First time buyers will benefit from not having to pay stamp duty on homes costing £300,000 or less, the chancellor has announced.
Philip Hammond, delivering his budget to the House of Commons, also announced that the first £300,000 would be exempt from tax duty on homes up to £500,000 in high price areas, helping aspiring homeowners who may feel restricted by the cost of living in London.
In a gag-filled speech which referenced Theresa May’s coughing at the Conservative party conference and TV presenter Jeremy Clarkson ‘being snubbed by Hammond and May’, the chancellor also outlined plans to build 300,000 extra new homes a year by the mid 2020s.
“This is our plan to deliver on the pledge we have made to the next generation that the dream of home ownership will become a reality in this country once again,” he said.
Mr Hammond added that in London, 270,000 residential planning permissions are unbuilt. He announced an urgent review, chaired by Sir Oliver Letwin, will look at the gap, with an interim report due by spring statement.
He also pledged a wide-reaching £44 billion package to support the housing market and get more people working within the construction industry, and annouced a 100 per cent council tax premium on empty properties.
Other announcements made during the speech, which lasted for just over an hour, included a rise in the national living wage from April, increasing from £7.50 an hour to £7.83.
Reacting to the budget, which is broken down below, Labour leader Jeremy Corbyn said: “The reality test of this budget has to be how it affects ordinary people’s lives.
“I believe as the days go ahead and this budget unravels, the reality will be a lot of people will be no better off and the misery many are in will be continuing.”
Benefits
Mr Hammond announced a £1.5bn reform to Universal Credit that will remove the seven day waiting period so entitlement starts on the day of the claim and to ensure that any household needing an advance can access a full month’s payment within five days of applying. He said that any new Universal Credit claimant in receipt of housing benefit will continue to receive it for two weeks. Previoiusly, it was stopped, meaning that 2.3 million households will be £230 better off on average.
Transport
As had previously been announced, a new railcard will be introduced allowing 26 to 30-year-olds to get a third off all off-peak train journeys and some peak journeys, although a minimum fare will apply. The biggest criticism, though, is the same as with all existing railcards: It can’t be used with a season ticket, which is the most common (and usually the most cost-effective) way for commuters to travel to work.
Electric vehicles will be given a boost with the introduction of a £400 million charging infrastructure fund. There wil also be an extra £100m in plug-in-car grant, and £40m for research and development into charging.
The fuel duty rise for both petrol and diesel which had been planned for April has been cancelled, but diesel cars will have to pay a higher road tax.
Education
Mr Hammond declared “more maths for everyone” as he pledged to introduce a new maths premium of £600 for schools and colleges in England for every sixth former who takes A-level or core maths qualifications. He added that there be £40m available to train maths teachers and pledged to set up more maths schools.
The number of trained computer science teachers will be tripled to 12,000 to ensure that all secondary school pupils can study the subject. He added that the government also plans to work with industry to create a new national centre for computing.
The chancellor also announced plans to work on a national retraining scheme, which will focus initially on digital skills and the construction sector.
There will also be £20m for further education colleges to help them to prepare for T-levels - a new vocational qualification.
Brexit
The chancellor will set aside £3 billion over the next two years for Brexit preparations and stands ready to allocate further sums if and when needed.
Personal finance
The personal allowance of annual tax-free income will rise to £11,850 and the higher rate threshold to £46,350 in April 2018, leaving the typical basic rate tax payer £1,075 a year better off compared to 2010.
Food and drink
Mr Hammond announced plans to increase duty on high-strength, low-quality alcohol from 2019, but duties on other ciders, wines, spirits and beer to be frozen.
Health
The chancellor has committed to giving England’s NHS £2.8bn of resource funds, including “£350 million immediately to allow trusts to plan for this winter”. He added that there will be a £10bn of capital investment in frontline services over the course of the current parliament.
Mr Hammond also pledged to fund pay awards negotiated for nurses, midwives and paramedics, saying: “The health secretary has already begun discussions with health unions on pay structure modernisation for Agenda for Change staff to improve recruitment and retention. He will submit evidence to the independent Pay Review Body in due course.
“But I want to assure NHS staff and patients and members of this house, that if the health secretary’s talks bear fruit, I will protect patient services by providing additional funding for such a settlement.”
Economy
The Office for Budget Responsibility (OBR) expects debt to peak this year and then gradually fall as a share of GDP. Mr Hammond said this was a “turning point in our recovery”, but added that the OBR had downgraded growth forecasts across the next five years.
Other
The chancellor announced a £500m investment in a range of technological initiatives ranging from artificial intelligence, to 5G and full fibre broadband.
Income tax will be applied from April 2019 on digital economy royalties relating to UK sales which are paid to a low-tax jurisdiction, raising about £200 million a year.
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