Budget summary 2018: the key points from Philip Hammond's speech
Philip Hammond today told MPs that “austerity is finally coming to an end” as he delivered his last Budget speech before the official Brexit date.
The Chancellor said the Office for Budget Responsibility (OBR) expected "resilient" growth over the coming years.
And in the final scheduled Budget before Brexit, Mr Hammond announced an extra £500 million for preparations and hinted that there would be an emergency budget in Spring.
He announced cash injections for defence and schools, cuts to business rates, a freeze on beer and cider duty and spirit duty for the next year and a rise in the National Living Wage.
Here are the key points from Mr Hammond’s Budget speech:
- Stamp Duty abolished for all first-time buyers of shared ownership properties valued up to £500,000, applied retrospectively to the date of the last Budget.
- A freeze on beer and cider duty for the next year and a freeze on spirits duty, saving 2p pint of beer, 1p on pint of cider and 30p on bottle of scotch or gin.
- National Living Wage will rise in April from £7.83 to £8.21
- New Millennial railcard available by end of year
- Income tax personal allowance threshold to rise to £12,500 from April 2019.
- Higher rate income tax threshold to rise to 50,000 at the same time.
- Counter-terrorism police to get an extra £160 million funding for 2019/20.
- A one-off £400 million payment to schools to allow them to “buy kit”, an average of 10,000 per primary school and £50,000 for secondary schools.
- An extra £1 billion for the Ministry of Defence
- Business rate bills cut by one-third for the next two years for all retailers in England with a rateable value of £51,000 or less, delivering an annual saving of up to £8,000 for up to 90% of all independent shops, pubs, restaurants and cafes.
- Start-Up Loans funding to be extended to 2021, helping 10,000 entrepreneurs.
- New tax on manufacture and import of plastic packaging that contains less than 30 per cent of recycled plastic.
- The Private Finance Initiative (PFI) and its successor PFI2 abolished for future Government projects.
- UK Digital Services Tax to be introduced in April 2020 targeting online giants with more than £500 million in global revenues.
- Freeze fuel duties for ninth consecutive year.
- An immediate £420 million payment to tackle potholes, bridge repairs and other minor road works.
- An extra £1 billion over five years for the Universal Credit benefit programme.
- NHS funding to rise to £20.5 billion in real terms over the next five years and a new mental health crisis service to be included in the NHS 10-year plan.
GDP Growth Forecasts, borrowing and debt
The OBR upgraded its forecast for GDP growth in 2019 from 1.3% to 1.6%, then 1.4% in 2020 and 2021; 1.5% in 2022; and 1.6% in 2023.
Borrowing this year will be £11.6 billion lower than forecast at the Spring Statement, at 1.2% of GDP, and is then set to fall from £31.8bn in 2019/20 to £26.7bn in 2020-21, £23.8bn in 2021/22, £20.8bn in 2022/23 and £19.8bn in 2023/24.
Debt peaked in 2016/17 at 85.2% of GDP and then falls in every year of the forecast from 83.7% this year; to 74.1% in 2023/24, allowing the Government to meet its target to get debt falling three years early.
