Summary of Budget 2017: Key points at-a-glance

 In U.S.

Philip Hammond has delivered his second Budget as chancellor. Here are the key points of his speech.

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Stamp duty and housing

  • Stamp duty to be abolished immediately for first-time buyers purchasing properties worth up to £300,000
  • To help those in London and other expensive areas, the first £300,000 of the cost of a £500,000 purchase by all first-time buyers will be exempt from stamp duty, with the remaining £200,000 incurring 5%.
  • 95% of all first-time buyers will benefit, with 80% not paying stamp duty
  • Reduction will apply immediately in England, Wales and Northern Ireland although the Welsh government will have to decide whether to continue it when stamp duty is devolved in April 2018
  • It will not apply in Scotland unless Scottish government decides to follow suit
  • £44bn in overall government support for housing to meet target of building 300,000 new homes a year by the middle of the next decade
  • Councils given powers to charge 100% council tax premium on empty properties
  • Compulsory purchase of land banked by developers for financial reasons
  • £400m to regenerate housing estates and £1.1bn to unlock strategic sites for development
  • Review into delays in developments given planning permission being taken forward
  • £28m for Kensington and Chelsea council to provide counselling services and mental health support for victims of the Grenfell fire and for regeneration of surrounding area
  • New homelessness task force
  • Stamp duty cut for first time buyers
  • What does the stamp duty change mean?

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Alcohol, tobacco and fuel

  • Tobacco will continue to rise by 2% above Retail Price Index (RPI) inflation, equivalent to 28p on a pack of 20, while the minimum excise duty on cigarettes introduced in March will also rise
  • Duty on hand-rolling tobacco will increase by additional 1%
  • Duty on beer, wine, spirits and most ciders will be frozen, equating to 1p off a pint of beer and 6p of a typical bottle of wine
  • But duty on high-strength “white ciders” to be increased in 2019 via new legislation
  • Fuel duty rise for petrol and diesel cars scheduled for April 2018 scrapped
  • Vehicle excise duty for cars, vans and motorcycles registered before April 2017 to rise by inflation
  • Vehicle excise duty for new diesel cars not meeting latest standards to rise by one band in April 2018
  • Tax hike will not apply to van owners
  • Existing diesel supplement in company car tax to rise by 1%
  • Proceeds to fund a new £220m clean air fund for pollution hotspots in England

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Personal taxation and wages

  • Tax-free personal allowance on income tax to rise to £11,850 in line with inflation in April 2018
  • Higher-rate tax threshold to increase to £46,350
  • Short-haul air passenger duty rates and long-haul economy rates to be frozen, paid for by an increase on premium-class tickets and on private jets
  • National Living Wage to rise in April 2018 by 4.4%, from £7.50 an hour to £7.83.

The state of the economy

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  • Growth forecast for 2017 slashed from 2% to 1.5%
  • Forecasts for 2018, 2019, 2020 and 2021 revised down to 1.4%, 1.3%, 1.5% and 1.6% respectively.
  • Productivity growth revised down by an average of 0.7% a year up to 2023
  • Annual rate of CPI inflation forecast to fall from peak of 3% towards 2% target later this year
  • Another 600,000 people forecast to be in work by 2022
  • £3bn to be set aside over next two years to prepare UK for every possible outcome as UK leaves EU
  • Sharp cut to UK growth forecast

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The state of the public finances

  • Annual government borrowing £49.9bn this year, £8.4bn lower than forecast in March
  • Borrowing forecast to fall in real terms in the subsequent five years from £39.5bn in 2018-19 to £25.6bn in 2022-23.
  • But projected borrowing has been revised up for 2019-2020, 2020-2021 and 2021-22, compared to March, due to the weaker economic outlook and expected lower tax yields
  • Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.4% this year, then 1.9%, 1.6%, 1.5% and 1.3% in subsequent years, reaching 1.1% in 2022-23.
  • Debt will peak at 86.5% of GDP this year, then fall to 86.4% next year; then 86.1%, 83.1% and 79.3% in subsequent years, reaching 79.1% in 2022-23.

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Welfare and pensions

  • £1.5bn package to “address concerns” about the delivery of universal credit
  • Seven-day initial waiting period for processing of claims to be scrapped
  • Claimants to get 100% advance payments within five days of applying from January
  • Typical first payment will take five weeks rather than current six
  • Repayment period for advances to increase from six to 12 months.
  • New universal credit claimants in receipt of housing benefit to continue to receive it for two weeks
  • What do universal credit reforms mean?

Business and digital

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  • VAT threshold for small business to remain at £85,000 for two years
  • £500m support for 5G mobile networks, full fibre broadband and artificial intelligence
  • £540m to support the growth of electric cars, including more charging points
  • A further £2.3bn allocated for investment in research and development
  • Rises in business rates to be pegged to CPI measure of inflation, not higher RPI, a cut of £2.3bn
  • Digital economy royalties relating to UK sales which are paid to a low-tax jurisdiction to be subject to income tax as part of tax avoidance clampdown. Expected to raise about £200m a year
  • Capital gains tax relief for overseas buyers of UK commercial property to be phased out, with exemptions for foreign pension funds
  • Charges on single-use plastic items to be looked at
  • £30m to develop digital skills distance learning courses

Education and health (England only)

  • £40m teacher training fund for underperforming schools in England. Worth £1,000 per teacher
  • 8,000 new computer science teachers to be recruited at cost of £84m and new National Centre for Computing to be set up
  • Secondary schools and sixth-form colleges to get £600 for each additional pupil taking maths or further maths at A-level and core maths at an expected cost of £177m
  • £2.8bn in extra funding for the NHS in England
  • £350m immediately to address pressures this winter, £1.6bn for 2018-19 and the remainder in 2019-20
  • £10bn capital investment fund for hospitals up to 2022
  • No extra funding for nurses pay but a guarantee that if future pay rises are recommended by independent body, there will be new money
  • Cash for maths, no extra on school budgets
  • The NHS will get extra money – chancellor

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Nations/infrastructure/transport/regions/science

  • £320m to be invested in former Redcar steelworks site
  • Further devolution of powers to Greater Manchester
  • £1.7bn city region transport fund, to be shared between six regions with elected mayors and other areas
  • £30m to improve mobile and digital connectivity on TransPennine rail route.
  • £2bn for Scottish government, £1.2bn for Welsh government and £650m for Northern Ireland executive
  • Scottish police and fire services to get refunds on VAT from April 2018
  • Young person’s railcard extended to 26-30-year-olds, giving a third off rail fares


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