was technology. Realigning government investment to the computer age, Hammond has attempted to structure his budget around future needs. Emphasis on maths and computer sciences as key subjects to be encouraged at schools is backed by financial incentives for those schools getting pupils to sign up for maths. £500 million has also been reserved for various technological initiatives like driverless cars, artificial intelligence and 5G.
His closing remarks are indicative of this prospective approach;
“We are at a turning point in our history and we resolve to look forward not backwards . . . to build a country fit for the future”
Reaction to his budget has so far been expectantly mixed with a characteristic “well, it’s a start” point of view from many special interests issuing cautious welcomes to announcements in the Budget. An example is the Retailers Against VAT Abuse Schemes who reacted to the propositions on tax avoidance with caution, noting how although the government rightly promises to tackle these issues, they must wait for “the wording of the legislation” to judge its validity. Their emphasis however, continues to be on the need for enforcement rather than new legislation.
Labour have criticised the Budget as much as possible, declaring most of it inadequate, and London, according to Sadiq Khan, ignored. Some online readers of The Times have been critical of the need to reserve money for Brexit, others have cynically challenged the housebuilding promises whilst still others indicted the over-zealous reaction from Mr Corbyn and the Labour Party. The Guardian is expectantly critical, highlighting much of the negative reaction whilst George Osborne’s The Evening Standard will run with the headline “Bittersweet Budget”, a suitably mixed description for a decidedly mixed reception.