Budget 2017

Wednesday, 8 March, 2017

Westminster News

Key OBR forecasts:

The UK economy is forecast to grow by 2 per cent in 2017, up from 1.4 per cent forecast in November.
Real wages are forecast to rise in every year to 2020-21.
The deficit is forecast to fall to 2.6 per cent of GDP in 2016-17, and to 0.7 per cent in 2020-21 – the lowest in over two decades.
Debt as a proportion of national income is forecast to begin falling in 2018-19 – the first fall since 2001-02.

Strong Economy – preparing for our future outside the EU

Controlling public spending.

Britain has a debt of nearly £1.7 trillion – almost £62,000 for every household in the country. Each year, the UK is spending £50 billion on debt interest – more than we spend on defence and policing combined.

This Budget makes progress towards eliminating the deficit. As part of a balanced approach, the Government will retain flexibility within its fiscal rules to ensure our economic resilience.

Making Britain the best place in the world to do business.

In 2010, Corporation Tax was 28 per cent. Today it’s 20 per cent, and it will fall to 17 per cent by 2020 – sending the clearest possible signal that Britain is open for business.

The Government has listened to the concerns raised by business about the effects of the business rates revaluation. The Government has already committed to a £6.7 billion package to cut business rates, and £3.6 billion in transitional relief.

The Government will go further with a £435 million package, meaning businesses coming out of Small Business Relief will have their increases capped at £50 per month in 2017-18; all pubs with a Rateable Value of under £100,000 – 90 per cent of all pubs – will see a £1,000 discount on their 2017 Business Rates bill; and local authorities will receive a further £300 million to target individual hard cases in their areas.

Making sure everyone pays their fair share of tax.

Since 2010, the Government have secured £140 billion in additional tax revenue by taking bold action to tackle avoidance, evasion and non-compliance.

In this Budget the Government has said it will go further, with measures that will raise an extra £820 million by 2021 by stopping businesses reducing their tax bill by converting capital losses to trading losses; shutting down abuse of foreign pension schemes; and introducing a tough penalty for professionals who enable a tax avoidance arrangement later defeated by HMRC.

Ensuring people have the skills they need to succeed in a global Britain

Investing in technical education.

Today the Government has announced an ambitious post-16 education reforms. The Government will provide funding to increase the number of training hours for 16-19 year old further education students by over 50 per cent, with 15 new technical routes and a high-quality work placement for every student.

Once this programme is fully rolled out, the Government will be investing an additional £500 million a year in our 16-19 year olds, giving them the technical skills they need to succeed in the world of work, and giving businesses the edge they need to compete in a new, global Britain.

Giving more children the chance to go to a good or outstanding school.

The Government are investing more than ever before in our schools, and there are 1.8 million more children taught in good or outstanding schools than in 2010.

This Budget announces funding for a further 110 new free schools, on top of the current commitment of 500, alongside an additional £216 million over the next three years to look after our existing schools, taking total investment in school condition to well over £10 billion in this Parliament.

And the Government are doing more for the most disadvantaged. This year alone, the pupil premium will be worth £2.5 billion to support pupils from disadvantaged backgrounds. This Budget will further help the most disadvantaged pupils access the best schools by extending free transport to every child entitled to a free school meal to selective schools.

Supporting lifelong learning.

The Government knows the importance of lifelong learning. So it will invest up to £40 million to help adults re-train and up-skill throughout their lives, building on its plan to deliver a fairer and more productive Britain that works for everybody.

Supporting ordinary working families in their aspirations for a better life for themselves and their children

Supporting our NHS and making sure everyone has dignity in old age.

The Government's social care system cares for over a million people, and this in turn puts pressure on the NHS. That is why the Government has already delivered more than £7 billion extra spending power to the system over the next three years, and is ensuring local authorities work more closely with the NHS.

But this Budget goes further, committing additional grant funding of £2 billion to social care in England over the next three years, and £400 million between Scotland, Wales and Northern Ireland, with new measures to support more joined-up working in the worst-performing authorities. Alongside that, the Government will make a further £100 million available immediately for up to 100 new triage projects at A&E in English hospitals in time for next winter.

This will provide immediate benefit to our NHS, and stands alongside our commitment to deliver a £10 billion real terms increase in annual NHS finding by 2020.

Helping working families with the cost of living.

Last year the Government delivered a pay rise to a million of the lowest paid with the National Living Wage, which will rise again to £7.50 in April – an income boost of over £500 for a full time worker this year.

The personal allowance will rise for the seventh year in a row, benefitting 29 million people and meaning a typical basic rate taxpayer will pay a full £1,000 less income tax than in 2010. The higher rate threshold will rise to £45,000, and savers will have access to the new NS&I bond announced at the Autumn Statement. And the Universal Credit taper rate will be reduced from 65 per cent to 63 per cent – a tax cut for 3 million families on low incomes.

And the Government will do more to help families with the cost of childcare. With the roll-out of its Tax-Free Childcare policy and the doubling of free childcare for working parents with three or four year olds, a young family with a three year old and both parents working will receive free childcare worth around £5,000 a year from September.

Protecting consumers when markets fail.

A well-functioning market economy is the best way to deliver prosperity and security for working families. But sometimes markets can fail people.

So the Government will bring forward a Consumers and Markets green paper, to tackle some of the frustrations that sometimes make it feel that the dice are loaded against people going about their everyday lives. They'll also legislate to protect consumers from unexpected payments when a subscription is renewed or a free trial ends, require clearer terms and conditions, and ensure rail passengers can find the correct ticket at the lowest price.

Delivering a strong economy which supports more jobs and higher living standards.

The Government wants to build an economy that works for everybody – every region of our country and every section of our society. The UK can only achieve rising living standards and deliver investment in our vital public services if we have a strong economy.

Real wages have grown for 27 straight months, unemployment is at an 11 year low and the employment rate is at a new all-time high.

But there is no room for complacency. As we prepare for our future outside the EU, we must focus relentlessly on the need to keep Britain at the cutting edge of the global economy, so we can support public services and make sure everyone has the support they need to provide for themselves and their family.

Investing in cutting edge technology, infrastructure and innovation

Backing research and development to boost productivity.

The only way to sustainably improve living standards across this country is to improve our productivity performance – currently 35 per cent behind Germany. Higher productivity means an economy that offers better jobs, with better pay.

Backing research and development is key to boosting productivity, so the Government are announcing £270 million to ensure that Britain remains at the forefront of technological advancement, supporting cutting-edge research in Artificial Intelligence and robotic systems, battery technology and electric vehicles. And the Government is allocating £290 million to support new PhD places, focused on STEM subjects.

Building world-class digital infrastructure.

To support the innovative technologies and compete in a global economy, we need to ensure our digital infrastructure is fit for purpose. That’s why we are taking the first steps to establish a National 5G Innovation Network, providing £16 million for UK research institutions to cooperate on a new 5G facility.

The Government also support locally-led projects to roll full-fibre with an additional £200 million fund, so people have access to the fastest and most reliable broadband and businesses can compete and grow in a modern economy.

Investing in local transport networks to tackle barriers to local growth.

At the Autumn Statement the Government announced £2.6 billion new investment in transport. Today it published allocations from a £220 million fund to tackle specific pinch-points on the national road network.

And because the Government know local areas understand the barriers to local growth, they'll allocate £690 million to local authorities to ease urban congestion – including £90 million for the North and £23 million for the Midlands – bolstering the regions and supporting a stronger economy that offers better jobs with better pay.