Autumn budget 2018 - part one
Today the Chancellor reported that the hard work of the British people is paying off: our careful fiscal management and solid economic recovery means that austerity is coming to an end.
The Office for Budget Responsibility (OBR) reports a significant upgrade to Britain's public finances, underscoring the strength of the economic recovery.
Austerity is coming to an end – but discipline remains. That is the clear dividing line in British politics today: a Conservative Government taking a balanced approach and getting debt down. Or Jeremy Corbyn whose version of ending austerity would be to raise taxes to the highest level in peacetime history and send debt soaring – taking us back to square one.
Economy and public finances
The independent Office for Budget Responsibility (OBR) has published its updated outlook for the economy and public finances.
Key points on the economy:
· Economic growth has been revised up – the growth forecast for next year has been revised up from 1.3 per cent to 1.6 per cent.
· Employment has been revised up – with 800,000 more jobs in 2023 than previously forecast.
· Wages are set to rise above inflation in each of the next five years.
Key points on public finances:
· We have met our borrowing target three years early – the deficit is now down to 1.9 per cent of GDP from almost 10 per cent under Labour (The target was 2.0 per cent).
· We have also met our debt target three years early – the national debt fell as a share of GDP this year, to 85 per cent, and will fall in each of the next five years (the target was that debt should fall as a share of GDP).
Key Budget measures
· Overall investment in public services will increase in real terms over the next five years. Public spending will increase overall by 1.2 per cent in real terms each year, with precise plans to be set out at the Spending Review.
· Funding the Prime Minister’s NHS commitment. We have fully-funded the cash settlement that was set out in June – which equates to £20.5 billion more in real terms by 2023-24, and an average real growth rate in the NHS’s budget of 3.4 per cent a year.
· Fulfilling our promises on income tax one year early, so people keep more of what they earn. We will raise the Personal Allowance to £12,500 and Higher Rate Threshold to £50,000 one year early, saving a typical basic rate taxpayer £130 compared to 2018-19 and £1,205 compared to 2010-11. Nearly 1 million fewer people will pay the higher rate of income tax.
· Supporting our councils with an additional £1 billion of funding. We will support councils with £650 million for social care, £84 million for children’s social care programmes over five years and £420 million for potholes this year.
· Backing high streets by cutting business rates by a third for two years. Rates will be cut by a third for retailers with rateable value under £51,000, saving up to 90 per cent of all shops up to £8,000 each year.
· Investing an additional £1.7 billion per year to benefit working families on Universal Credit. We will increase the work allowance – the amount families can earn before losing benefits – by £1,000, worth £630 per year to those households.
· Providing £500 million more to ensure Britain is prepared for Brexit: the Chancellor had already set aside £1.5 billion next year to prepare for all eventualities – today the government increased that by £500 million to £2 billion.
· A 2 per cent Digital Services Tax will ensure large digital firms pay a fair share of tax to support our public services. From 2020, large social media platforms, search engines and online marketplaces will pay 2 per cent on revenues linked to UK users.
Helping families with the cost of living
· Increasing the National Living Wage by nearly 5 per cent, from £7.83 to £8.21. This will deliver a £690 annual pay rise to a full-time worker, taking the total annual pay rise since its introduction to £2,750.
· Fulfilling our promise to cut income tax one year early, so people keep more of what they earn. We will raise the Personal Allowance to £12,500 and Higher Rate Threshold to £50,000 one year early, saving a typical basic rate taxpayer £130 compared to 2018-19 and £1,205 compared to 2010-11. Nearly 1 million fewer people will pay the higher rate of income tax.
· Tackling problem debt and payday lenders with a No-interest Loan Scheme. We will conduct a study looking at how an Australian-style no-interest public loan scheme could work in the UK. We will also increase the ‘breathing space’ period to protect those with problem debt from creditor action from six weeks to 60 days.
· Investing an additional £1.7 billion per year to benefit working families on Universal Credit. We will increase the work allowance – the money families can earn before losing benefits – by £1,000, worth £630 per year to those households.
· Freezing fuel duty for the ninth year, saving the average car driver a cumulative £1,000 by April 2010. · Freezing beer, cider and spirits duty for another year, supporting patrons of the Great British pub and saving people 2p on a pint of beer and 30p on a bottle of Scotch or gin.
· Keeping Air Passenger Duty for short haul flights at current levels. Short-haul rates will not rise for the eighth year in a row, benefiting 80 per cent of passengers and keeping the cost of the family holiday down.
· Rolling out the 26-30 railcard on a permanent basis, giving young people a third off their fares.
The Office for Budget Responsibility (OBR) reports a significant upgrade to Britain's public finances, underscoring the strength of the economic recovery.
Austerity is coming to an end – but discipline remains. That is the clear dividing line in British politics today: a Conservative Government taking a balanced approach and getting debt down. Or Jeremy Corbyn whose version of ending austerity would be to raise taxes to the highest level in peacetime history and send debt soaring – taking us back to square one.
Economy and public finances
The independent Office for Budget Responsibility (OBR) has published its updated outlook for the economy and public finances.
Key points on the economy:
· Economic growth has been revised up – the growth forecast for next year has been revised up from 1.3 per cent to 1.6 per cent.
· Employment has been revised up – with 800,000 more jobs in 2023 than previously forecast.
· Wages are set to rise above inflation in each of the next five years.
Key points on public finances:
· We have met our borrowing target three years early – the deficit is now down to 1.9 per cent of GDP from almost 10 per cent under Labour (The target was 2.0 per cent).
· We have also met our debt target three years early – the national debt fell as a share of GDP this year, to 85 per cent, and will fall in each of the next five years (the target was that debt should fall as a share of GDP).
Key Budget measures
· Overall investment in public services will increase in real terms over the next five years. Public spending will increase overall by 1.2 per cent in real terms each year, with precise plans to be set out at the Spending Review.
· Funding the Prime Minister’s NHS commitment. We have fully-funded the cash settlement that was set out in June – which equates to £20.5 billion more in real terms by 2023-24, and an average real growth rate in the NHS’s budget of 3.4 per cent a year.
· Fulfilling our promises on income tax one year early, so people keep more of what they earn. We will raise the Personal Allowance to £12,500 and Higher Rate Threshold to £50,000 one year early, saving a typical basic rate taxpayer £130 compared to 2018-19 and £1,205 compared to 2010-11. Nearly 1 million fewer people will pay the higher rate of income tax.
· Supporting our councils with an additional £1 billion of funding. We will support councils with £650 million for social care, £84 million for children’s social care programmes over five years and £420 million for potholes this year.
· Backing high streets by cutting business rates by a third for two years. Rates will be cut by a third for retailers with rateable value under £51,000, saving up to 90 per cent of all shops up to £8,000 each year.
· Investing an additional £1.7 billion per year to benefit working families on Universal Credit. We will increase the work allowance – the amount families can earn before losing benefits – by £1,000, worth £630 per year to those households.
· Providing £500 million more to ensure Britain is prepared for Brexit: the Chancellor had already set aside £1.5 billion next year to prepare for all eventualities – today the government increased that by £500 million to £2 billion.
· A 2 per cent Digital Services Tax will ensure large digital firms pay a fair share of tax to support our public services. From 2020, large social media platforms, search engines and online marketplaces will pay 2 per cent on revenues linked to UK users.
Helping families with the cost of living
· Increasing the National Living Wage by nearly 5 per cent, from £7.83 to £8.21. This will deliver a £690 annual pay rise to a full-time worker, taking the total annual pay rise since its introduction to £2,750.
· Fulfilling our promise to cut income tax one year early, so people keep more of what they earn. We will raise the Personal Allowance to £12,500 and Higher Rate Threshold to £50,000 one year early, saving a typical basic rate taxpayer £130 compared to 2018-19 and £1,205 compared to 2010-11. Nearly 1 million fewer people will pay the higher rate of income tax.
· Tackling problem debt and payday lenders with a No-interest Loan Scheme. We will conduct a study looking at how an Australian-style no-interest public loan scheme could work in the UK. We will also increase the ‘breathing space’ period to protect those with problem debt from creditor action from six weeks to 60 days.
· Investing an additional £1.7 billion per year to benefit working families on Universal Credit. We will increase the work allowance – the money families can earn before losing benefits – by £1,000, worth £630 per year to those households.
· Freezing fuel duty for the ninth year, saving the average car driver a cumulative £1,000 by April 2010. · Freezing beer, cider and spirits duty for another year, supporting patrons of the Great British pub and saving people 2p on a pint of beer and 30p on a bottle of Scotch or gin.
· Keeping Air Passenger Duty for short haul flights at current levels. Short-haul rates will not rise for the eighth year in a row, benefiting 80 per cent of passengers and keeping the cost of the family holiday down.
· Rolling out the 26-30 railcard on a permanent basis, giving young people a third off their fares.
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