Fans of the Chancellor’s red box photocall outside 11 Downing Street are in for a treat this year – the abolition of the Autumn Statement means Philip Hammond will present not one but two Budgets to the Commons.
The first – the last ever Spring budget – will be published on Wednesday 8 March 2017. Philip Hammond will deliver his statement to the commons after Prime Minister’s Questions, at around 12:30pm. A second – the first Autumn Budget – will come later in the year, followed by a new Spring Statement, which will respond to forecasts from the Office for Budget Responsibility but will no longer introduce new fiscal changes.
But what is likely to happen this time around? The Institute for Fiscal Studies set out a grim outlook for the chancellor in its “Green Budget” earlier this month. This year’s deficit will be higher than in 47 of the 60 years before the crash of 2008, the national debt is at its highest level since 1966, and the chancellor is still committed to the diet of austerity prescribed by his predecessor, George Osborne. With day-to-day spending on public services set for a real-term fall of 4 per cent between now and 2020 and those same public services already in a parlous state, Hammond has a difficult hand to play.
Here’s what to look out for:
Changes to business rates
MPs of all stripes have been pressuring the government to rethink its plans on business rates, which will see new rates based on updated property valuations introduced for the new financial year.
Initially, the government maintained that three-quarters of businesses won’t see any changes to their rates at all. But the fact that rates for pubs, shops, GP surgeries hospitals could be set for increases as high as 400 per cent riled Tory backbenchers, several ministers, the CBI and right-wing papers including the Sun and Daily Mail.
However, Theresa May’s government has proved adept at U-turning when it needs to – think the Brexit White Paper and Amber Rudd’s lists of foreign workers. So we will likely see a concession from the Treasury on controversial changes, which were slated to kick in from April. Communities and Local Government secretary Sajid Javid told the Commons that a solution would be in place by Budget Day.
Reassurances for social care
Britain’s crisis-stricken social care system – and the vexed question of how we’re going to pay for our ageing population – also looms large. In the aftermath of the controversy around the government’s supposed “sweetheart deal” with Surrey County Council, local authorities and charities have been lobbying Number 10 for a new settlement – or at least some extra cash to ease the pain.
Indeed, the Health Service Journal has revealed the Care Quality Commission is to be handed regulatory oversight for how councils manage their social care services, and a number MPs are increasingly convinced that the government could be set to unveil a modest increase in funding. Any such package would only be a sticking plaster.