Budget 2018: ‘Fiscal Phil’s’ big giveaway budget as he declares ‘austerity is coming to an end

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Bangla sanglap desk: Philip Hammond turned on the spending taps with a £100 billion splurge over five years.

The Chancellor poured billions into a bailout for Universal Credit and tax cuts from April worth £130 a year to millions.

Overall he will dish out £15 billion more than previously planned next year, rising each year until it hits £30.5 billion more spending in 2023.

Most of the extra money – around eight-tenths – will go on the NHS. But smaller portions will be showered on popular causes from fixing roads to freezing beer duty.It was the strongests signal yet from the Chancellor that austerity is “coming to an end”. Philip Hammond gave a surprise £130 tax cut to millions of people in a Budget designed to show austerity is ending.

The Chancellor rushed forward by 12 months to next year a boost to the personal allowance that takes 1.7 million people out of tax altogether and saves the rest more than £10 a month.

At a cost of £9 billion to the exchequer over five years, he will raise the tax-free personal allowance from £11,850 to £12,500 in April. He also will lift the higher rate tax threshold from £46,350 to £50,000, helping a million people on middle to higher earnings to escape the higher rate of income tax.

Mr Hammond told the Commons that a single parent working 25 hours a week on the National Living Wage could benefit by £890 next year, after benefits are taken into account.

Boasting that the country was turning the corner from austerity to prosperity, he hailed the move as “the hard work of the British people paying off — in hard cash in their pockets”.

It was the most eye-catching giveaway in a Budget that was peppered with spending designed to make Britons feel better off.

But there was also a string of tax rises, the biggest targeting people who use companies to cut their tax bills as if they were self-employed. The sting will claw in £1.1 billion in 2020.

There is also the long-awaited tax on digital firms, which will start by taking £400 million from the likes of Google and Facebook. “It’s clearly not sustainable, or fair, that digital platform businesses can generate substantial value in the UK without paying tax here in respect of that business,” Mr Hammond said.

Internet firms were a “stand-out example” of where the tax rules were failing to keep pace with new kinds of business, he said. Accusing the industry of painfully slow progress, he told MPs: “We cannot simply talk forever”.

In a packed Commons chamber, the Chancellor unveiled better-than-expected forecasts that showed pay is set to exceed inflation in each of the next five years.

He lopped £44 billion off borrowing over the next five years, down from £192 billion to £148 billion.

Spendning announcements ranged from £450 million to fix potholes and other road repairs to £2 billion for new NHS mental health services.

He promised £650 million extra for town halls, plus more for services for disabled people and children.

He fired off £1 billion for defence to fill in a funding gap, stating its importance in the face of Russian military aggression. Ministry of Defence sources claimed a “significant victory” for Defence Secretary Gavin Williamson who fought hard to protect the nation’s military might.

The cash will be used to boost Britain’s cyber capabilities, its anti-submarine warfare capacity and to maintain the pace of the Dreadnought programme to ensure Continuous At Sea Deterrence.

After head teachers marched on Westminster earlier this autumn to protest at school funding, Mr Hammond announced a £400 million “in-year bonus” of capital payments directly to schools averaging £10,000 per primary school and £50,000 per secondary school.

Mr Hammond claimed: “I can report to the British people … that their hard work is paying off and the era of austerity finally coming to an end.”

Labour howled in derision because his words fell short of Theresa May’s conference speech which pledged austerity “is over”.

Labour leader Jeremy Corbyn said: “The reality is that austerity is far from over and nothing being said today changes that.”

He demanded: “What’s needed is a real break with austerity not half measures and quick fixes.”

For Brexit Britain, the Chancellor announced an extra £500 million for preparations by Government departments, to a total of £4.2 billion.

As well as increased allowances to attract overseas investment in post-Brexit Britain, he also promised e-passport gates at Heathrow would be opened up to some non-EU citizens, including visitors from the US, Canada, New Zealand, Australia and Japan.

The Chancellor had cheer for drinkers, with duties frozen on beer plus whisky and other spirits. It saves 2p on a pint of ale and 30p on scotch – but wine goes up in line with prices and there are inflation-busting rises for smokers. He confirmed fuel duty is pegged for the ninth year.

Mr Hammond tried to shake off his “Eyeore” image with an optimistic boast that Britain was “opening a new chapter in our country’s economic history”.

His speech was peppered with jokes of largely dismal quality – including an extended series of puns on the subject of going to the loo.

Announcing rates relief for public toilets, the Chancellor squeezed out the words “relieve themselves”, “convenience of the House”, “bogged down”, “relief” and gleefully boasted the announcement “hasn’t leaked”. The Prime Minister looked expressionless, apparently less delighted with the puns than her Chancellor.

Eye-catching giveaways today include £160 million for police officers who identify and tackle terror threats, money which will be welcomed by Scotland Yard which recently said it was carrying out 500 terror investigations.

Earlier Mr Hammond was all smiles as he staged the traditional pre-Budget photo call with his Red Box of secrets.

Treasury Chief Secretary Liz Truss was in feisty mood, sitting on Sajid Javid’s lap in the squash for front bench seats. Earlier she tweeted a picture of her ministerial folder next to a coffee cup, saying: “It’s a double espresso kind of morning.”

A number of today’s Budget announcements were trailed, including a 50p piece to commemorate Brexit. It will carry a motto, still being drafted, emphasising friendship with all nations.

However, the EU said there were no plans to mint a special euro coin to mark Britain’s departure. A Commission spokeswoman said coolly: “We have no current plans to do anything of the sort.”

Other decisions include:

* £60 million to plant more trees, including £10 million in streets and urban areas.

* A study into a new “Great Thames Park” for the Thames Estuary with new paths and cycleways along the Thames.

* Some £2 billion for mental health services, as part of a £20 billion NHS boost announced in July.

* Weddings to be allowed in more restaurants and pubs in a boost to the hospitality sector. It may cut the average £4,500 spent by couples on venue hire.

* Some £1.7 million to educate more students on the Holocaust ahead of the 75th anniversary of Bergen Belsen’s liberation by the British Army in 2020.

* Help for the High Streets with a cut in business rates for small retailers and cash to improve town centres.

* Some £30 billion for road improvements and potholes.

With Brexit talks on a knife-edge in Brussels, Mr Hammond was holding around £15 billion back as a “buffer” in case talks go wrong and derail the economy. As revealed by the Standard earlier this month, he will confirm that he will hold an emergency Spring Budget to pump up the economy.

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