Published:

Hammond declares an “end to austerity” several times, claiming stronger growth and tax receipts allow him to cut taxes and start spending, looking towards a a hopeful Brexit “double dividend”

“Philip Hammond used the biggest giveaway budget since the Tories came to power in 2010 to cut taxes and spend billions as he declared that the era of austerity was coming to an end. The chancellor spent a windfall from upgraded growth and better deficit forecasts to ease but not halt austerity, cancelling welfare cuts and funding the increase in health spending promised in June. Rather than deliver a budget surplus in five years, he loosened the purse strings by £103 billion to cut taxes for 32 million workers and increase spending across Whitehall. With European Union talks about to enter a critical phase Mr Hammond also sought to buy off potential Tory and DUP rebels with a series of targeted giveaways.” – The Times 

  • He says “we are at a pivotal moment in EU negotiations”, and the dividend will come from “getting it right” – Daily Telegraph
  • He speaks of a “three-pronged approach” to Brexit – Daily Express
  • He thanks the “OBR’s largest borrowing upgrade in five years” – The Times 
  • The forecasts were somewhat “subdued” – FT
  • More jobs have been predicted – The Sun
  • Hammond spoke for a very long time – Daily Telegraph
  • And Truss sat on Javid’s knee – Daily Mail 

Analysis:

  • The days of prudence are gone – The Times 
  • This was the “largest budget giveaway since 2010” – FT
  • It’s a question of “easing” not ending the harshness – Guardian
  • Here’s what austerity actually is – The Sun

Comment:

  • It was a good budget – William Hague, Daily Telegraph
  • No, it was gimmicky – Richard Littlejohn, Daily Mail
  • Hammond’s found his own magic money tree – Allister Heath, Daily Telegraph
  • He’s done well – Robert Colvile, The Sun
  • Austerity is not over – David Laws, The Times
  • Why didn’t Hammond talk about the UK’s “sluggish” growth? – Mark Littlewood, The Times

Editorials:

>Today: 

>Yesterday: 

He ups the personal allowance a year earlier than previously promised

“Philip Hammond has unveiled a post-Brexit tax cut for 32million workers and declared that the era of austerity is “finally coming to an end” with a £100bn package of public spending over the next five years. In one of the biggest giveaway Budgets in recent history, the Chancellor revealed that improvements in the economy will set a “new path for public spending” to help “strivers, grafters and carers”. He pledged to bring forward income tax cuts by a year to April 2019, a month after Brexit, in a move that will save higher rate taxpayers an average of £495 a year and basic rate taxpayers an average of £130. As revealed by The Daily Telegraph on Saturday, the personal allowance, the rate at which people begin paying income tax, will now rise to £12,500 in April next year while the threshold for the higher rate of income tax will rise to £50,000.” – Daily Telegraph

  • The living wage will also increase from April – The Times
  • There’s an a £680 cut for those earning over £50,000 – Guardian
  • But “little” for for low earners – Guardian
  • Here’s what it could mean for you – Daily Mail
  • It’s not such good news for the self-employed again – Daily Mail 

>Yesterday: WATCH: The Budget – Hammond 6) The pièce de résistance. Income tax cuts next year.

Duncan Smith: Hammond has “saved” universal credit with his £4.5bn boost

“The Chancellor used his Budget to make a very welcome announcement: further investment of £1.7 billion into Universal Credit (UC). Work remains the best route out of poverty and, as Philip Hammond made clear, the extensive welfare reforms since 2010, of which UC is a vital part, have been the key drivers of the UK’s jobs miracle, resulting in 4 million more people in employment. But the roll-out of Universal Credit was made more difficult than it should have been following cuts in 2015, a fact leapt on by the Labour Party. Many reading this column will not have had experience of UC or perhaps of the benefits it replaces, so a little explanation may be required as to why it was so important to put this reform back on track. Back in 2010, the reason behind introducing Universal Credit was very clear.” – Daily Telegraph

  • He promised £6.6bn for welfare reform – The Sun

There’s a “big win” for defence…

“The MoD was yesterday’s biggest winner, landing a total of £1.8billion more from the Chancellor this year and next. Defence Secretary Gavin Williamson was delighted with the win, as it meant he no longer has to make any capability cuts over the next 18 months. But a long-term solution to his ministry’s £20billion blackhole over the next decade was delayed until the Whitehall-wide spending review, expected next summer. The extra defence cash will go on cyber, anti-submarine warfare capacity, and the next generation Dreadnought subs to carry the nation’s Trident nuclear deterrent. Mr Hammond said he was acting because the last year had thrown up “stark reminders of the scale, scope and complexity of the threats we face”… Campaigning former Army officer-turned Tory MP Johnny Mercer dubbed the defence injection “good news” as it meant an end to “the madness of the proposed in year cuts”.” – The Sun

.. and for the NHS. social care, and mental health…

“Billions of pounds will be pumped into the NHS, social care, mental health and defence, while the troubled Universal Credit benefits reforms will be bailed out with another £1billion of ‘transitional’ protections and £1.7billion in improved work allowances – effectively reversing cuts previously imposed by George Osborne. … There had been speculation that Mr Hammond was penned in after the PM promised to inject £25billion extra into the NHS by 2023. … He confirmed that the first stage of the NHS long-term plan will be to help achieve ‘parity of esteem’ between mental and physical health services. Mr Hammond argued that pumping £2billion a year into improving access to support will relieve pressure on other frontline services, such as the police that help people with mental health issues every day and sometimes have to use police station cells. Officials say it will be backed up with more mental health ambulances and the establishment of dedicated mental health teams in schools, linking them to other support services.” – Daily Mail 

  • And for schools … though teachers were “offended” by Hammond’s language – The Times 
  • All schools to get mental health team – Daily Telegraph

He announces a digital services tax

“The government has announced a special digital services tax on US technology firms – including Google, Facebook and Amazon – to make sure “these global giants with profitable businesses in the UK pay their fair share”. Philip Hammond, the chancellor, said the UK could no longer wait for “painfully slow” discussions on an international agreement on tackling tech firms’ tax avoidance. He said the UK would go it alone and introduce the tax on online firms that make more than £500m a year globally. Hammond said he expected the “narrowly targeted tax”, which will come into force in April 2020, to raise more than £400m a year for the exchequer. However, Office for Budget Responsibility (OBR) forecasts suggest the tax could raise just £30m each from the likes of Facebook, Amazon and Google. The levy will be charged at a rate of 2% and only apply against revenue from search engines, social media platforms and online marketplaces.” – Guardian

  • It’s “just 2 per cent” – Daily Mail 
  • It targets US giants – FT
  • Meanwhile, there’ll be no further PFI or PFI2 schemes – Guardian

Comment: 

  • A stand against the digital giants, finally! – Nils Pratley, Guardian

>Yesterday: WATCH: The Budget – Hammond 4) His new “Amazon tax”

And some housing measures, along with a cut in business rates for smaller retailers, and a boost for the high street

“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. Help to Buy – the scheme under which the government loan money to first-time buyers has been extended for two years. It was due to end in April 2021… Business rates – bills to be 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 cafés … High street – £650 million future high streets fund co-funded by the government to help councils improve high streets through better transport links, redevelopment of empty shops as homes and offices and to restore and re-use old and historic properties.” – The Times

There’s a freeze on fuel, beer, and spirits, but not for wine

“Tobacco, alcohol – the duty escalator, in which the tax on tobacco increases by two percentage points above the retail price index measure of inflation, took effect last night. Duties on beer, most cider and spirits will be frozen. However, the duty on most wine and higher strength sparkling cider will rise by retail price index inflation from February.” – The Times

  • Wine was left out, but maybe not weddings – FT
  • Cigarettes also left out – The Sun

Will McKay take Hammond’s lead when it comes to Scottish income tax?

“The income tax differential between Scotland and England is set to grow much wider much faster as Philip Hammond announced that the age of austerity was finally “coming to an end”. The unexpected fiscal move by the Chancellor – in the last Budget before Brexit – piles pressure on Derek Mackay, the Scottish Finance Secretary, to act on income tax. He delivers his own financial statement to Holyrood in December. Earlier this year, Mr Mackay introduced new income tax rates and bands such as the new 19p starter rate for those on low incomes and put a penny on the higher rate of income tax at 41 per cent.” – Herald

Money through the Belfast City Deal helped ensure a “mostly warm welcome” from the DUP

“The Belfast region will receive £350 million under the City Deal scheme, the Chancellor Philip Hammond has announced. The Budget announced by Mr Hammond at Westminster today received a mostly warm welcome from the DUP, who had warned it could oppose the government’s plans unless it received assurances on Brexit. But DUP MP Sammy Wilson said there was “good news in this budget for Northern Ireland”. He highlighted a £320 million increase in the block grant due to the way funding for UK regions is calculated, known as the Barnett formula. A further £300 million was also announced for shared and integrated education, while £2 million was earmarked for Belfast city centre to aid in the recovery from a major fire at the Primark outlet on Castle Street in August.” – Belfast News Letter

  • This was just one of Hammond’s “targeted giveaways” – The Times 
  • …including a £1bn “windfall for Scotland” – Daily Telegraph

>Today: Henry Newman’s column: A dozen reasons to unstop the backstop

More Conservatives 

News in Brief

  • This budget is a “turning point” – Oliver Wiseman, CapX
  • Move over, Corbyn – Katy Balls, Spectator
  • What were those jokes? – Finn McRedmond, Reaction
  • Keep an eye on the Pennsylvania pipeline – Dorothy Wickenden, New Yorker 

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