Today at lunchtime, Phillip Hammond – the Chancellor of the Exchequer – announced the 2017 Autumn budget in an hour-long speech. He revealed that growth has slowed and will continue to do so, and notably allocated a further £3bn to Brexit. Technology, housing and the NHS were allocated significant funds. Perhaps aware that the delivery of a finance-focused speech would be prone to dry moments, Hammond also allowed for some humour to slip through. Here, we’ve compiled the main points made – and some of the Chancellor’s jokes - into a digestible read.
- Hammond acknowledged that Brexit negotiations were at a critical point, and the impending exit from the European Union was the first point he addressed. He allocated a further £3bn to the £700m already spent on Brexit.
- He was keen to stress that the budget was “about much more than Brexit”.
Growth and deficit
- Hammond said that growth remains flat – the OBR has revised its prediction of growth at a rate of 2% to a rate of 1.5% in 2017, 1.4% in 2018, 1.3 in 2019 and 2020. It is predicted to rise to 1.5% then 1.6% in 2022.
- The deficit continues to shrink; Hammond said that next year it will be below 2%.
- Borrowing will be lower than it was forecast to be in spring – at £49.9bn, £8.4bn has been shaved off the original prediction.
- Borrowing is set to fall from £39.5bn next year, to £25.6bn in 2022-23. This will be the lowest level in 20 years.
- Debt will peak at 86.5%, but again is forecast to fall.
Research and Development
- £2.3bn allocated for R&D. Main R&D tax credit raised to 12%. Hammond aspires for R&D investment to be 2.4% of GDP.
- The chancellor acknowledged the pressure on the NHS. He responded by allocating £2.8bn to the NHS in England, with £350m of this being available to provide for winter. Overall, the service will receive a £7.5bn increase to its research budget over this and next year.
- The Chancellor placed Britain at the “forefront” of the technological revolution.
- £500m to be invested in technological initiatives, ranging from AI to 5G and full fibre broadband.
- Driverless vehicles got a special look-in, and Hammond cited it as a reason for investment in electric cars. £400m allocated to charging infrastructure, £100m allocated to the Plug-In-Car Grant, and £40m to the research and development of charging.
- Diesel cars will be subject to taxation until more environmentally friendly engines are manufactured. Vans will be exempt from company taxation, however.
- The above levy will contribute £220m for Clean Air Fund plans in local areas.
- Taxation on single use plastic items is to be investigated.
- The current 16-25 railcard leaves anyone in the latter part of their 20s in the lurch. But a new under 30s railcard looks set to change all that. While this will bring joy to the younger generation – who are currently saddled with a lot of financial burdens – it does highlight the extent of financial depravation and a large increase in rail travel costs.
- The fuel duty cost for petrol and diesel to be frozen.
- 3m apprenticeship starts by 2020
- £20m will be pledged to FE colleges to prepare for T-levels.
- Maths was an intense focus of the Chancellor’s educational outline. £40m has been provided to train maths teachers across the country, £600m Maths Premium will be allocated to schools where additional pupils take A level or Core maths.
- £30m will be invested in the development of digital skills distance learning courses – a leap in the direction of flexible learning for a variety of learners.
- There was a vague reference to industry in Hammond’s comment on “factory floors and business parks across this land”.
- The independent OBR forecasts 600,000 people in work by 2022. That’s a little under the 1.4 million people currently unemployed in the UK. Hammond also expressed pride on behalf of the government of having “created over 3 million new jobs”.
- National Living Wage will rise 4.4% from £7.50 to £7.83. However, the National Living Wage is not a legal requirement – only the national minimum wage.
- Seven day waiting period for Universal Credit to be removed. The repayment period for advances will be extended from six months to 12.
- £1.5bn allocated to universal credit delivery in general.
- Hammond expressed the Government’s willingness to deliver for “all parts of our United Kingdom”.
- The Northern Powerhouse proposed by Osborne may not be a dead dream, with Hammond allocating £1.7bn to transforming cities. Half will be given to metro mayors so they can deliver on local transport.
- £1bn discounted lending will be made available to local authorities for high-value infrastructure projects.
- Scotland, Wales and Northern Ireland will also be granted funds: £2bn was allocated to the Scottish govt; £1.2bn for the Welsh govt and £650m for a Northern Ireland Executive.
- The Chancellor opened his speech on the housing market by announcing that £28m would be allocated to dealing with the aftermath of the Grenfell Tower Fire – specifically, this money is to be used for mental health services, regeneration support, and a community space for the Grenfell United group. He urged local authorities unable to pay for essential fire safety work to contact the government immediately.
- Empty properties were also at the forefront of Hammond’s housing segment. Local authorities are to be granted the right to charge a 100% council tax premium on homes that stand empty.
- To combat rough sleeping in the West Midlands, Manchester and Liverpool, Hammond has allocated £28m.
- To tackle the crisis in the housing market, Hammond has pledged at least £44 bn capital funding, loans and guarantees.
- Notable allocations include £2.7bn for the Housing Infrastructure Fund; £400m for estate regeneration, and £1.1bn to unlock strategic sites.
- Stamp duty will be totally abolished for all first-time buyer purchases up to £300,000, and on the first £300,000 on property purchases up to £500,000 in expensive areas such as London.
- Hammond opened the economic and fiscal part of the speech with “This is the bit with the “long, economicky words”.
- Hammond said of driverless vehicles “I know Jeremy Clarkson doesn’t like them” but quipped that it wouldn’t be the first time he was blindsided by “Hammond and May”.
- When announcing the spate of funds allocated to mathematical developments, Hammond said: “More maths for everyone. Don’t let anyone say I don’t know how to show the nation a good time”.
- Hammond announced a price drop for whisky by £1.15 less, and a pint of beer would have 12 shaved off its cost. He concluded this announcement with “So, Merry Christmas, Mr Deputy Speaker”.