This has been an unusual Budget — moved to a Monday from its traditional Wednesday reportedly because the Chancellor’s advisers thought delivering it on Halloween would lead to some scary headlines.
It also comes exactly six months before the UK is set to leave the EU and with a warning that a disorderly Brexit could mean that Philip Hammond (or his successor) will have to scrap these plans and prepare a completely new Budget.
Although that remark by the Chancellor was promptly contradicted by Number 10 with a commitment that all spending set out in the Budget will be delivered “irrespective of a deal” on Brexit.
So what has Philip Hammond announced (apart from a plan to enable weddings to take place in the open air, which we can probably ignore)?
The MoD is to receive another £1 billion to boost cyber capabilities and anti-submarine warfare capacity.
Having already allocated £2.2 billion to departments for Brexit preparations, in the Autumn Budget last year the Chancellor set aside a further £1.5 billion to be allocated for 2019–2020. He has now increased that sum to £2 billion.
The Government plans to abolish the use of the private finance initiative (PFI) for future projects.
A £400 million “in-year bonus” will mean an average of £10,000 for every primary school and £50,000 per secondary school “to help our schools buy the little extras they need…”
The Government will provide £60 million for planting trees in England. There will be a new tax on imported plastic packaging that includes less than 30% recyclable plastic but no tax on disposable plastic cups. The Chancellor will also allocate £10 million for waste disposal.
Growth going forward will be “resilient”, Mr Hammond predicts, improving next year from the 1.3% forecast in the Spring Statement to 1.6%. In 2020, he expects 1.4%, then 1.5% in 2021 and 2022 and 1.6% in 2023. However, the Chief Economist at the Institute for Public Policy Research (IPPR) immediately tweeted that these figures are “dismal”.
A further £500 million for the Housing Infrastructure Fund aims to unlock 650,000 homes. The Chancellor will empower up to 500 neighbourhoods to buy land for housing for sale to local people in perpetuity. The cancellation of stamp duty for first time buyers on properties up to £300,00 will be extended (retrospectively) to first-time buyers of shared ownership properties valued at up to £500,000.
The Government will provide £200 million to the British business bank to replace EU investment bank money if needed.
English councils will receive £650 million extra in 2019/20 for social care and £84 million will be invested over five years to expand programmes for children in care to another 20 councils. There will be an additional £45 million for the disabled facilities grant in England in 2018–2019.
Within the extra money it receives, the NHS will be expected to provide a new mental health crisis service with comprehensive mental health support available in every major A&E. Children and young people’s crisis teams will be available in all parts of the country, the Chancellor promised. Money will also be supplied to meet veterans’ mental health needs.
The Chancellor confirmed the announcement by the Prime Minister several months ago of a £25 billion real terms increase for the NHS in the UK. However, the NHS must publish a 10-year plan for reform (due in the near future).
Home Secretary Sajid Javid will review police spending power when he announces the police settlement in December.
Recognising that the businesses are under real pressure, £675 million co-funding will be available to support councils looking to redevelop their high streets. For the next two years, up to the next rates revaluation, the business rates bill will be cut by one-third for up to 90% of small shops, restaurants and cafes (those with a rateable value of less than £50,000). There will also be a business rate relief for public lavatories.
Councils will receive £420 million to help deal with potholes and repairs to bridges.
For smaller firms taking on apprentices, the amount they have to provide will be halved from 10% to 5%.
The annual investment allowance will be increased from £200,000 to £1 million for two years… VAT threshold unchanged… IR35 rules will be applied to private sector organisations but not until April 2020 and only to large and medium-sized businesses… the UK will introduce a digital services tax aimed not at consumers but at the tech giants such as Amazon and Facebook (those generating at least £500 million per year globally)… in April 2019 the tax threshold will rise, one year earlier than planned, to £12,500 (and the higher rate to £50,000).
Fuel duty will be suspended for the ninth year, as already announced.
The Chancellor will make available £1 billion over five years to help with the transition to Universal Credit. He will also increase work allowances (the amount people can earn before they start to lose benefit) by £1000 per annum.
The Government will talk to employers and unions next year about a new remit for the Low Pay Commission (LPC). From April the National Living Wage (NLW) will rise by 4.9%, from £7.83 to £8.21.