Chancellor Phillip Hammond has delivered his last Budget announcement before Brexit today amid growing pressure on the Government over its handling of leaving the European Union.
The Budget, presented by the House of commons, will set out the Government’s economic plan for the country.
Hammond has promised a Budget for “the strivers, the grafters and the carers” as he set out his tax and spending plans in the commons. In his last scheduled Budget before Brexit, Mr Hammond promised his proposals would pave the way for a “brighter future”.
Although, the Government will have to set out a new Budget if it is unable to reach a Brexit deal with the EU, the Chancellor has said.
Hammond said a no-deal Brexit would require a “different response”, with “fiscal buffers” being maintained to provide support for the country.
In the speech that lasted over an hour, he banned PFI deals, made a slight concession on Universal Credit and launched a huge £400m tax bill on ‘tech giants’ Amazon, Google and Facebook.
The Tory minister claimed the “era of austerity” was ending as he promised £2bn a year extra for mental health by 2024, 10 million trees, cash for roads and a pilot scheme to offer low-cost loans to the poor.
Universal credit claimants will receive an extra £1.7 billion a year in higher work allowances by 2023.
Meanwhile beer, cider, petrol and spirits duties are all frozen – though taxes on cigarettes and wine are going up this evening.
The income Tax personal allowance and 40% rate are rising in a Tory manifesto pledge coming a year earlier than planned.
Stamp duty will be scrapped for more first-time buyers and the minimum wage is going up to £3.21 for over-25’s.
So, what’s actually happening in the budget and how will it affect you?
Tax
- Income Tax personal allowance (the amount all workers get tax-free) to rise from £11,850 to £12,500 in April 2019.
- 40p Income Tax threshold to rise from £46,350 to £50,000 in April 2019, helping the richest 13%.
- New digital services Tax on web giants making more than £500m globally from April 2020.
Wages
- National living wage (minimum wage for over-25’s) rise from £7.83 to £8.21 in April 2019.
- Minimum wage aged 21-24 to rise from £7.38 to £7.70
- Minimum wage aged 18-20 to rise from £5.90 to £6.15
- Minimum wage aged 16-17 to rise from £4.20 to £4.35
- Apprentice wages to rise from £3.70 to £3.90
Benefits
- Huge Universal credit climbdown as “work allowance” – the amount you can earn before benefits taper away – rises by £1,000 a year, costing £1.7bn a year.
- Another £1bn over five-years to help people transition when they are moved on to Universal credit.
- Benefits remain frozen for four years to 2019/20, cutting almost £4billion a year from the benefits bill.
NHS and Social care
- £2bn a year extra for mental health by 2023/24 with “crisia cafes”, specially-equipped ambulances, devoted school teams and guaranteed A&E support.
- ALL future PFI deals will be banned – stopping hospitals from taking on huge new building debts.
- £10m will be made available to air ambulances to help them keep flying.
- £650m extra social care funding for English councils for 2019/20.
- Children’s social care programmes get another £84m over five years to expand programmes to 20 further councils.
Housing
- Stamp duty axed for more first-time buyers, extending to all buyers of shared ownership under £500,000 – and applied retrospectively to the 2017 Budget.
Education
- £400m in-year bonus to help schools “buy the little extras they need” – averaging just 10k per primary and £50k per secondary school.
Armed forces and police
- Another £1bn to MOD to cover the remainder of this year.
- £10m to the Armed Forces Covenant Fund Trust to support veterans with mental health needs.
- £160 of counter-terror police funding in 2019/20 “to protect numbers”.
- But no extra money for general police and no admission problems caused by tory cuts.
Cigarettes and alcohol
- Fuel duty will be frozen for the ninth year in a row.
- Tobacco duty will continue to rise at inflation plus 2%.
- Beer and cider duty FROZEN for the next year saving 2p on a pint of beer.
- Spirits duty FROZEN too saving 30p on a bottle of Scotch or gin.
- But wine duty WILL increase at the inflation rate.
But Jeremy Corbyn warned it was a “broken promise budget” with “half measures and quick fixes while austerity grinds on” – as women denied their pensions protested furiously in the public gallery.
