What issues did the Chancellor try to tackle in the 2017 Autumn Budget and what does it mean for your wallet? We look at what the government has announced and how it’ll affect people’s pockets.
The Chancellor of the Exchequer, Phillip Hammond, gave the UK what he called a “balanced Autumn Budget” mixing deficit reduction, infrastructure investment and help to “households under pressure.”
The main issues were; Brexit funding; the government deficit; productivity; investment in future technologies and housing.
As was widely anticipated, there were some polices aimed at helping the young. These came in the form a new railcard, stamp duty reforms and a pledge to build more homes.
This Budget came against the background of households facing spiralling essential bills, but did it offer anything for you?
Stamp duty abolished for first time buyers
Effective as of today, stamp duty up to £300,000 is abolished first time buyers who buy a home under £500,000 in value.
It is only the first £300,000 that is exempt, any value above this will be liable for stamp duty at the normal rate.
So, for example, on a £500,000 home, a first time buyer would still need to pay stamp duty of 5% on the remaining £200,000.
The government believes 80% of people buying their first home will pay no stamp duty, and 95% of first-time buyers who pay stamp duty will benefit.
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Housing: making “the dream of ownership a reality”
This budget’s big finale was all about housing, as Hammond stated successive governments failed to build enough homes. He promised to make “the dream of home ownership a reality for all.”
He pledged to build 300,000 new homes a year until the mid 2020s, committing £15.3 billion of additional funding in this budget, taking the total investment in housing to around £44 billion.
The government will also create five new garden towns, targeting areas as part of a holistic growth plan, in particular the ‘Oxford-Milton Keynes-Cambridge growth corridor’.
An enquiry into planning permissions and housing will start today, aiming to deliver a report on housing, land access and planning permission before the Spring Statement in 2018.
It will investigate if development companies are speculatively not building on land for commercial reasons, and if this is the case the Chancellor has resolved to create incentives to encourage construction to begin, and raised the possibility of forced government purchase if land is being withheld.
Chancellor Hammond was keen to emphasise that housing development will focus on urban areas “where people want to live and where the jobs are”, making best use of urban land whilst protecting green belts, to build “high-quality, high-density homes, in city centres and near transport hubs.”
And finally, in an attempt to tackle empty properties in high demand areas, he announced plans to give councils the power to charge a 100% council tax top-up on homes left empty.
A new railcard for 25-30 year olds
Chancellor Hammond announced there would be new railcard offering discounts to under 30s.
The railcard will be available from spring 2018, but it was not explained whether this would be an extension of the third-off discount, holders of the 16-25 railcard enjoy on off-peak travel, or something else.
Tax and pay
There wasn’t much of a focus on income tax and pay rates, but the Chancellor did confirm that come April 2018 there will be the following changes:
- An increase in minimum wage to £7.83 per hour
- The tax-free personal allowance will go up to £11,850
- The 40% tax threshold will increase to £46,350
Investing in broadband and mobile infrastructure
The government allotted £500 million to invest in “a range of initiatives”, including full-fibre broadband, 5G mobile networks and artificial intelligence. The government will also launch a new £190 million Challenge Fund that local areas can bid for to speed up the rollout of full-fibre networks.
Additionally, as part of their £1.7 billion ‘Transforming Cities’ initiative, £385 million will be committed to projects to develop 5G and full-fibre broadband. Furthermore, £30 million will go toward improving digital connectivity on Trans-Pennine rail in North England.
- Is your broadband up to scratch? Check your broadband speed
- Read more – What is 5G and when will it launch in the UK?
Investment in electric car network
The government will commit £400 million to creating a “charging infrastructure fund” for electric cars, as well as an extra £100 million put towards helping people buy electric cars.
There will also be plans to ensure all new homes are built with the right cables for electric car charge points.
In addition, the government will set out rules so that self-driving cars can be tested without a safety operator.
Fuel duty frozen but excise duty on diesel cars goes up
Fuel duty will remain frozen for the eighth year in a row, but there will be a temporary rise from April 2018 on Company Car Tax and Vehicle Excise Duty on new diesel cars.
Chancellor Hammond wanted to assure the tabloid press that the excise duty would “only apply to cars and not vans” so he couldn’t be accused of taxing tradesmen and “white van men and women”.
Have your say
- What the 2017 spring budget means for your finances – While this statement was focused on wider plans to shore up Britain’s “economic resilience” and improving productivity, there were a few things that will directly affect peoples’ pockets.
- What does the base rate rise mean for your finances? The Bank of England raised the base rate of interest to 0.5% in Novmeber 2017
- Cost of running a household rises to almost £17,000 a year – Our research has revealed the cost of essential bills is up by £468 since 2016