Autumn Budget 2018

Hammond

Autumn Budget 2018

AUTUMN BUDGET 2018

A summary and analysis of the key Autumn Budget announcements

 

INTRODUCTION

On 29 October 2018, the Chancellor of the Exchequer, the Rt Hon Philip Hammond MP, delivered his final Budget before Brexit to Parliament; the first time the Budget has been delivered on a Monday since 1962. The Chancellor opted to deliver his Budget earlier than usual this year to avoid clashing with the final stages of the Brexit negotiations in November.

Below is a summary of the Chancellor’s key announcements, with analysis and comment from the principal Opposition parties and key stakeholders.

 

ANALYSIS AND COMMENTARY

An end to austerity?

And so the curtain has fallen on the final Budget before Brexit – the last in 45 years of EU membership.

The age-old convention that the Chancellor announces his measures to Parliament before he speaks to the media seemed somehow to have eluded his press officers since, curiously, a great deal of what he had to say had already been extensively briefed out in the previous day’s Sunday papers and TV shows.

This was more a Budget designed to prop up an administration that is having difficulty weathering the pre-Brexit storm, trying to keep its own parliamentary party together and its alliance with the DUP alive, at the same time as keeping an opportunistic Official Opposition at bay, and persuading the business community and voters alike that there’s a credible plan for a bright and prosperous future for all.

Against the backdrop of darkening Westminster skies (an inevitable consequence of a mid- afternoon Budget just after the clocks had gone back, adding to the figurative concerns about the parlous state of the UK-EU negotiations), “Spreadsheet Phil” as Whitehall wags dub him, announced “austerity is coming to an end” to rapturous applause from the Conservative backbenches and incredulous looks from the benches opposite.

The national debt has fallen as a share of GDP (and is forecast to do so in each of the next five years); the structural borrowing target is now on course to be met three years early; and public spending is expected to increase overall by 1.2% in real terms each year. As the Chancellor quipped with an eye on tomorrow’s headlines: “fiscal Phil says fiscal rules. Okay!”

With a flourish, a further £500 million was committed to Brexit preparations (though the Treasury’s Budget pack contains just three references to Brexit). However, warned the Chancellor, in the event of a No Deal, next year’s Spring Statement would become a “full fiscal event” – colourless Treasury code for an emergency Budget.

This was an unashamedly populist Budget – and, from a political standpoint, none the worse for that. In the biggest fiscal loosening since David Cameron became PM, the Chancellor aimed his modest amounts of largesse (and his own political capital) squarely at hard working Britons at the sharp end and feeling the pinch after a decade of austerity. The personal allowance goes up in 2019 to £12.5k and the high rate threshold to £50k – a year earlier than the Conservatives’ manifesto commitment, meaning an effective tax cut for 32 million Britons. The National Living Wage also goes up by an inflation-busting 4.9%. To support the high street, business rates are to be slashed by a third for two years, saving up to 90% of all shops up to £8,000 per year. PFIs and PF2 – a cynical piece of off-balance sheet accounting under Gordon Brown – are to be abolished. 

There was a thunderous avalanche of funding, too, for a myriad of sectors and issues spanning mental health, potholes, public lavatories, AI and defence. And, playing to the gallery of public opinion, Chancellor Hammond launched a broadside at digital platform businesses – plainly aimed at the so-called “FANG” players – that quietly offshore their profits and evade their obligation to pay taxes to the Exchequer.

On his backbenches, some old-fashioned fiscal conservatives will have quailed at the absence of tub-thumping rhetoric about balancing the books, smaller government or a spending review total (the last of which had been explicitly promised in this year’s Spring Statement).

But there was enough red meat in the speech to satisfy business owners and the more ideological of Conservative colleagues. Entrepreneurs Relief was retained (although the qualifying period was increased). Like every Conservative Chancellor since the 1980s, Phillip Hammond ritualistically reaffirmed that “Britain is open for business.”  As if further evidence were needed that foreign investors would now find it easier to get into the UK, the Chancellor added that airport e-passport gates would in future be open to visitors from the US, Canada, Australia, New Zealand and Japan – all places coincidentally targeted for early free trade agreements, after Brexit.

The best way to view a Budget is, often, not at first glance but, instead, to reflect on the measures as a totality – and to be sure, of course, to read the fine print. This was a Budget that offered modest amounts of cash to lots of causes and interest groups who could, in turn, come away feeling that they have been heard and recognised. We probably will not know for another five months whether many of these measures will last the course or if a completely different kind of Budget will be called for. But we’ll only discover that in the event of a No Deal.

 

KEY ANNOUNCEMENTS

 

The State of The Economy

 

  • The Office for Budget Responsibility forecasts that GDP will grow by 0.5% in Q3 2018 and 0.4% in Q4 2018, and therefore expects growth to be 1.3% in 2018, rising to 1.6% in 2019, dipping to 1.4% in 2020 and 2021, and then increasing to 1.5% in 2022 and 1.6% in 2023.
  • The Government announced public borrowing in 2018 will be £11.6 billion lower than forecast in March of this year, representing 1.2% of GDP.
    • The Chancellor announced debt as a share of GDP peaked at 85.2% in 2016-17, falling to 83.7% this year and to 74.1% by 2023-24.
    • Borrowing for the remaining period was forecast to be £31.8 billion in 2019-20, £26.7 billion in 2020-21, £23.8 billion 2021-22, £20.8 billion 2022-23, and £19.8 billion in 2023-24.
  • The Chancellor announced the deficit is down from 9.9% in 2009-2010 to less than 1.9% in 2017-18, and is expected to fall to less than 1.4% of GDP in 2019, and will fall to 0.8% of GDP in 2023-24.
    • The Chancellor said on average, spending on public services (departmental spending) will grow 1.2% above inflation from next year until 2023-24
    • The Government announced that spending as a share of GDP has been brought down from 44.7% in 2010‑11 to 38.5% in 2017-18.
    • The Government announced Total Managed Expenditure (‘TME’) is expected to be around £842 billion in 2019-20, and that public sector receipts are expected to be around £810 billion.
    • The Government also announced that it holds £1.9 trillion of assets and £4.3 trillion of liabilities.
    • The Chancellor re-committed to the Government’s public Spending Review in 2019, where HM Treasury will publish the final conclusions of its Balance Sheet Review announced in last year’s Autumn Budget.
  • The OBR forecasts productivity growth of 0.8% in 2018 and 2019. Over the medium term, productivity growth is expected to increase to 0.9% in 2020, and then to 1.2% in 2023. 
  • The OBR forecasts CPI inflation to be 2.6% in 2018 and it is then expected to be around 2.0% for the rest of the forecast period.
  • The Government announced that employment levels were at 32.4 million in the three months to August 2018, close to its highest level ever.
    • The Chancellor announced the unemployment rate is at its lowest level for over 40 years at 4.0%, with over 3.3 million more people in work since 2010.
    • The OBR forecasts there will be 800,000 more jobs by 2022.
  • The OBR is forecasting sustained real-wage growth for each of the next 5 years: The OBR forecasts average earnings to grow by 2.6% in 2018 and 2.5% in 2019, before rising to 2.8% in 2020, and expects it to increase further to 3.2% in 2023.
    • The ONS estimates that real household disposable income (RHDI) per head, the main measure of living standards, is 4.0% higher in Q2 2018 than at the start of 2010. In 2016-17, income inequality was lower than it was in 2010, and close to its lowest point since 1986. The OBR expects RHDI per head to increase 3.2% by the end of 2023.
    • The Chancellor promised HM Treasury would set out a 5 year strategy for responsible management of public sector wealth as part of the review.
  • The Government announced that, while business investment grew by 1.8% in 2017, it has subsequently fallen by 0.5% in Q1 2018 and by 0.7% in Q2 2018.
    • The OBR still expects business investment to grow by 0.5% in 2018, before rising by 2.3% in 2019. Thereafter, business investment is forecast to grow by around 2.1% a year. 
  • Interestingly, the Government announced that, in the first half of 2018, both export and import volumes have declined, though imports have declined by less. As a result, net trade has made a negative contribution to quarterly GDP growth over this period.
    • The OBR has revised down its forecast for the contribution of net trade to GDP growth in the near term, although it still expects net trade to make a positive contribution to GDP growth in 2018 of 0.2 percentage points. 
    • The OBR then expects net trade to subtract 0.1 percentage points from GDP growth in 2019 and 2020. Net trade makes no contribution to GDP growth in 2021 and 2022, and then subtracts 0.1 percentage points from GDP growth in 2023.

 

Brexit

 

  • The Chancellor announced an additional £500 million to departments across Whitehall to prepare for Brexit in 2019-20, bringing the total spend available for that year to £2 billion.
  • The Chancellor announced that there will be an emergency Budget if no deal is reached with the EU, stating that “if the fiscal situation changes, I will upgrade the Spring Statement to a full fiscal event.”
  • The Chancellor announced an additional £200 million would be made available to UK banks to replace funds from the EU investment bank if necessary.
  • The Chancellor announced that he will maintain headroom to fiscal rules to allow financial flexibility as the UK prepares to depart from the EU.
  • The Government announced that a commemorative Brexit 50 pence coin will be minted for Spring 2019.

 

Taxation

 

Business tax

  • The Chancellor announced small retail businesses (with a rateable value of below £51,000) will see their business rate bills cut by a third for two years from April 2019, saving them £900 million.
    • The Chancellor also announced that public lavatories, whether publicly or privately owned, will receive a 100% business rates relief, and that the Government will continue the £1,500 business rates discount for office space occupied by local newspapers in 2019-20.
  • The Chancellor announced local high streets will benefit from a £675 million fund for local councils to improve transport links and facilitate the redevelopment of empty commercial areas to homes and offices. 
  • To better target private residence relief at owner occupiers, the Chancellor announced that, from April 2020, the government will reform lettings relief so that it only applies in circumstances where the owner of the property is in shared occupancy with the tenant. The final period exemption will also be reduced from 18 months to 9 months.

 

Personal taxation

  • The Chancellor announced the tax-free Personal Allowance will rise by £650 to £12,500 (before you have to start paying income tax) in April 2019, one year ahead of the Conservative’s 2017 manifesto commitment to do so by 2020.
    • This means a basic rate taxpayer will pay £1,205 less tax in 2019-20 than in 2010-11.
  • The Chancellor also announced that the higher rate threshold for the amount people will  have to earn before they pay tax at 40% will increase from £46,350 to £50,000 in April 2019. 
  • The Chancellor announced that the VAT threshold would be maintained at the current level of £85,000 for a further 2 years until April 2022. 

 

Consumer taxes (Fuel, alcohol, tobacco, gambling)

  • The Chancellor announced that fuel duty would be frozen for the ninth year in a row (announced on 3 October), leading to a total saving for the average car owner of over £1,000, and £2,500 for van drivers.
    • The Chancellor also announced duties would be frozen on beer, cider and spirits for next year.
    • However, the Chancellor did announce the duties on wine are to rise in line with inflation and white ciders are to be taxed at a new higher rate. Tobacco duties will continue to rise in line with inflation plus 2%. 
  • The Chancellor reconfirmed the Government’s announcement from May 2018 that, in order to ensure funding for public services is maintained following the implementation of a £2 maximum stake on B2 machine games, remote gaming duty will be increased to 21% in October 2019.
  • The Chancellor confirmed that the new 26-30 railcard (announced in the Spring Statement) would be available across the network by end of the year.
  • The Chancellor  announced that short-haul rates of Air Passenger Duty would not rise for the eighth year in a row, keeping costs down for 80% of passengers.
    • Long-haul rates would rise in line with inflation.

 

Corporate tax and avoidance

  • The Chancellor announced the UK would introduce a new 2% Digital Services tax from 2020 designed to target certain digital businesses and ensure that the amount of tax paid in the UK is reflective of the value they derive from their UK users. The tax will:
    • apply to revenues generated from the provision of the following business activities: search engines, social media platforms and online marketplaces
    • apply to revenues from those activities that are linked to the participation of UK users, subject to a £25 million per annum allowance
    • only apply to groups that generate global revenues from in-scope business activities in excess of £500 million per annum; and
    • include a safe harbour provision that exempts loss-makers and reduces the effective rate of tax on businesses with very low profit margins
  • The Chancellor announced that, in order to ensure that large companies pay tax when they make significant capital gains, the government would bring the tax treatment of corporate capital losses into line with the treatment of income losses. From 1 April 2020, the government would restrict the proportion of annual capital gains that can be relieved by brought-forward capital losses to 50%. The measure wouldinclude an allowance that gives companies unrestricted use of up to £5 million capital or income losses each year, meaning that 99% of companies would be unaffected.
  • The Chancellor also announced the Government would introduce a tax on the production and import of plastic packaging from April 2022. Subject to consultation, this tax would apply to plastic packaging which does not contain at least 30% recycled plastic, to transform financial incentives for manufacturers to produce more sustainable packaging.

 

Backing Business

 

Manufacturing

  • The Chancellor announced that the Government will increase the Annual Investment Allowance from £200,000 to £1 million for all qualifying investment in plant and machinery made on or after 1 January 2019 until 31 December 2020, to help stimulate business investment and improve growth.
    • In addition, from October 2018, businesses will be able to deduct 2% of the cost of any new non-residential structures and buildings off their profits before they pay tax.

 

SMEs

  • The Chancellor did not announce any changes to the level of entrepreneurs’ relief available. However, to support longer-term business investments, he increased the minimum period throughout which the qualifying conditions for relief must be met from one year to two years.
  • The Chancellor announced that it will extend the Financial Ombudsman Service (FOS) to small and medium-sized enterprises with a turnover of up to £6.5 million, along with its consultation on increasing the FOS award limit to £350,000.

 

Jobs and apprenticeships

  • The Chancellor announced that the Government will aim to target Employment allowance at small and medium sized businesses with an employer National Insurance contributions bill under £100,000 a year.
    • The Chancellor said that the previous flat rate of £3000 per employer did not provide an incentive for large employers to take on employees.
  • The Chancellor announced the introduction of a reform package of over £695 million aimed at strengthening the role of employers in the apprenticeship programme, so they can develop the skills they need to succeed.
  • The Government will make up to £450 million available to enable levy paying employers to transfer up to 25% of their funds to pay for apprenticeship training in their supply chains.
  • The Government will provide up to £240 million to employers, in order to halve the co-investment rate for apprenticeship training from 10% to 5%.
  • The Government will also provide up to £5 million to the Institute for Apprenticeships and National Apprenticeship Service in 2019-20, to identify gaps in the training provider market and increase the number of employer-designed apprenticeship standards available to employers. All new apprentices will start on these new, higher-quality courses from September 2020.
  • The Government announced that it will work with employers to give workers the opportunity to upskill or retrain. The Budget allocates £100 million for the first phase of the National Retraining Scheme (NRS). This will include a new careers guidance service with expert advice to help people identify work opportunities in their area, and state-of-the-art courses combining online learning with traditional classroom teaching to develop key transferable skills. The National Retraining Partnership between the Government, the Confederation of British Industry and the Trades Union Congress will focus on job-specific retraining in phase two.
  • The Chancellor announced that Government will fund £20 million worth of skills pilots, which will include:
    • A new £3 million pilot to help employers in Greater Manchester and surrounding areas to address local digital skills gaps through short training courses.
    • A £10 million pilot in Greater Manchester, working with the Federation of Small Businesses, to test what forms of government support are most effective in increasing training levels for the self-employed.
    • £7 million worth of match funding alongside employers to provide on-the-job training to young people not currently in employment, education or training in Greater Manchester, and to move them into sustainable career paths with employers.
  • The Government will provide £38 million of capital funding to support implementation of the first three T-levels in 2020 across 52 providers.

 

Pensions and Savings

 

Pensions

  • The Government announced that the lifetime allowance for pension savings will increase in line with CPI for 2019-20, rising to £1,055,000.

 

Savings

  • The Government announced that the band of savings income that is subject to the 0% starting rate will be kept at its current level of £5,000 for 2019-20.
  • In addition the adult ISA annual subscription limit for 2019-20 will remain unchanged at £20,000. The annual subscription limit for Junior ISAs for 2019-20 will be uprated in line with CPI to £4,368.

 

Capital Investment

 

  • The Chancellor announced the abolition of Public Finnance Initiatives, but confirmed that he would continue to honour existing PFI contracts.

 

Science and Innovation

  • The Chancellor announced £1.6 billion of new funding for research and development, as part of the Government’s ambition to raise total R&D investment to 2.4% of GDP by 2027.
  • The Government announced that, as part of this investment in R&D, it will increase the Industrial Strategy Challenge Fund by £1.1 billion, to support emerging technologies. This will include:
    • Up to £121 million for Made Smarter, to support manufacturing through digitally-enabled technologies, such as the Internet of Things and virtual reality; and
    • Up to £78 million for the Stephenson Challenge, supporting innovation in electric motor technology, to make vehicles lighter and more efficient.
  • The Government announced a further £235 million to support the development and commercialisation of quantum technologies, including up to £70 million from the Industrial Strategy Challenge Fund, and £35 million to support a new national quantum computing centre.
  • The Chancellor announced that £115 million will be made available to extend funding for the Digital Catapult, which has centres in the North East, South East and Northern Ireland, and the Medicines Discovery Catapult in Cheshire.
  • The Government announced a new £50 million per year fund designed to address the most pressing challenges in areas such as public health and cyber security. The fund will focus on joint programmes between government and industry, and will begin in 2021-22.
  • The Chancellor announced £150 million of new funding for fellowships to boost scientific research. This will include £50 million specifically for AI through a new series of Turing AI Fellowships.
  • The Government announced an additional £120 million to the Strength in Places Fund, to support clusters of science and innovation excellence across the UK. This extends the existing programme until 2021-22.

 

Infrastructure and Transport

  • The Chancellor announced further expansion of the National Productivity Investment Fund, bringing it from £31 billion to £38 billion by 2023-24. This was not, however, the figure given in the full written Budget itself, which promises a rise to £37 billion.
  • The Chancellor announced a National Roads Fund of £28.8 billion between 2020 and 2025, to provide long term investment for the new major roads network and larger local schemes.
  • The Chancellor announced that eligibility to use e-passport gates at UK airports will be extended beyond solely travelers from the EEA to include those from the USA, Canada, Australia, New Zealand and Japan.
  • The Chancellor announced that £420 million will be made available to local authorities immediately to tackle potholes, bridge repairs, and other minor works in this financial year.
  • The Government announced an allocation of £200 million to pilot innovative approaches to deploying full fibre internet in rural locations, starting with primary schools, and with a voucher scheme for homes and businesses nearby. The first wave of this will include the Borderlands, Cornwall, and the Welsh Valleys.

 

Housing

  • The Chancellor announced a further £500 million for the Housing Infrastructure Fund, bringing the total budget to £5.5 billion, to create 650,000 new homes.
  • The Chancellor announced that the Housing Revenue Account cap which controls local authority borrowing for housebuilding will be abolished from 29 October 2018 in England, enabling councils to increase house building to around 10,000 homes per year.
  • The Chancellor announced a new wave of government partnerships with nine housing associations, providing £653 million to deliver 13,000 homes across England.
  • The Chancellor announced up £1 billion in British Business Bank guarantees to assist SME housebuilders.
  • The Chancellor announced that 19,000 new homes will be delivered in London by improving the Docklands Light Railway with £291 million from the Housing Infrastructure Fund.
  • The Chancellor announced that he will extend the cancellation of stamp duty for first time buyers on properties up to £300,00, to first-time buyers of shared ownership properties valued at up to £500,000. This will be applied retrospectively, so any first-time buyer who has made a purchase since the last Budget will benefit.
  • The Chancellor announced that part of the £675 million Future High Streets Fund will be made available to support high streets in conversion of unused commercial properties into housing, and that consultation is under way on simplification of the process for conversion.
  • The Government announced new Help to Buy regional price caps:
    • North East:                              £186,100
    • North West:                            £224,400
    • Yorkshire and The Humber:    £228,100
    • East Midlands:                        £261,900
    • West Midlands:                       £255,600
    • East of England:                      £407,400
    • London:                                   £600,000
    • South East:                              £437,600
    • South West:                            £349,000

 

Health

  • The Chancellor confirmed the earlier announcement that the NHS would receive an extra £20.5 billion in real terms over the next five years. The NHS’ gross budget will rise from £114.6 billion in 2018-19 to £147.8 billion in 2023-24.
  • The Chancellor announced that the NHS will increase mental health spending by over £2 billion by 2023-24, and that the 10 Year Plan will include a new Mental Health Crisis Service, which will include:
    • Comprehensive mental health support in every major A&E clinic;
    • Children and young peoples’ crisis teams across the UK;
    • More mental health ambulances;
    • More community “safe havens”; and
    • A 24-hour mental health hotline.
  • The Chancellor announced that local authorities in England will receive an extra £650 million in grant funding to bolster social care for 2019-20.
  • The Chancellor announced an additional £45 million for Disabled Facilities Grant in England for 2018-19.
  • The Chancellor announced £84 million of new funding over the next five years to expand children's social care programmes to include 20 further local authorities.
  • The Chancellor announced that an additional £10 million will be made available to support the work of air ambulances.

 

Education

  • The Chancellor announced a £400 million package of funding to schools, paid directly as an "in-year bonus", equating to £10,000 per primary school and £50,000 per secondary school.

 

Energy and Environment

  • The Government announced establishment of an Industrial Energy Transformation Fund, backed by up to £315 million of investment, to support businesses to transition from higher to lower energy use.
  • The Chancellor announced a pilot scheme of £10 million for abandoned waste sites
  • The Government announced that it is providing £20 million to tackle plactic use and boost recycling, including:
    • £10 million additional funding for R&D into plastics; and
    • £10 million to boost recycling and reduce litter by innovative means such as smart bins.
  • The Chancellor announced that while he is not convinced that a blanket levy on single-use cups is necessary at present, in light of the progress he notes already being achieved by the private sector, he will revisit this question in the event that this progress stalls.
  • The Chancellor announced a fund of £60 million for planting trees in England.
  • The Government announced £20 million of additional funding to support local authorities to meet their air quality obligations.

 

 

Regions

  • The Chancellor announced spending increases to the devolved administrations over the course of this parliament, including:
    • An additional £950 million for the Scottish Government;
    • An additional £550 million for the Welsh Government; and
    • An additional £320 million for the Northern Ireland Executive.
  • The Chancellor announced a new round of funding for City Deals, including:
    • £350 million for a Belfast City Region Deal in Northern Ireland;
    • £150 million for a Tay Cities Deal in Scotland; and
    • £120 million for a North Wales Growth Deal.
  • The Government announced an extension of the Transforming Cities Fund by a year to 2022-23. This will provide an extra £240 million to the six metro mayors for significant transport investment in their areas:
    • £21 million for Cambridgeshire and Peterborough;
    • £69.5 million for Greater Manchester;
    • £38.5 million for the Liverpool City Region;
    • £23 million for the West of England;
    • £71.5 million for the West Midlands; and
    • £16.5 million for Tees Valley.
  • The Government announced support for the Midlands Engine of up to £70 million to construct the national element of the Defence and National Rehabilitation Centre, which will aid recovery of civilians from debilitating injury and return to the world of work.
  • The Government announced that the West Midlands Combined Authority will receive up to £20 million to create the UK Mobility Data Institute, a research centre to collect, process and analyse transport data generated by new mobility technologies.

 

Defence and Home Affairs

 

  • The Chancellor announced an extra £1 billion in funding to the Ministry of Defence over the next two years, in addition to the £800 million already announced this year, with a particular focus on boosting the UK’s cyber defences.
  • The Chancellor announced an extra £160 million to fund counter-terrorism policing.
  • The Chancellor announced a £10 million donation to the Armed Forces Covenant Fund Trust, to support veterans with mental health needs.

 

Welfare

 

  • The Chancellor announced that the National Living Wage will increase by 4.9% from April 2019, from £7.83 per hour to £8.21 per hour. This will effect around 2.4 million workers and represent a £690 annual pay rise. The Government announced it will also accept all of the LPC’s recommendations for the other NMW rates to apply from April 2019, including:
    • increasing the rate for 21 to 24 year olds by 4.3% from £7.38 to £7.70 per hour 
    • increasing the rate for 18 to 20 year olds by 4.2% from £5.90 to £6.15 per hour 
    • increasing the rate for 16 to 17 year olds by 3.6% from £4.20 to £4.35 per hour
    • increasing the rate for apprentices by 5.4% from £3.70 to £3.90 per hour
  • The Chancellor announced the Government would be increasing the Universal Credit work allowances by £1,000, at a cost of £1.7 billion annually, to benefit 2.4 million households. He also announced an additional amount of funding worth £1 billion over the next five years for claimants transferring on to Universal Credit. This comes into force one year earlier than originally planned and will be linked to inflation by 2021/22.

 

OPPOSITION AND KEY STAKEHOLDERS RESPONSE

 

The Leader of the Opposition, the Rt Hon Jeremy Corbyn MP

“The reality is that whatever the Chancellor claims, austerity is not over. And far from building a strong economy, 8 years of austerity has damaged our economy, delayed and weakened the recovery and endlessly postponed fixing the deficit. What we’ve heard today are half measures and quick fixes while austerity grinds on. And far from people’s hard work and sacrifices having paid off, as the Chancellor claims, this Government has frittered it away in ideological tax cuts to the richest in our society.

 

The Shadow Chancellor, the Rt Hon John McDonnell MP

 “It is certainly not the end to austerity as we were promised today. The money going to the NHS was already announced, but all the health experts are saying it is not enough… on the other areas it is really disappointing, there is nothing for schools… there’s nothing for local policing and nothing for councils. We have a record number of children coming into care - they needed £1.5 billion and he’s given them £84 million.”

 

Other Key Stakeholder

 

"Nothing very substantial… with growth remaining stubbornly low and Brexit weighing down our economy, it is clear the big problems are still to be tackled. It was a sticking plaster budget, when major surgery lies ahead. If we are to see an end to austerity, then we need a proper injection of cash – at least £19bn according to the IFS – in our public services. The chancellor said he could end austerity without raising taxes, but that is highly unlikely in practice.”

- Sir Vince Cable, Leader of the Liberal Democrats

"Let's not kid ourselves the Tories are going to end austerity. This Tory government continues to balance the books on the shoulders of the poorest."                                                                                                   - Ian Blackford MP Leader of the                                                                                SNP at Westminster

“The budget does not undo the austerity that has devastated public services. And it lacks the investment needed to speed up wage growth after the longest pay squeeze in 200 years. People know that public services need much more investment. They feel the consequences of austerity where they live. There's more crime and less police. There’s longer NHS waiting lists and too few beds. And there's not enough teachers to educate our kids. With Brexit looming, we urgently need a national recovery plan to get the UK fit and ready. We will only have a strong economy and safe communities if we rebuild our public services.”

- Frances O’Grady, General Secretary of the Trade Unions Congress

In an atmosphere of unprecedented uncertainty and heightened political noise, the Chancellor has demonstrated that he is listening to business concerns by delivering a Budget that supports investment and growth. We are delighted that the Chancellor has listened to the voice of Chambers of Commerce and has boosted the Annual Investment Allowance to £1million. This will be a huge shot in the arm for businesses across the country, giving many thousands of firms renewed confidence to invest and grow… while today’s Budget measures were largely positive for business, the final and most important piece of the jigsaw is a comprehensive Brexit deal that gives firms the clarity and precision they need.”

- Dr Adam Marshall, Director General of the British Chambers of Commerce

“The Chancellor showed he has listened to business leaders today with key reforms on business rates, the Apprenticeship Levy and the Annual Investment Allowance. But for all of the individual positive measures, including money for infrastructure upgrades, this was a Budget that pulled its punches.”

Stephen Martin, Director General of the Institute of Directors

 

“Philip Hammond has brought more treats than tricks for business. [The Budget] recognises the enormous contribution enterprise has made to balancing the UK’s books through jobs, pay and tax and responds to many of the recommendations that firms have made. But while the Chancellor has reduced some of biggest barriers to growth, he has missed some opportunities.”

- Carolyn Fairbairn, Director General of the Confederation of British Industries

 

"It’s about what is not there… we don't have a Spending Review total which the Chancellor promised us in the Spring Statement… arguably the Chancellor has just about got to the minimal definition of the ending of austerity and it's certainly nothing like a bonanza for the rest of public services."

– Paul Johnson, the Director of the Institute for Fiscal Studies

 

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