Chancellor Announces A Budget To Make Britain ‘Fit For The Future
In his Autumn Budget speech, Chancellor Philip Hammond promised a Britain ‘fit for the future’ as an outward-looking, free trading nation, and introduced a series of measures to help bolster the economy.
The second Budget of the year, following the switch from the traditional Spring Statement to a new Autumn announcement, it was aimed at allowing Britain to ‘seize the opportunities from Brexit’ and build a prosperous and inclusive economy, said the Chancellor.
The Budget revealed lower economic growth and productivity than previously forecast, although it remained an economy that confounded commentators with its robust performance, said the Chancellor.
The Office for Budget Responsibility revealed that economic growth for this year was now expected to be 1.5% rather than the 2.0% previously forecast, while next year it was forecast to fall to 1.4% and to 1.3% in 2019. However, employment was at record levels and unemployment, at 1.4m people, at an 11-year low.
The Budget speech also tackled the subject of Brexit and the challenges and opportunities the UK will face over the coming years. Another £3 billion was being set aside over the next two years to ensure the country is prepared for every outcome, said the Chancellor.
There was a raft of measures designed to bolster various sectors of the economy. These included:
• a rise in the minimum wage to £7.83 from April
• the abolition of stamp duty for first time buyers on properties under £300,000
• an extra £10 billion of capital investment in the NHS
• a freeze on duty on wine, beer and spirits
• an increase in the personal allowance to £11,850
• an increase in the 40% payers’ threshold to £46,350.
Support For Small Businesses
UK businesses welcomed the move to prevent steep increases in business rates, following a sharp rise for many firms in April this year. This had been the first revaluation for seven years and resulted in some significant increases. By moving to a more frequent revaluation – rates to now be assessed every three years – this should make changes more gradual.
The Chancellor also announced a change to the way rate increases are calculated, with rate rises to be in line with the lower Consumer Prices Index (CPI) measure of inflation, rather than the Retail Prices Index (RPI), from April.
“Staircase Tax” To Be Scrapped
SMEs also stand to benefit from a promise of legislation to scrap the so-called “staircase tax”. This “tax” meant that businesses in offices which are spread over more than one floor but within the same property were assessed as occupying more than one property – and charged business rates as such.
These bills were backdated to 2015 following a ruling in the Supreme Court and resulting in substantial cost increases for small businesses. Today the Chancellor stated that he would change the law, reinstate the original bills and refund extra money paid since the ruling.
There were also a number of initiatives aimed at boosting the automotive sector and motorists in general.
A Freeze On Fuel Duty
For the eighth year in a row, the Chancellor has stated that fuel duty on petrol and diesel would remain frozen. This makes the current fuel duty freeze the longest for 40 years.
New Tax Plans For Diesels
Drivers and businesses with company cars should note that extra taxation on older, more polluting diesel cars will be introduced from next April.
From April 2018, the first year rate for Vehicle Excise Duty for all new diesel cars that do not meet emissions target will go up by one tax band, while the diesel Benefit-in-Kind surcharge of 3% will be increased to 4%.
These two new initiatives will apply to cars only, and not to vans, lorries or heavy goods vehicles.
Also exempt from the increase are the next-generation clean diesels – those which are certified as meeting emissions limits in real driving conditions, known as Real Driving Emissions Step 2 (RDE2) standards, under the new EU testing regime.
Public Transport And Other Investment
The Chancellor also announced a further £500 million investment “in a range of initiatives from artificial intelligence, to 5G and full fibre broadband”.
There will also be a new £1.7 billion Transforming Cities Fund to help local governments grow their public transport infrastructure.