Philip Hammond outlined his first (and last) Budget, in an aim to create a “stronger, fairer, more global Britain” by building an “economy that works for everyone”.
In coherence with International Women’s Day, Hammond celebrated the fact that there are now a higher proportion of women in the workforce than ever before. Since February 23rd, there are also a higher number of women in the Conservative party too.
Hammond outlined how the Office for Budget Responsibility has raised it’s economic growth forecasts for this year – expecting the UK economy to grow 2 per cent rather than 1.4 per cent. In 2018, it was said that growth is forecast to slow to 1.6 per cent, picking up to 1.7 per cent, then 1.9 per cent, and back to 2 per cent in 2021.
Furthermore, OCR predict inflation to peak at 2.4 per cent this year, which will fall to 2.3 per cent in 2018 and 2 per cent in 2019.
The Chancellor shared that Britain has a debt of nearly £1.7 trillion and that £50 billion is being spent on debt interest each year. He stated to continue with the current plan and remain “undistracted by reckless policies advanced by the opposition”.
Debt will begin to fall in 2018-19 for the first time in 20 years, the Chancellor said, eventually falling to 79.8 per cent in 2021-22.
Hammond aims for the UK to be the “best place in the world to start and grow a business” and consequently addressed the concerns around business rates. He shared that the rates cannot be abolished due to the fact that the tax brings in £25 billion a year. Hammond did outline three measures that will be going ahead to help those of concern:
- Any business coming out of small business rate relief will have increases capped at £50 a month.
- The valuable role of pubs has been highlighted as 90 per cent of them will have a £1,000 discount on their business rates bill.
- A £300 million fund for local authorities to offer discretionary relief to cope with hard-hit cases.
This accumulates a total of £435 million cut in small business rates.
The Chancellor attempts to tackle the issue of tax avoidance by addressing the abuse of foreign pension schemes as well as introducing UK VAT on roaming telecoms services.
With the employed and self-employed using the public services in the same way, but not paying in a mirroring manner, Hammond wanted to address this issue as he shared the concern that self-employed workers are forecast to cost public finances £5 billion this year alone. He stated that to create a “fairer” tax system, the self-employed National Insurance contribution will rise by 1 per cent to 10 per cent from April next year. It will further rise by 1 per cent a year later.
A total net of £145 million a year will be raise in consequence, equating around 60p a week that every self-employed pays for the public services.
To tackle health, Hammond is introducing a new minimum excise duty on cigarettes, based on a pack price of £7.35.
Moreover, Hammond highlighted “good news for our children” as the sugar tax on soft drinks will raise less than expected due to the fact that producers are removing more sugar out of their drinks.
Complying with the Conservative manifesto, the threshold at which workers pay income tax will rise to £12,500 a year by 2020 and by that time, the 40 per cent tax rate will not fall into place until £50,000. National living wage will also be rising to £7.50.
Reinforcing the point Theresa May previously stated, a further £20 million will be additionally funded into tackling domestic violence – totalling a £100 million government spend on the issue.
Hammond shared that tampon tax receipts to fund a further £12 million for women’s charities.
£5 million to returnships to the public and private sector will help people back into employment after a career break, in which is expected to mainly affect women, the Prime Minister highlighted.
Addressing transport, Hammond stated that £90 million will be allocated for the North, £23 million for the midlands from a £220 million fund that addresses the national road network and £690 million for local authorities to tackle urban congestion.
“Will our children enjoy the same opportunities that we did?” Hammond asked to his fellow MPs. There will be a creation 110 new schools and £216 million invested into existing schools to repair and rebuild school buildings. Claiming that “choice is key to excellence in education” the Chancellor also stated that “travel can be a barrier to exercise that choice”. Therefore, all pupils on free school meals will also be able to receive free travel to selective schools.
There are currently 2.4 million apprenticeships which is expected to further to 3 million by 2020.
The Chancellor stated that £500 million a year will be spent to support technical education for 16-19 year olds. The introduction of T-Levels will replace 13,000 qualifications with just 15. The number of hours training for 16-19 year old technical students will increase by over 50 per cent and the new qualifications will include a three month work placement for every student to equip them better for future employment.
Addressing social care, the Hammond said there would be a £2 billion fund into social care in England over the next three years, the first billion in which will be available in 2017/18. He promised that there will also be a green paper on social care.
It was also announced that £100 million will be spent to place GPs in accident and emergency departments by next Winter, to help with workload and waiting times.