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Hello and welcome to our live coverage of the budget. Just a reminder that the Chancellor must address the deputies to parliament at 15:30 GMT. This is the third budget of Philip Hammond and his last before the scheduled date of 29 March for Brexit. But this is part of a stalemate in negotiations between the UK and the European Union, with prime minister Theresa May under pressure from eurosceptic MEPs from her own party to give up its so-called Checkers plan, designed to ensure a relatively flexible Brexit. , although questions remain unanswered, including the question of the border between Northern Ireland and the Republic.
Mr Hammond is expected to announce the end of austerity while warning eurosceptics that his plans would be jeopardized if the UK failed to secure a good Brexit deal. But Downing Street has already undermined it: he said Monday morning that all spending commitments in the budget would be funded "regardless of any agreement," as already reported Jim Pickard FT on Twitter.
For those of you who can not access Twitter, the tweet reads as follows:
Sunday: Hammond says another budget will be needed in the event of a Brexit without agreement
Monday: Downing St says the opposite. "All these spending commitments are funded independently of an agreement."
Keeping Eurosceptic MPs from their own party is crucial for Ms. May and Mr. Hammond. The budget has already presented the budget to prevent it from being caught in the final frantic negotiations on a Brexit deal. Some conservative Eurosceptic MEPs are threatening to vote against the government's Brexit policy, saying the UK will remain tied to the EU. So the last thing the Chancellor wants to do is alienate one of his Conservative colleagues by raising taxes in this budget. Eurosceptic conservatives already have a dark view of Mr Hammond because of negative Treasury warnings about the impact of Brexit.
You will find here the profile of Philip Hammond 2016 and his career in the business world, for all those wishing to get acquainted with the past business experience of the Chancellor.
Faced with such a delicate balancing exercise, Mr. Hammond has benefited from a timely boost by what should be the biggest improvement in public finances in decades.
This will allow him to support the commitment made by Prime Minister Theresa May earlier this month to end the austerity.
This will enable it to deliver on the government's fundamental promise to increase spending on the NHS without raising taxes. The Eurosceptic Conservative MPs who already oppose the Chancellor probably tend to oppose any tax increase because of the Treasury's negative warnings about the impact of Brexit.
Measures that have already been put in place include additional funding for highways, additional defense spending, universal credit reforms, money for abused people and broadband, as well as a package of measures. support for large streets and small retailers. Britain will also announce that the UK will hit a special 50p Brexit-themed coin.
The tax cuts are one of the major decisions that the Chancellor could take; Some members want the money that would otherwise be used for this purpose to be used to repair the government reforms that are problematic.
There will be a review of spending next year and, given the uncertainties of Brexit, it would not be surprising if the Chancellor chooses to postpone some important decisions until then. Of course, one of the most important budget decisions was made some time ago: Theresa May announced this summer that the English NHS would get additional funding amounting to 20 billion pounds additional sterling per year in real terms from here 2023-2024.
Fiscal policy may be more difficult than usual as the Conservative Party governs with the support of DUP Northern Ireland. The DUP has threatened to block the budget in future Commons votes, if the government's Brexit deal involves the imposition of new regulatory barriers between Northern Ireland and the rest of the UK. The 10 deputies of the DUP could make the difference between winning and losing a vote.
The main criterion for determining whether a prime minister can govern is his ability to pass a finance bill. The loss of the budget bill could trigger a vote of confidence.
DUP spokesman Sammy Wilson told the BBC earlier in the day that it would be "unwise" for the party to oppose the budget, given that it had not yet seen the details of the withdrawal agreement. However, the government "should not take it for granted" that the DUP will support its future legislation once the budget is adopted, he said.
Markets remained relatively calm today, with the pound trading 0.16% to 1.2811 dollar.
The Achilles' heel of the British economy remains, of course, a poor productivity. British workers produce about 20% less time than French and German workers and their efficiency has not improved much in the past decade. Expect to hear a lot from the Chancellor about how he plans to increase productivity through investments in housing, infrastructure and skills.
Last year, Mr. Hammond announced the establishment of a national fund for productivity infrastructure worth 23 billion pounds, which would release funds for this type of projects. He raised the size of the fund to 30 billion pounds in March, and it is possible that he will do so again today.
Mr. Hammond faces a daunting challenge: to hold Theresa May's pledge to end austerity at the Conservative Party conference in early October. Labor Party leader Jeremy Corbyn has criticized the fact that this promise is nothing more than a "big bad con-conservative".
The Resolution Foundation estimates that to end austerity, it needs sound public finances and £ 31 billion a year. But the state of finance will depend mainly on the success of Brexit and it is very difficult to measure the impact of the imminent exit of the UK from the EU, given two big unknowns: what would have arrived at the economy if the result of the referendum had been reversed and what will eventually look like the Brexit deal.
You can read Chris Giles' analysis on the challenge here.
Whereas the growth rate of the United Kingdom has gone from 1.7% at the time of the referendum to 1.2% now and equivalent rates in the United States and the euro area have increased over the same period, there is no doubt that the results of the referendum led to a slowdown in the economy. the expansion of the economy and the standard of living of the United Kingdom.
Economists disagree about the magnitude of the impact on the British economy, but those who support and oppose the Brexit generally admit that the referendum vote has reduced from 1 to 2, 5% economic output since 2016, the equivalent of 20 to 50 billion pounds sterling. a year of lost business in the UK.
The FTSE 100 index of major stocks is up 1.7% on a day, although recent weakness in global equity markets has weighed it over the past two weeks.
In recent years, budgets have often been dominated by drastic changes in economic forecasts – growth prospects have sometimes been revised upward, but mostly downward. This year, however, we do not expect that they will change much.
Chris Giles of the Financial Times predicts that growth forecasts will be slightly downgraded in the near term, but that will be more than offset by better longer-term upgrades.
Another thing to keep in mind is that all OBR forecasts – for growth, employment, inflation, and so on. – presuppose a good Brexit.
Philip Hammond has just taken advantage of the classic photo shoot with a red box, typical of every day in the UK budget, and is now heading to the House of Commons.
Among the promises made recently by Ms May to show that she really wanted to put an end to austerity, let us quote the now annual tradition of freezing fuel taxes. In 2010, Chancellor George Osborne launched a tactic to reassure voters. We are in the ninth consecutive year of freezing the accounts and the estimated annual cost of the last decision for the Treasury amounts to about 1 billion pounds sterling.
The Chancellor is preparing to rise in the House of Commons; the budget will begin in the next few minutes.
Philip Hammond opened his 2018 budget by proclaiming "a budget for hard working families … workers, clerks and caregivers who are the backbone of our economy".
He insists that tax cuts should be a key priority, which could be important.
The budget "opens the door to a better future" thanks to the "difficult decisions of the last eight years," he said.
Austerity is coming to an end
We did what we had to do, Hammond said. Now, it "opens a new chapter in the economic future of our country". Today, he can say that the era of austerity is nearing its end.
Mr. Hammond talks about the last time that a budget was held on a Monday, in 1962. He draws historical parallels. The media questioned his decision to hold the budget today rather than Wednesday, he added. Some might call themselves Halloween, Hammond's House of Horrors.
Chancellor hits Labor party
Hammond begins with an old trope: the way the Conservatives have helped the economy to recover from the financial crisis under the Labor regime. He mentions that wages have risen at their fastest pace in a decade (which is a bit cheeky as they have hardly grown at all for a decade).
Brexit Agreement
We are confident that we can get a Brexit deal with a double dividend, "said Hammond.
It takes a three-pronged approach:
It has already allocated funds to departments for preparations without a Brexit agreement, and increases it from £ 500 million to £ 2 billion.
Secondly, it will maintain its room for maneuver in accordance with its budget rules, while retaining the firepower needed to intervene as needed in the coming months.
Third, if the economic or fiscal outlook changes significantly, it will take the necessary steps, if necessary to improve the spring budget in a full budget.
Turning now to OBR's economic forecasts: will the numbers be consistent with Hammond's rhetoric that the UK is embarking on a new and brighter economic chapter?
Hammond announces that GDP growth should be 1.6% next year (against 1.3% in March), 1.4% in 2020 (1.3%), 1.4% in 2021 (unchanged) and 1.5% in 2022 (unchanged). and 1.6% in 2023.
Hammond is heading to the job market, which he says will continue to perform well. He does not give precise figures on wage growth, but says that real wage growth will continue throughout the forecast period.
Loan forecasts
On public finances, Hammond says the loan will be:
£ 31.8 billion in 2019-2020 (instead of £ 33.9 billion)
£ 26.7 billion in 2020-2021
£ 23.8 billion in 2021-22
£ 20.8 billion in 2022-23
£ 19.8 billion in 2023-24, adding that it will be the lowest in 20 years.
He also said that the two tax rules will be respected three years earlier.
Mr. Hammond then talks about public spending.
The OBR confirmed a significant improvement in public finances, he said, which means he can keep his promise to set a new course in public spending.
Next year, he will conduct an expenditure review. Today, he has outlined an indicative five-year path for departmental spending. In 2010, the expenditure review showed average annual growth of -3%; the next expenditure review was -1.3%; as of next year, the average annual real growth will be + 1.2%.
It is expected that the Brexit agreement dividend will then allow for additional expenses.
Every Chancellor likes to have a rabbit in his hat when he tackles his budget, but this year some of his star bunnies have escaped earlier, Hammond said, including the announced NHS Spending Commitment. by the Prime Minister this summer. We made our big choice for this budget four months before his presentation, and it was the right decision, he said.
The NHS will soon publish a 10-year plan showing how it will spend this money, but here's a preview. Mr. Hammond announces the creation of a new mental health crisis department benefiting from support in every major A & E department, child crisis teams, new ambulances for mental health and a 24 hour emergency phone line.
Hammond announces additional funding for a few areas before spending review next year.
Firstly, for the local authorities, building on the 240 million pounds already pledged for social services, it will make available 650 million additional pounds for the English authorities and 84 million pounds. additional sterling over the next four years to develop social protection programs for children.
Additional funding for defense
On the defense side, Hammond pledges an extra £ 1bn to the Ministry of Defense to cover the rest of the year and next year to build cyber capacity, anti-corruption capabilities navy and ongoing work to replace submarines with British nuclear deterrence.
He also promises more money in the fight against terrorism: additional aid of 160 million pounds paid by the counterterrorism police in 2019-2020.
Borrowing and growth forecasts in charts
Keith Fray, head of FT statistics, drew these two graphs based on the new OBR forecasts:
Let's move on to some community largesse. Hammond will donate £ 10 million to an Armed Forces Trust to support veterans with mental health issues. It will also fund grants for hall renovation projects. And he will spend £ 1.7m on school education to mark the 75th anniversary of the liberation of the Bergen-Belsen concentration camp.
£ 400m extra for education
We go to schools, where budgets have been stretched. He announces a £ 400 million bonus during the year to help schools "buy the little extras they need" – a one-time payment, paid directly to schools. And finally, 420 million pounds to fill the potholes!
New measures to increase productivity
Ending austerity is not just about utilities, it is about real wage growth and leaving more money in people's pockets, Hammond said. Britain is exploiting a new wave of scientific discoveries. Investing in infrastructure will help us manage change, not hide it, he said. For more details on his many measures to reduce productivity, see the budget's Red Book, he says. The list includes £ 1.6 billion for industrial strategy and £ 150 million for scholarships to attract international researchers. Total public investment will increase by 30% to its highest level in 40 years, he said.
PFI is dead
Hammond points out that even though the Labor Party hates PFIs, 90% of the contracts were concluded by the Labor government.
Hammond says the existing contracts will be honored, but adds: "the public sector time as a child's play must end". There will be a center of excellence to manage these contracts in the public interest. He also says that he will never sign a PFI contract. The government will eliminate the use of PFIs and PF2.
Britain is open for business, said the Chancellor. The annual investment allowance will be increased to £ 1 million for two years. It provides targeted assistance to IP-rich companies, M & A. It will increase direct loans to exporters, open ePassport doors to US, Canadian and Australian passport holders, extend start-up financing up to US $ 25,000. to 2021 and extend mentoring and support allowances for claimants to start a business.
Tweak at the Learning Tax
Hammond announces some adjustments to the apprenticeship tax (hated by many companies) – the contributions small businesses will have to pay to apprentices will be reduced by 10 to 5 percent.
On the housing. Capital Gains Tax – Starting in April 2020, we will limit the relief of rents to properties whose owner is in shared occupation with the tenant, Hammond said.
He refutes the calls for the abolition of the tax relief of entrepreneurs; it will keep it, but extend the minimum qualifying period from 12 months to two years.
With regard to VAT registrations, small businesses will be pleased to learn that the threshold of turnover will remain unchanged for two years.
Employment taxes – we will apply recent changes from the public sector to the private sector, said the Chancellor. We will postpone the amendments until April 2020 and apply them only to large and medium-sized companies.
Tax on the giants of technology
Hammond addresses one of his favorite subjects: taxation in the digital age. According to him, progress is "extremely slow" in the negotiation of a new international tax agreement on digital platforms. The United Kingdom will introduce a "UK digital service tax" – a tax on British incomes from certain technology giants (not technology start-ups). This is not an online sales tax on products ordered over the Internet. It will only be paid for by profitable companies generating at least £ 500 million in revenue from the business sectors concerned. The tax will raise around 400 million pounds a year. But if an international solution were to emerge, the UK could adopt it instead of this British tax.
In an excellent search, he says he looks forward to receiving a call from Nick Clegg, who has just taken a job with Facebook.
Clampdown on tax evasion
Over the past eight years, we have earned 185 billion pounds sterling that would otherwise not have been paid, and we now have another set of restrictive measures in place. tax to raise 2 billion pounds over the next five years, said the Chancellor. We will make HMRC a preferred creditor, stop buying services from overseas branches and deliver services through foreign companies, and introduce a PAYE restriction for small and medium-sized businesses.
Help for the big streets
Because the big streets are suffering from online shopping, there will be a £ 675m "Great Wall Fund" – to help boards develop plans for the transformation of their main streets.
Regarding business rates (another scourge on the main street), Hammond says that for the next two years, all retailers in England whose taxable value is equal to or lower than £ 51,000 will reduce their rates bill. of a third party.
The Chancellor extends discretionary relief to public toilets, including those owned by private individuals. That's the only announcement of his budget that has not flowed, he jokes.
More money for housing
Hammond Announces Another £ 500 Million Investment for Housing Infrastructure Fund, Up to £ 1 Billion British Business Bank Guarantees for Home Builders and Funding for 500 Neighborhoods to Allocate to sell land to low-cost housing for local people.
Sterling is retreating, despite rising economic forecasts, reports our FastFT Manager Adam Samson. The pound sterling recently fell by 0.08% against the euro to 1.1234 euro. The US dollar was $ 1.28 against 0.26% against the dollar.
Hammond has so far announced a lot of expenses, and not much in terms of taxes (except the Faangs tax) …
Mr Hammond announces a series of measures concerning urban infrastructure including funding for buses, university business and discovery areas, funds for Northern Rail and a pilot project on the skills of the self-employed in Manchester. There will also be more funding for the Oxford-Cambridge rail link and an upgrade to London's Docklands Light Railway.
The Scottish and Welsh governments and the Northern Ireland executive also get spending increases.
Belfast and North Wales are part of urban growth offers.
Belfast will receive £ 2 million to recover from the city center after a serious fire. In Northern Ireland, school projects of £ 300 million are planned for intercommunity education, as well as a working group on decentralization.
For the fishing industry, £ 12m over three years for technology and safety measures.
Tax on plastics
Hammond attacks plastics, "convenient for consumers but deadly for our oceans". A new tax will be imposed on the manufacture or import of plastic packaging containing less than 30% recycled content. It does not say how big the tax will be, nor how much money it will collect. He will consult on the calendar. He also considered introducing a tax on plastic coffee cups, but concluded that an "isolated tax" would not allow for the moment a decisive change ". But he warns the drinks industry that he is monitoring …
Gel of beer, cider and spirits
Mr. Hammond says that many people feel pressure on their household budget. He can help with the cost of living. First, fuel tariffs will be frozen for the ninth year in a row. The tobacco tax progression factor will continue at inflation plus 2%. It will freeze beer and cider for next year. It also freezes the duties on spirits. Anyone can afford to toast the recent birth of Scottish Conservative leader Ruth Davidson's newborn baby, "said Hammond, welcoming his colleagues.
The distance fee will increase to 21%, which corresponds to the reduction of fixed odds terminals. The new 26-30 train card will be introduced by the end of the year.
There is also a set of measures for affordable credit and support for credit unions.
Universal credit is here to stay
On universal credit – huge reform of social protection system underway in UK is controversial – Hammond says government statement says it is of a "reform long awaited and which imposes". But he says that he recognizes the concerns about two problems:
1) Implementation. On this point, it promises additional measures worth £ 1 billion to ease the transition over 5 years.
2) Concerns about rates and allowances in the CU system. He announces that he will increase work allowances by £ 1,000 a year. It will cost around £ 1.7 billion. This is a big step back on the cuts to UC's generosity that have been announced by George Osborne.
But he concludes: CU is here to stay and we are investing the necessary funding to make it a success.
Tax thresholds have increased
Improving the wages of people at work is at the heart of my mission as Chancellor, "said Hammond. The national living wage will increase by 4.9% in April compared to April, to reach £ 8.21, an annual salary increase of £ 690 for the average full-time worker. We accept the Commission's recommendation on low wages for increases above inflation for young people, he added. Next year, we will have the ambition to give a new mandate to the Low Pay Commission beyond 2020. We will therefore be consulting in the coming months to make sure we get it right.
We want workers to keep more of the money they earn. The personal allowance will increase to £ 12,500 and the higher rate threshold to £ 50,000 by April 2019, then we will index them both according to inflation. This is a tangible sign of our demonstrated commitment a year ago – I did not go into politics to raise taxes, "said Hammond.
We are on the final summary. We turned the corner, said Hammond. We embrace change. "Austerity is coming to an end, but discipline will remain," he says (twice) – "and it's the sharp dividing line in British politics today." A few last moves against the Labor opposition and he declares "we are at a turning point in our history, we should move forward and not backwards". And with that, he sits down. C'était un discours assez long – un peu plus d'une heure.
Le chancelier était debout pendant un peu plus d'une heure. Le parti travailliste donnera bientôt sa réponse à ses annonces. Voici un rappel de certaines des mesures politiques clés énoncées par M. Hammond:
– Une nouvelle taxe sur les services numériques destinée aux grandes entreprises de technologie
– Plans visant à mettre fin à l'utilisation des transactions PFI
– 1 milliard £ supplémentaire pour faciliter le déploiement du crédit universel
– une taxe sur les emballages plastiques
– Le salaire de subsistance national a augmenté de 4,9% à 8,21 £
– Aide pour les grandes rues en difficulté
– Réduction du tarif des entreprises pour les petites entreprises
– Confirme un financement supplémentaire de 20 milliards £ pour le NHS jusqu'en 2022-23
– 1 milliard £ supplémentaire pour la défense au cours des deux prochaines années
– 500 M £ supplémentaires réservés aux préparatifs sans compromis du Brexit
– les droits sur la bière et les spiritueux sont gelés depuis un an; droit sur le carburant gelé pour la neuvième année consécutive; les droits sur le tabac augmentent de l'inflation plus 2%
– Le crédit universel est là pour rester
– Les seuils d’imposition ont été relevés un an plus tôt que prévu
Corbyn: l'austérité n'est pas terminée
Jeremy Corbyn, dirigeant syndical, réagit au budget de Philip Hammond. Il affirme que l'austérité n'est pas terminée et énumère un certain nombre d'exemples de services publics sous-financés et de problèmes sociaux. L'annonce d'aujourd'hui est une goutte d'eau dans l'océan, dit-il.
Selon M. Corbyn, l’écart entre les dirigeants et les autres dirigeants ne se réduit pas, il se creuse; le salaire des directeurs généraux est très élevé par rapport à celui de leurs travailleurs. Les plus bas salaires et les travailleurs précaires ne bénéficieront pas de la hausse du seuil d'imposition et souffrent des réductions du crédit universel, dit-il.
Voici le verdict du Bureau de la responsabilité budgétaire, le chien de garde fiscal officiel: "Le gouvernement dépense des bénéfices financiers exceptionnels", indique le rapport.
Les recettes fiscales émises par le gouvernement et l'amélioration des perspectives d'emploi ont procuré au gouvernement un gain financier considérable depuis mars, suffisant pour atteindre son objectif d'équilibre budgétaire d'ici 2025. Mais cela avait déjà été englouti par la promesse du Premier ministre de consacrer plus d'argent au NHS. en juin, à laquelle le chancelier a ajouté un autre don à court terme en matière d’impôts et de dépenses. Cela laisse les perspectives à moyen terme pour les emprunts publics peu modifiées depuis mars.
Les marchés ont pris le budget dans leur foulée; la livre sterling n'a que peu bougé et les cours des actions d'importants sous-traitants de PFI cotés en bourse n'ont pas bougé après l'annonce de M. Hammond qu'il ne signerait aucune nouvelle transaction PFI.
Moody's met en garde sur le niveau de la dette britannique
Sarah Carlson, vice-présidente et principale analyste souveraine pour le Royaume-Uni à l’agence de notation Moody's, a déclaré que le budget "confirme nos attentes selon lesquelles nous ne verrons pas de retournement substantiel des niveaux élevés de la dette publique britannique au Royaume-Uni".
"Les niveaux d'endettement élevés resteront un défi de crédit pour le Royaume-Uni dans un avenir proche", a-t-elle déclaré. "Les pressions sociales et politiques en faveur d'une augmentation des dépenses resteront fortes, alors que les négociations en cours sur le Brexit suscitent une grande incertitude quant aux perspectives économiques."
L’OBR a déclaré ne pas être en mesure de certifier le coût fiscal des mesures de crédit universel envisagées par le gouvernement, en raison «d’échecs répétés
calendrier prévisionnel qui avait été convenu initialement entre le Trésor et nous-mêmes ". Cela rendait le travail de l'OBR" inhabituellement difficile ", a-t-il déclaré.
Les prévisions de l'OBR supposent "une sortie relativement douce de l'UE l'année prochaine", mais "il ne reste aucune base valable pour prédire l'issue des négociations en cours sur les relations entre le Royaume-Uni et l'UE après le Brexit".
"Un désordre [exit] pourrait avoir de graves conséquences à court terme pour l'économie, le taux de change, les prix des actifs et les finances publiques ", a ajouté l'OBR. L'échelle serait très difficile à prévoir, compte tenu de l'absence de précédent."
Plus d'argent pour les prisons
Dans son discours, le chancelier a apparemment omis dans son discours une annonce largement attendue visant à remédier à la crise croissante dans les prisons. Helen Warrell, la correspondante des politiques publiques du FT, a écrit la semaine dernière que l'administration pénitentiaire a perdu un quart de son budget et près de 30% de son personnel au cours des années de forte austérité entre 2010 et 2015.
Un conseil supérieur emprunte pour la construction de logements afin d'évincer le secteur privé, déclare l'OBR
La récente déclaration du gouvernement selon laquelle il assouplira les restrictions sur les pouvoirs d'emprunt des conseils afin de leur permettre de financer davantage de constructions résidentielles "occultera partiellement la construction de logements dans le secteur privé", selon l'OBR.
La levée du plafond d'emprunt du compte des revenus du logement entraînera la construction de 20 000 logements par les conseils, selon l'OBR, mais seulement 9 000 d'entre eux constitueraient un ajout net au parc de logements britannique, le solde serait "compensé".
la construction de logements dans le secteur privé, y compris les associations de logement ".
Pour ceux d'entre vous qui veulent approfondir les petits caractères. Voici le lien vers tous les documents budgétaires
Notre liveblog se termine maintenant; merci de nous rejoindre le jour du budget 2018. Vous pouvez suivre le reste de notre couverture sur notre page Budget, ici.
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