Often, the Budget – that day when the Chancellor of the Exchequer gets to show off his shiny red briefcase – has very little impact upon the lives of ordinary working folk.
Sure, there may be items in there that impact upon the everyday Joe or Joanne: it could be a tax increase here, a fuel duty rise there, but ultimately the lives of the many are rarely touched in any grand way by the Chancellor’s announcements.
In 2017, however, the Budget has delivered some very real moments that could genuinely make a difference to plenty of people around the UK.
I’ll cover those in more detail later in this article, but an increase in the National Living Wage, plus the abolishment of stamp duty for first time buyers, is a signal that the Tories have realised they have some making up to do to the electorate after a disastrous General Election campaign and lengthy Brexit negotiations.
Giveth with One Hand, Taketh with the Other
As you might expect, it wasn’t all unicorns and rainbows from Phillip Hammond, unfortunately. The growth projections suggest that the UK economy is stalling, and that this period of austerity will continue until 2022 – disastrous for public sector services that continue to have their own budgets slashed.
And there was the elephant in the room of the extra £3bn that has been pledged to cover the Brexit shortfall should a ‘no deal’ agreement be reached.
As you would expect, the Budget was met with a mixed reception. Conservative MPS have used phrases such as ‘common sense’, ‘very solid’ and ‘good proposals’, which is the sort of half-hearted praise you’d expect in a 12-year-old’s school report, rather than for the most significant set of economic announcements in quite some time.
Jeremy Corbyn, naturally, jumped on the negative aspects of the Budget, stating that “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.”
Perhaps most significantly in terms of the electorate, The Sun newspaper has appeared to withdraw their support for the Chancellor. They led with a cricket-themed piece, in honour of the Ashes, that said Hammond had ‘bowled the country over’, although Trevor Kavanagh, their chief political writer, claimed that ‘this was a timid Budget from a weak Government unready to face the future.’
So that’s what all the political types think, but what does the 2017 Budget actually mean for you? Here are the key takeaway points:
Stamp Duty Abolished
This was the main golden carrot to the general public, with stamp duty abolished for first time buyers on properties valued up to £300,000 – saving many young couples in excess of £1,000.
The move also caters to houses priced up to £500,000, with stamp duty removed on the first £300,000 of the property’s value.
National Living Wage
While it was expected to increase by more, the National Living Wage has risen by some 4.4% to £7.83 per hour, up from £7.50.
Calculated on a 40 hour working week, that will hand employees an extra £13.20 per week, roughly £52.80 a month and £633.50 a year.
Incidentally, the personal allowance on income tax has also risen to £11,850, meaning tax is paid on earnings above this threshold only.
Cigarettes & Alcohol
The cost of a packet of cigarettes will continue to rise at 2% higher than the rate of inflation, meaning an additional charge of around 28p for a deck of 20.
The price of beers, wines and spirits has been frozen, and while traditional ciders will also see no price hike it is the super-strength variations – White Lightning and the like – that will see hefty price inflation from 2019 onwards, when new legislation is introduced.
Petrol & Diesel
There has been a planned hike in fuel duty for all cars, although that has since been scrapped by Hammond.
Instead, all brand new diesel cars that fail to meet emissions standards will be subject to an increase in tax, ranging from £20 for a Ford Fiesta to up to £500 for a Porsche.
The good news is that vans, purchased both for commercial purposes and the self-employed, will be exempt from the new regulation.
The Tories have also scrapped a planned reshuffle of the VAT threshold, and this will remain at £85,000 for small businesses.
And business rates will now rise according to the Consumer Price Index (CPI), rather than the Retail Price Index (RPI). This will ensure lower rates are paid by the UK’s small businesses, in line with inflation.
The government has also pledged more than £900 million on a variety of weird and wonderful innovations, including artificial intelligence, 5G technology, UK-wide fibre broadband and electric cars.
So what does the Budget mean to Phillip Hammond? Well, according to the bookmakers, his odds of being the next Conservative leader have lengthened to 25/1 – surprising given his lofty position as Chancellor, and he is actually in to 12/1 to be the next Tory cabinet minister to leave their position.
Overall, it wasn’t a great day for the beleaguered Chancellor.