In the face of his and his Party’s diminished political capital and an underperforming economy, Hammond has delivered a “safety first” budget, avoiding controversies while placating fellow MPs through additional spending. This includes the reluctant provision of an additional £3bn for Brexit contingency planning in response to accusations he had not set aside adequate contingencies for a “no deal” Brexit. This announcement may be enough to save Hammond from his Brexiteer critics, though this is by no means for certain.
As expected, given the Conservatives’ low and falling poll ratings amongst younger voters, it comes as no surprise that if any of today’s policy offerings were juicy, it was those targeted at a younger demographic. In an attempt to stem the flow of these younger voters to Labour, Hammond has offered significant assistance to first-time buyers across the UK.
Most significantly, this afternoon he announced that stamp duty will be abolished immediately for first-time buyers purchasing properties up to £300,000, or £500,000 in London.
On the supply side, he announced additional measures including £44bn in government support to boost construction skills, as well as the compulsory purchase of any land banked by developers for “financial reasons”, backed up by a review into the gap between planning permissions and actual developments.
In a further sop to younger voters, and as announced earlier this week, new government-subsidised railcards for those aged between 26-30 will also be introduced.
The Chancellor had been pushed into a corner by the sheer number of demands to which he has had to respond. Constituencies including hospital nurses and children have competed with ardent Brexiteers and young professionals for funding, while the economy’s underperformance has given him little room for manoeuvre.
So far he seems to have given enough to these groupings to avoid attack, but the numbers are still being crunched by every interest group in the country. The scale of tension in advance of the delivery of this Budget suggests that if any reason to call for his head can be found, it will be.
Key policy announcements
• £3bn over the next two years to be set aside for Brexit contingency planning
• Stamp duty to be abolished immediately for first-time buyers purchasing properties worth up to £300,000, or £500,000 in London
• Compulsory purchase of land banked by developers for financial reasons and a review into delays in developments going forward once planning permission is granted, led by the Rt Hon Oliver Letwin MP
• £2.8bn additional NHS funding in England
• £10bn capital investment fund for hospitals
• An additional £2.3bn for investment in R&D
• VAT threshold for small business to remain at £85,000 for next two years
• Government ‘Action Plan’, to unlock over £20bn of new investment in UK scale-up businesses
• New fund in the British Business Bank, seeded with £2.5bn of public money
• £40m teacher training fund for underperforming schools in England
• £84m to hire 8,000 new computer science teachers
• £49.9bn this year, down by £8.4bn from
previous forecast. Down from £39.5bn next year to £25.6bn in 2022-23.
• £10bn capital investment in frontline services over the course of this parliament.
• £2.8bn of extra funding for England.
• Basic rate rises to £11,850 from April; 40% threshold increases to £46,350.
• £1.7bn transforming cities fund
Scotland, Wales and Northern Ireland
• £650m extra for Northern Ireland
• £2bn extra for Scotland
• £1.2bn extra for Wales
“Against a sombre economic backdrop, the Chancellor today gripped the steering wheel on the UK economy. This is a budget that balances support for people on squeezed incomes with vital action to help grow the UK out of austerity. But delivery is everything”
Carolyn Fairbairn, Director-General, Confederation of British Industry.
“The reality test of this Budget has to be how it affects ordinary people’s lives. I believe as the days go ahead and this Budget unravels, the reality will be a lot of people will be no better off and the misery many are in will be continuing”
Rt Hon Jeremy Corbyn MP, Leader of the Labour Party
“This is – as the Chancellor quite rightly pointed out – a budget for the future, with investment clearly targeted at ensuring that Britain’s economy is fit for the 21st-century. I applaud the Chancellor for this bold offering, and for his lauding of Britain’s continued economic strength as we leave the European Union.” –
James Wharton Senior Adviser, Hume Brophy, Minister for the Northern Powerhouse and International Development, 2015-17; Conservative MP for Stockton South, 2010-17
“The downgrading of economic growth, productivity and business investment are a real concern, which will limit Britain’s competitiveness in the future. The chancellor is trying to combat this through expansion of tax credits and emphasis upon knowledge-based industries. These are welcome, although the proposed changes are small in relation to the massive challenges.”
Iain Wright, Senior Adviser, Hume Brophy , Chair of the Business, Energy and Industrial Strategy/Business, Innovation and Skills Committee, 2015-17; Labour MP for Hartlepool, 2004-17