Key points of the 2018 budget – at a glance | News from the United Kingdom

Introductory remarks by Hammond

Peter Walker, Political Correspondent: Hammond's initial paragraphs are openly political and herald the idea of ​​ending austerity. It will be, he says, "a budget that shows the perseverance of the British people that is finally bearing fruit." It will be, he promises, a budget for "workers, grafters and caregivers". However, at the end of this section, Hammond declares that the era of austerity is "finally coming to an end" – note the cautious language; not finished".

Brexit

• Hammond announces an additional £ 500 million for Brexit preparations in ministries.

• This comes in addition to the £ 2.2 billion already announced and £ 1.5 billion announced in the spring declaration.

• Hammond says he is ready to turn the spring declaration into a "full tax event" if needed.

PW: Hammond is trying not to be too gloomy about Brexit – he's talking about a "double deal dividend" for the economy if an agreement with the EU is reached – but still promises to be vigilant, hence the idea that the spring declaration becomes a "full tax event" if necessary, which looks a lot like code for an emergency budget s 39; there is no agreement.

Growth

• Hammond expects 1.3% growth for 2018.

• Then 1.6% in 2019, 1.4% in 2020, 1.4% in 2021 and 1.5% in 2022 and 1.6% in 2023.

• In March, growth was forecast at 1.3% in 2019, 1.3% in 2020, 1.4% in 2021 and 1.5% in 2022.

borrowing

• Loan forecasts are expected to be 11.6 billion pounds lower in 2018-2019 than those announced in the spring release. This equates to 1.2% of GDP.

• Borrowings are expected to rise to £ 31.8 billion in 2019-2020, then to £ 26.7 billion in 2020-21, to £ 23.8 billion in 2021-22, to £ 20.8 billion in 2022 -23 and £ 19.8 billion in 2023-24.

• Hammond said the government would meet its fiscal targets three years earlier and that the percentage of GDP as a percentage of GDP fall to 1.3 percent in 2021.

PW: Chancellor's part, full of statistics, ends with political momentum, calling debt reduction "the decisive turning point in the great economic recovery of our country". He then adds a joke that deserves a lot of attention, but does not work if I hear it well: "Fiscal Phil says the tax rules are acceptable".

Debt

• Debt should represent 83.7% of GDP in 2018-2019.

• As a share of GDP, debt peaked at 85.2%.

• The share of debt in GDP is expected to fall to 82.8% in 2019-2020, to 79.7% in 2020-21, to 75.7% in 2021-2022, to 75.0% in 2022-23 and at 74.1% in 2023-24.

Defense budget

• Hammond is announcing an additional £ 1 billion budget for the defense budget for the remainder of this year and next year, to boost cyber capabilities and anti-submarine warfare.

• The Chancellor announced that the Treasury would donate £ 10 million to the Armed Forces Trust Fund to support veterans on the centenary of the First World War armistice.

PW: Hammond begins his spending section by agreeing that it will contain few surprises, not least because the Prime Minister and others have informed in advance of many announcements, especially on the NHS. The Chancellor said those in the position would usually prefer "rabbits in the hat" for the budget, but added, "This year, some of my star rabbits seem to have escaped earlier. " some new items, including additional money for the defense, as well as an immediate boost for welfare – two areas likely to please fellow Conservative MPs.

schools

PW: School money will be welcome, but some MPs will hesitate in Hammond saying that it will help "buy the little supplements they need", while many managers complain about the lack of money to buy essential articles such as books and teaching badistants. This is also, in particular, 20 million pounds less than the amount announced immediately afterwards for potholes.

PFI

Small business

• Hammond said it would halve the contribution to learning levy for small businesses by 10% to 5% in a £ 695 million package intended to support apprenticeship.

• It will extend the minimum period of eligibility for relief of the entrepreneur from 12 months to 2 years.

PW: Hammond devotes a good deal of his time to a relatively financially restricted part of the budget, in order to defeat the argument of course that the Conservatives are the party of the post-Brexit business – that he opposes the opinion of his Shadow of Labor, John McDonnell.

Digital tax

• The government will now introduce a tax on digital services in the UK. Hammond said the project is expected to yield around £ 400 million a year.

• The giants of digital technology will be taxed at 2% on the money of UK users.

• The Chancellor said the tax would be "narrowly focused" on UK-generated revenues for some companies, rather than on UK tech startups.

PW: A very common idea, and where the real test will depend on the amount of revenue it generates. But a new politically secure tax – few MPs will receive the letter from their constituents complaining of an extra burden for Google and Amazon.

Main streets

• The government will provide £ 675 million to create a 'Great Streets Fund' that boards can access to redevelop their main streets.

• The Chancellor announced that for the next two years, up to an badessment of corporate rates, for all companies with a taxable value of £ 51,000 or less, the government will reduce their business rate bill. from a third party. An economy for 90% of shops, restaurants and cafes.

• There will also be a mandatory reduction in business rates for public toilets.

PW: A package of not particularly expensive proposals, which will be politically popular, given the concerns expressed by many MPs about their main streets. But, still pragmatically, Hammond adds that the changes in shopping habits are "irreversible" and that it is mainly about adapting to decline, and not to the loonie. reverse.

Housing

• Hammond said the government will allocate an additional £ 500 million to its housing infrastructure fund, which will unlock 650,000 homes. The fund now stands at 5.5 billion pounds sterling.

Tax on plastics

• The government will impose a new tax on the manufacture and import of plastic packaging containing less than 30% recycled plastic. Hammond says he'll consult on the details and the schedule.

• There will be no special tax on disposable plastic cups.

PW: It will not be a budget to encourage environmentalists. The new tax on plastic packaging is interesting, but Hammond has avoided the "latte tax" and the only other environmental measure announced is £ 10 million to fight waste – which in the budget is money found at the bottom of the sofa.

Universal credit

• The government will also increase the working allowance to £ 1,000 a year under universal credit, at a cost to the Treasury of £ 1.7 billion a year.

PW: It's a bit of a help for conservative backbenchers, many of whom publicly praise UC, but are seriously concerned about its implementation and its political impact. Thus, the increase in work allowances will be particularly welcome. But the extra £ 1 billion for the transition is half the amount that some had hoped to see in the budget.

Income tax

• Hammond said the government would honor its commitment to raise the personal allowance to £ 12,500 (currently £ 11,850) and the increased threshold to £ 50,000 one year earlier than planned: April 2019.

• The Chancellor said it was because the OBR estimates for public finances were better than expected.

• The minimum wage will also increase by 4.9%, from 7.83 to 8.21 pounds.

PW: Hammond said: "I did not go into politics to raise taxes" – and promised not to do so. But it should be remembered that this morning only, the Health Secretary, Matt Hanbad, repeatedly refused to exclude the idea of ​​raising taxes to cope with an increase in NHS spending in the case of a Brexit without agreement.

Verdict

PW: This is a speech on a strangely modest budget, not least because most of Hammond's announcements have already been made, which he acknowledged. It may be argued that their line of command came in the middle, when the Chancellor said: "The hard work of the British people is bearing fruit. Austerity is coming to an end.

The most important thing is "to come to an end" – a wording he used at least four times – rather than "ended". As Hammond concluded: "Austerity is coming to an end, but discipline will remain." It's always "reasonable Hammond" in the change.

With regard to new announcements, it was probably a politically popular budget, but one that was relatively weak; for example, the end of IFP projects, additional funds for defense, reinforcement of main streets and a new tax on the digital giants. But there are traps to come; for example, if the extra money for the CU will be enough.

And I also suspect that the extra school money of 400 million pounds could cause more anxiety than joy. The cash – strapped schools will not appreciate it being told that it is for the "little extras", while many struggle for the basics.

Finally, as mentioned many times, this is a budget that depends almost entirely on the conclusion of a good agreement on Brexit, Hammond conceding that sudden changes – such as a departure without an agreement – would actually mean a all new budget in the spring. .