News Item: DeHavilland Release Budget 2018 Summary

 

Following the 2018 Budget statement, DeHavilland has produced a summary which includes the key announcements from the speech.

DeHavilland summary of Mr Hammond's speech

The “era of austerity” was coming to an end, Chancellor Philip Hammond announced this week.

Delivering his Budget Statement in the House of Commons, Mr Hammond:

  • Announced a “budget for Britain’s future”, moving beyond austerity for “hardworking families”.
  • Expressed a desire to minimise the amount of tax taken out of workers’ wage packages.
  • Added that this budget would “pave the way for a brighter future”, now that the Conservative Party had dealt with the economic “failure” of the Labour Party.
  • Declared the “era of austerity” as coming to an end.
  • Assured the House that he was looking ahead to the challenges of the future, including dealing with aftermath of the recession.
  • Hailed the Conservative economic record of eight years of economic growth, 3m more people back in work and delivering an economy that worked work everyone.
  • Said the “stakes could not be higher” in the EU negotiations and announced the increase in extra funding for DExEU up to £2bn.
  • Raised the possibility of a “double-deal-dividend” should Brexit negotiations conclude well.
  • Retained “firepower” to intervene should the economy need support in months ahead.
  • Would consider upgrading the Spring Statement to a “full fiscal event” should it be required.
  • Said the OBR expected growt to be “resilient” and improve to 1.6% next year, 1.4% in 2020-2021, 1.5% in 2022, and 1.6% in 2023.
  • Added the best way to help people was to provide them with “stability”.
  • Noted that more than 3.3m people had entered in to work since 2010, and pointed to positive predictions from the OBR for future job creation.
  • Said that there had been higher than average wage growth in recent years, and that the OBR expected “sustained real wage growth” for each of the next five years too.
  • Explained that the deficit was down almost 10% from when his Party took over and now stood at less than 1.4% of GDP, with it set to fall to just 0.8% of GDP by 2023-4.
  • Added that borrowing was now £11.6bn and set to fall to just £9.8bn by 2023-4.
  • Said the Government would meet its structural borrowing target three years early and would deliver borrowing of just 1.3% of GDP in 2021.
  • The OBR also confirmed that national debt peaked in 2016-17, and fell in every year since then, down to 74.1% in 2023-24.
  • Added that the Government borrowing would be lower in every year than had been forecast in the Spring Statement.
  • Claimed Labour’s plans would increase public spending by £1trn and affirmed his belief in “sound public finances”.
  • Said the Government had put an additional £60bn into public services, cut taxes and brought the deficit down.
  • Announced that the OBR confirmed a “significant improvement” in public finances.
  • Stated that a full Spending Review would be conducted in 2019.
  • Set out a five year-path for public spending, stating that, from next year, average annual real growth would be at 1.2%.
  • Expected any deal-dividend would lead to further funding for the spending review.
  • Confirmed the NHS would receive it’s £20bn funding over five-years.
  • Continued by saying that frontline improvements should be the focus, as per the NHS’s 10-year plan which would be published shortly.
  • Confirmed that the NHS would receive a Mental Health Crisis Service, with help in every A&E and part of the country, with more mental health ambulances, safe havens, and a 24h hotline, all as part of the Plan.
  • Stated that departmental spending allocations would be settled at the Spending Review in the main, but revealed that local government would be given greater control over the money they raised.
  • Spoke about the Green Paper on social care: announcing an additional £650m of grant funding for English local authorities in 2019 and £85m over five years for children's social care programmes across 20 councils.
  • Announced that he would be giving an additional £1bn in funding to defence, alongside the review of defence spending due next year, including boosting cyber capacity and anti-submarine deterrents.
  • Also unveiled additional £160m for counter-terrorism policing for 2018/19 to preserve numbers ahead of the Spending Review.
  • Acknowledged pressures on policing spending and detailed how Home Secretary Sajid Javid would review police spending priorities ahead of next year’s CSR.
  • Noted public borrowing was below forecast, which would allow further public spending.
  • Committed the Treasury to donating £10m from VAT amounts to the Armed Forces Covenant Fund Trust to support veterans’ mental health to mark the WW1 centenary.
  • Added that grants equivalent to VAT would be given to corresponding refurbishment projects, alongside an extra £1.7m in funding for schools to mark the liberation of Bergen Belsen.
  • Stated that school budgets would receive a £400m bonus in the form of a one-off capital payment, equivalent to £10,000 for primary and £50,000 for secondary’s.
  • Said that £420m would be made available to local highway authorities for road maintenance.
  • Turned to the economy at large and the need to increase productivity, saying that Britain should “once against rule the world” through its R&D, announcing £1.6bn for new investments as part of the Industrial Strategy and £150m for internal research fellowships. He added that the National Productivity Investment Fund’s budget would rise to over £38bn by 2023-4.
  • Declared that public investment would be £46m higher a week than under Labour and declared that half of it would come from the private sector.
  • Said the Government would not terminate existing Private Finance Initiative (PFI) contracts to risk the “ruinous” penalty clauses, but would instead honour exist contracts.
  • Announced he would “never sign off” on a PFI contract.
  • Announced a package of measures to stimulate investment in the UK post-Brexit, including increasing the Annual Investment Allowance to £1m for two years.
  • Added targeted relief and tax relief measures to this end.
  • Supported an increase in UK Export Finance’s (UKEF) lending facilities.
  • Opened the use of ePassport gates to include visitors from the US, Canada, New Zealand, Australia & Japan
  • Backed the establishment of a British Business Bank to replace the European Investment Bank if needed.
  • Extended the new enterprise allowance to help entrepreneurs.
  • Worked with the Financial Conduct Authority (FCA) to expand access to the Ombudsman for larger SMEs.
  • Announced that smaller firms would now contribute only 5% to apprenticeships, going on to say that there was now a total package of £695m for apprenticeships.
  • Said that the flat rate employment allowance was not an incentive for larger employers.
  • Recommitted to keeping, family homes out of capital gains tax.
  • Stated that entrepreneurs’ relief would be retained, but with the qualifying period extended to two years from its current 12 months.
  • Announced that the threshold for VAT would remain untouched for two years.
  • Announced he would be introducing a digital services tax for platforms including Google, stressing that there had been slow progress in reaching international agreement. It would be targeted narrowly on the UK profits of establish tech giants, as opposed to small companies.
  • Explained how only digital tech businesses with £500m in global profits would pay the digital tax and that the Treasury would consult on the measure. Added it would come into effect in 2020 and generate £400m in revenue. If international agreement was reached at the OECD, then it would supercede the UK digital services tax.
  • Wished to raise £2bn over the next five years through tax avoidance measures.
  • Announced a crackdown on routing insurance schemes offshore to avoid tax.
  • Recognised that high streets had suffered from rapid technological change and so wished to support them by providing £675m through a future high street fund for local authorities.
  • Announced a consultation on modernisation of the use-classes order and the Compulsory Purchase Order (CPO) regime to facilitate the transformation of the high street.
  • Said that small retail businesses were struggling to cope with business rates, and thus committed to a one third cut in business rates for two years of for all companies with a rateable value of £51,000 or less.
  • Stated that the local newspaper discount would also be extended by a year.
  • Said that there would be mandatory business rate relief for public lavatories.
  • Said that over 121,000 first-time buyers had benefited from the Government’s Stamp Duty relief and extended it to cover shared ownership properties up to £500,000, adding it would apply to those properties since the last Budget.
  • Declared there would be more money for the Housing Infrastructure Fund, £500m in total, as well as other measures including funding to all local authorities to free up money for developments.
  • Announced further money to support regional devolution for the Northern Powerhouse and the Midlands, including more money for Catapult Centres and the development of the Defence and National Rehabilitation Centre near Loughborough.
  • Backed a new special economic area in South Tees.
  • Provided £20m for the critical central section of East-West rail between Oxford & Cambridge.
  • Would improve the Docklands Light Railway with an increase in funding using the Housing Infrastructure Fund.
  • Announced further funding for City & Growth deals, noting negotiations were ongoing for further inclusions.
  • Announced funding for school projects in Northern Ireland worth £350m.
  • Said headline tax rates would be maintained to support Scotland’s oil & gas industry.
  • Noted a £12m investment in fisheries technology post-Brexit.
  • Expressed a desire to make the next generation more prosperous than the present one, announcing a package of measures for the environment, including a £10m fund for waste disposal.
  • Announced a new tax on the manufacture and import of plastic packaging that contained less than 30% recyclable packaging, subject to a consultation on the detail.
  • Added that he had looked at a levy on disposable plastic cups, had decided against this, but would continue to monitor the case for such a charge.
  • Announced that fuel duty would be frozen for a ninth year, whilst tobacco duty would rise by inflation plus 2%, whilst beer, cider and spirit duties would all be frozen.
  • Added that duty on wine would rise by the Retail Price Index (RPI), whilst white ciders would see a duty increases.
  • Set out how the short haul rate of Air Passenger Duty would stay the same, whilst the Youth Railcard would be rolled out to 4.6m 26 to 30-year-olds.
  • Announced an extra £1bn for Universal Credit over five years to aid the transition, and introduce additional protections for claimants. Added work allowance would increase under Universal Credit by £1,000 per annum.
  • Announced that there would be a 4.9% rise in the national living wage next year.
  • Accepted the recommendations of the Low Pay Commission regarding the national minimum wage rates, particularly on those in working schemes.
  • Committed to increasing the personal income tax allowance to £12,500 and the higher rate threshold to £50,000 from April 2019.
  • Said the Personal Allowance would rise to £12,500 for lower rate payers, one year earlier than the Conservatives’ manifesto commitment. Claimed it would mean £130 tax cut for the average taxpayer and that the average work of the British people was paying off.