Philip Hammond is delivering his Autumn Budget to the House Of Commons, as the embattled chancellor tries to reassure voters that Theresa May’s weakened Government can deliver.
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Hammond announced another £3 billion over two years would be set aside in preparation for Brexit, on top of £700 million already invested. “No one should doubt our resolve,” he said. “But this Budget is about much more than Brexit.”
The Office of Budget Responsibility has downgraded its forecast for productivity growth, business investment and GDP, which it now expects to grow 1.5% in 2017 rather than 2%, 1.4% in 2018, 1.3 in both 2019 and 2020. Every GDP forecast until 2021/22 has been downgraded.
“Regrettably our productivity performance continues to disappoint,” he said, adding it “remained stubbornly flat.”
Borrowing is forecast to fall: £49.9bn this year, £39.5bn next year to £25.6bn by 2022-23, the lowest for 20 years.
Debt will peak at 86.5% of GDP this year but fall to 79.1% in 2022-23, “the first sustained decline in debt in 17 years”, Hammond says.
Theresa May’s spokesman said the Budget would “adopt a balanced approach, continuing to restore the public finances to health while investing in the NHS and public services and tackling the chronic shortage of housing”.
He added it would mean “significant investments for the future in skills, infrastructure and research and development”.
As he began, Hammond said the world was on “the brink of a technological revolution” and Britain was at the forefront. He promised “a Britain we can be proud of… …a country fit for the future”, using the Budget’s slogan. “I know we will not build it overnight… …but in this Budget we will lay the foundations,” he said. However, as HuffPost’s Paul Waugh reported last night, Hammond’s ‘fit for the future’ Budget slogan has been revealed as a byword for cuts programmes.
Hammond is casting this Budget as one for the future, while accusing Labour of “turning inwards to the failed and irrelevant dogmas of the past”.
The basic rate income tax threshold will rise to £11,850 in April 2018 and higher rate threshold to rise to £46,350.
Hammond announces a drive to boost electric cars: new £400 million charging infrastructure fund, n extra £100 million Plug-In-Car Grant, and £40 million in charging R&D.
Road tax for diesel cars that do not meet latest standards is to rise in April and the existing diesel supplement in Company Car Tax is also going up, he said, adding those buying cleaner diesel cars would not be affected.
Another £20m to support Further Education colleges to teach T-Levels for those doing apprenticeships.
The National Productivity Investment Fund will be extended by a year and expanded to more than £31bn.
Hammond announced there will be a £1.5bn package to respond to “genuine concerns” over the rollout of Universal Credit.
The Chancellor said the advances system would be improved to provide more support during the waiting period, which will be cut from six weeks to five. Claimants will now be able to access an advanced full month’s payment within five days of applying, Hammond said. Advances will now be repayable over 12 months, not six. Any new claimant receiving Housing Benefit will continue to receive that money for two weeks.
Duty increase on white ciders will rise but on ciders, wines, spirits and beer it will be frozen to “back our Great British pubs”. “So, Merry Christmas.”
Hammond mocked reports that Environment Secretary Michael Gove had been auditioning for the job of Chancellor by using “long economicky words” during Cabinet meetings. “This is the bit with the ‘long economicky words’,” he said, introducing the economic forecasts.
He gets an unintended laugh from the Labour benches when he praises “driverless vehicles”. “Surely they don’t want me to tell that joke about the Labour Party?” he asks the Deputy Speaker.
On electric cars, he tells Labour’s leader: “I know Jeremy Clarkson doesn’t like them, but there are many other good reasons to pursue this technology so today we step up our support for it. Sorry Jeremy, not the first time you’ve been snubbed by Hammond and May.”
Private jets are to get more expensive. “Sorry Lewis,” Hammond says, amid stories about Lewis Hamilton’s own aircraft.