The chancellor, Philip Hammond, has unveiled the budget. These are the main points, with political analysis
- Autumn budget 2017: reaction and analysis – live
Stamp duty
- Abolished for first-time buyers on homes up to £300,000, and on the first £300,000 of properties up to £500,000.
Rowena Mason, deputy political editor: This will please many looking to buy their first home. But it is hard to see how it will increase supply. It is likely to help those in the south-east the most, and may just stimulate the slowing market again.Housing
- 100% council tax premium on empty properties.
- £28m in three new housing pilot schemes – in the West Midlands, Manchester and Liverpool – to halve rough sleeping by 2022 and eliminate it by 2027.
- £44bn of capital funding to help build 300,000 homes annually by mid-2020s.
- New money for homebuilders fund.
- £630m ‘small sites fund’.
- £8bn of financial guarantees to support private housebuilding.
- £2.7bn housing infrastructure fund.
- £1.1bn for new urban regeneration.
- £34m to train construction workers.
- A review to be chaired by Oliver Letwin to look at ways to speed up planning permission.
- Five new garden towns.
- One million new homes on the Cambridge-Milton Keynes-Oxford corridor by 2050.
RM: Hammond’s package goes further than what he promised over the weekend, pledging £44bn in capital funding to help meet his pledge of 300,000 homes annually by 2020. He is also issuing a threat to developers that their days of landbanking are over, as he hit out at those who do not build on plots that have already been granted planning permission. The chancellor only promises a review but does not rule out direct action.Rent
- £125m of funding over the next two years to help 140,000 people.
RM: This is only a small package for renters compared with the billions being spent on encouraging housebuilding. It is targeted at those on low incomes and receiving housing benefit in areas where rents are rising the most, thereby handing more money to landlords.Universal credit
- £1.5bn to remove seven-day waiting period; new claimants in receipt of housing benefit will get it for two weeks.
RM: This is a partial victory for those campaigning against the injustices of the universal credit system leaving many in hardship. It is an expensive move – reducing the waiting time of claimants by one week, make advances quicker and give people housing benefit for longer to avoid the threat of evictions while they wait for universal credit. Tory MPs are likely to be appeased but Labour may well think this does not go far enough, considering many claimants have been left waiting for six weeks for their first payments.Brexit
- £3bn set aside for Brexit preparations.
RM: This is a big boost to the £700m previously allocated for preparations. It will be seen as a victory for those hard Brexiters pushing for more money to get ready for the possibility of leaving the EU with no deal. But critics of Brexit are likely to seize on the large sum, which could otherwise have been spent on improving public services. Voters were also promised that leaving the EU would save them money, not cost more.Economic growth
- Revised down to 1.5% in 2017 from 2%.
- Forecasts are 1.4% in 2018, 1.3% in 2019, 1.3% in 2020, 1.5% in 2021 and 1.6% in 2022.
- In March the forecasts were 1.6% in 2018, 1.7% in 2019, 1.9% in 2020 and 2% in 2021.
RM: It is nearly all bad news on the economic front. Growth is lower than expected and productivity still poor. Hammond does not say why the economy will slow for the next three years but there will be inevitable links to the uncertainty caused by Brexit.Government borrowing
- £49.9bn this year, down by £8.4bn from the previous forecast.
- Down from £39.5bn next year to £25.6bn in 2022-23.
RM: Hammond says he is not resiling from efforts to bring down the UK’s deficit and debt, as he still wants to balance the books like George Osborne. But he is slowing the pace of reducing the deficit so borrowing will reduce less rapidly than forecast in March.NHS
- £10bn capital investment in frontline services over the course of this parliament.
- £2.8bn of extra funding for England.
RM: The chancellor is giving an extra £2.8bn to the NHS – which falls short of the £4bn demanded by Simon Stevens, the chief executive of NHS England. As expected, Hammond commits to £10bn on capital expenditure in the health service.Living wage
- Up to £7.83 an hour, from £7.50.
RM: The Conservatives say this will give the lowest-paid workers a rise of about £600 a year but it is still below the real living wage of £8.75 and Labour’s promise to raise it to £10.Income tax
- Basic rate rises to £11,850 from April; 40% threshold increases to £46,350.
- Chancellor has previously pledged to increase basic rate to £12,500 by 2020.
RM: The rise in the basic rate income tax threshold is in line with the Conservatives’ pledge to increase it to £12,500 by 2020 and the higher rate threshold – the point at which you start paying 40% tax – to £50,000 by 2020.Electric cars
- £400m for charging infrastructure fund.
- Those charging electric vehicles at work will not face taxes.
RM: The chancellor seems very keen on boosting new technologies, although quite a niche one as electric cars are driven by a minority of people at the moment.Diesel cars
- 1 percentage point increase in company car tax.
- From 2018, an increase in tax on cars that don’t meet standards – to go up by one band.
- Proceeds to fund £220m clean air fund.
RM: Hammond promises that he is not hammering white van man or woman, mindful of how his budget will be received by headline writers at the Sun. The increase in vehicle tax also only applies to new diesel cars from 1 April, so existing owners who were encouraged to buy diesel by previous governments will avoid being penalised.Education
- Maths: £40m for maths teachers; £600 premium for schools for each student taking A-level maths.
- Computing: triple number of science teachers to 12,000; new national centre for computing.
- National retraining scheme for digital expertise.
RM: This announcement is covered in the fingerprints of Hammond’s deputy, Liz Truss, who has long spoken about the need to focus on maths, science and the quality of teaching.Northern powerhouse
- £1.7bn transforming cities fund.
RM: It seems May’s government has not abandoned Osborne’s northern powerhouse after all. The announcement is about better connecting prosperous city centres with their suburbs.Scotland, Wales and Northern Ireland
- £650m extra for Northern Ireland.
- £2bn extra for Scotland.
- £1.2bn extra for Wales.
RM: This is not too much to get excited about, as it is just the consequences of the Barnett formula being applied to this budget. The only new bit specific to Scotland is that the government will legislate to allow Scottish police and fire services VAT refunds from April 2018.Oil
- Tax changes to encourage investment; ‘Transferable Tax History’ for oil and gas fields in the North Sea.
RM: This is a straightforward tax break for North Sea oil producers, slightly undermining the chancellor’s earlier green rhetoric about electric cars and taxing plastics.Duties on spirits, wine and beer
- Frozen.
- A new tax band for still cider and perry with alcohol content between 6.9%-7.5% to target white cider.
RM: This one got a huge cheer from the backbenches. ‘Happy Christmas, Mr Deputy Speaker,’ Hammond adds.New railcard
- 4.5 million people aged 26-30 to get a third off rail fares.
RM: Hammond has been under pressure to appeal to younger voters after they turned to Labour in their droves at the election. However, some have questioned whether such an obvious handout will tempt those in their 20s back to the Conservatives and highlighted the risk that it could annoy those in their 30s who also turned to Labour.Airlines
- Increase on air passenger duty on premium-class tickets.
RM: The chancellor turns to wealthier first-class passengers and those who travel by private jet to fund a freeze in air passenger duty, which airline bosses have long been complaining makes them uncompetitive.Grenfell Tower
- £28m for mental health services and local regeneration for Kensington and Chelsea council.
Fuel duty rise
- Cancelled.
RM: Every year Conservative MPs lobby against further rises in fuel duty and this year the chancellor has given in once again – at a time of rising petrol and diesel prices.Tax avoidance
- Measures to raise £4.8bn by 2022-23.
RM: It is the most predictable element of any budget: pledges by the chancellor to raise money from cracking down on tax avoidance.Business rates
- £2.3bn cost to bring forward the change to Consumer Prices Index from Retail Prices Index by two years to 2018.
- After next revaluation, future revaluations to take place every three years rather than five.
- Staircase tax: businesses hit will have original bill reinstated.
- Discount for pubs (rateable value less than £100,000) extended by one year to March 2019.
VAT
- Consultation on threshold of £85,000 at which small businesses pay VAT.
RM: Hammond shies away from the controversial move of lowering the threshold at which businesses start having to charge VAT, which would no doubt have been characterised as a tax on small tradesmen and women. Instead, he goes for the old trick of launching a consultation on the difficult issue.Digital tax
- £200m a year extra from income tax on UK sales.
- Target £1.2bn a year in lost VAT from online shopping.
RM: This is an attempt to raise money from digital retailers to level the playing field between them and high street shops, but the £200m revenue is not huge.Research and development
- £2.3bn of investment.
- Increase tax credit to 12%.
- £500m for artificial intelligence and 5G initiatives.
RM: The chancellor is focusing on scientific investment as he tries to pitch this as a ‘forward-looking’ budget. It involves tax breaks for spending on research, even though these have been criticised by the IPPR thinktank for subsidising investment that would have happened anyway.- Investigate charges on plastic waste.
RM: This is a potential revenue raiser for the Treasury, after a string of media stories about the wastefulness of items such as coffee cups, plastic bags, food wrappers, straws and drinks bottles. This is only a consultation though, so could take a while to flow through.
- £20bn of new investment in UK knowledge-intensive industries.
- £2.5bn for the British Business Bank.
- Encourage pension fund investment.
- Boost to Enterprise Investment Scheme.
- Replace funding from Europe.
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