Leading the BID industry
Leading the BID industry
Budget 2018: 'Era of austerity coming to an end'
Today, Philip Hammond delivered the Autumn Budget as Chancellor. It was the first Monday Budget since 1962.
In this email we bring you a summary of the Budget. Before we get into the core of the Budget, whilst it's an important day, the Spending Review next year is the really big debate, particularly over government taxes and expenditure, and Brexit is still a great unknown.
In the lead up to the Budget, the Confederation of British Industry (CBI) predicted that it was crucial to make it easier for businesses to be able to invest, saying “it's the only way we will grow our way out of austerity”, and Julie Palmer, partner at Begbies Traynor, says cutting business rates will be welcome, but more needs to be done. She suggested that “the old rates system still needs to be adjusted for a modern trading environment, otherwise when the stimulus ends the old issues will return.”
Philip Hammond stated that he expects government borrowing this year will be £11.6bn lower than forecast at the Spring Statement. It 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 - its lowest level in more than 20 years.
He proposed:
A new mental health crisis service with "comprehensive mental health support available in every major A&E", as well as "children and young peoples’ crisis teams in every part of the country".
Another £650m of grant funding for English councils for 2019-20 and an additional £45m for the disabled facilities grant in England in 2018-19. He also pledges a further £84m over the next five years to expand children's social care programmes to 20 further councils.
Another £1bn for the MoD this year and next "to boost our cyber capabilities and our anti-submarine warfare capacity".
Pledges £400m to schools as an "in-year bonus". The money averages £10,000 per primary school and £50,000 per secondary school. It will help the schools "buy the little extras they need", he says.
A £30bn package for England's roads, including repairs to motorways and potholes (announced on 27 October).
A UK Digital Services Tax. He stresses it is not an online sales tax on goods bought online and will only be paid by profitable firms that have at least £500m a year in global revenues. There will be a consultation first before the tax comes into effect in April 2020. It is expected to raise more than £400m a year, Mr Hammond says.
No change to level of entrepreneurs’ relief available, but ownership period doubled to two years to better target relief that is worth up to £1m to business owners.
He also confirms that £420m will be made available "to tackle potholes, bridge repairs, and other minor works in this financial year".
The government plans to abolish the use of the private finance initiative (PFI) for future projects. He says there is compelling evidence that it does not deliver value for taxpayers or genuinely transfer risk to the private sector. However, the Chancellor says the government will honour existing contracts.
The Chancellor promises to help small shops by cutting business rates by a third for all retailers in England with a rateable value of £51,000 or less. That will mean an annual saving of "up to £8,000 for up to 90% of all independent shops, pubs, restaurants and cafes".
Mr Hammond announces £675m of co-funding to create a "Future High Streets Fund" to support councils to draw up plans for the transformation of their High Streets. Mr Hammond says this will allow them to invest in the improvements they need and to facilitate redevelopment of under-used retail and commercial areas into residential.
The chancellor announces a new tax on the manufacture and import of plastic packaging that contains less than 30% recycled plastic. However, he says it has no plans to introduce a levy on disposable plastic cups.
Philip Hammond says he will extend the cancellation of stamp duty for first time buyers on properties up to £300,000 to first-time buyers of shared ownership properties valued at up to £500,000. This measure will be retrospective, so any first-time buyer who has made a purchase since the last Budget will benefit.
The Chancellor also announces a further £500m for the Housing Infrastructure Fund, to help get a further 650,000 homes built. He also says he will make it easier for neighbourhoods to allocate or permission land for housing.
Fuel duties are frozen for the ninth successive year while duty on beer, cider and spirits will be held for the next year.
Philip Hammond says he will raise the personal allowance tax threshold a year early. From April next year, the personal allowance will be £12,500 and the Higher Rate Threshold will be £50,000.
All in all, British BIDs welcomes the measures in the Budget, particularly commitments on infrastructure and business rates. However, BIDs and levy payers will monitor the impact of housing and pay policies to ensure their impact on the local trading environment is as managed as possible.
Professor Christopher Turner, Chief Executive, British BIDs
