In one speech, on one day, the government will announce plans to make you richer or poorer, better or worse. Welcome to the Autumn Budget 2017, which takes place on Wednesday 22 November 2017, with the Chancellor Philip Hammond giving his speech at approximately 12.30pm.
Unusually, this is the second Budget this year, and the first to take place in November since 1996. This is because Hammond decided to swap round the dates, so from now on there is an Autumn Budget and a Spring Statement (rather than the Autumn Statement that used to take place at this time of year).
Here’s what you need to know about it:
300,000 new homes a year
Philip Hammond – under pressure from Communities Secretary Sajid Javid, pretty much all young voters and their parents, and many in his party who feel it isn’t doing enough for younger people – has announced that 300,000 new homes will be built a year. But he hasn’t said how many will constitute social housing, “affordable” housing, or where they will be built (he’s vowed to protect the greenbelt), so the Budget should contain more details. Javid has demanded £50bn worth of spending on a housing scheme.
The economic forecast is stormy
Here are some of the facts that are likely to have crossed the Chancellor’s desk. The UK is no longer the fastest-growing G7 economy but the slowest. Britain has endured the lowest growth and the highest inflation of the ten major EU economies. (You can read more gloomy statistics in George Eaton’s long read on the British economy, here).
Then there’s the deficit. Hammond will announce the latest forecast from the Office for Budget Responsibility on 22 November, but in the meantime we have a prediction from the respected economic think-tank the Institute for Fiscal Studies. According to the IFS, due to the weak performance of the economy, the deficit in 2021-22 could be £36bn – £20bn higher than the £17bn forecast by the OBR back in March. Perhaps the most depressing fact hidden in the analysis is that the government’s deficit reduction plans (such as they survive) rely on cuts, rather than economic growth.
We should expect driverless cars on our roads by 2021, according to the Chancellor, with the Treasury also preparing to spend £400m on electric car charge points, £75m on artificial intelligence, and £100m to boost purchases of clean fuel cars.
But less for drivers
The Petrol Retailers Association claims it has been told that fuel duty on diesel will rise by 1p a litre. It comes as part of a widespread push to stop people buying diesel cars, because of the toxic emissions they pump out.
More for the younger generation
Leaked plans circulating about the extension of the 16-25 young person’s railcard to under-30s, now confirmed. And there are rumours Hammond will scrap stamp duty for first-time buyers.
Although Hammond riled Brexiteers by saying he did not want to spend money on the prospect of no Brexit deal until the last minute, he will probably have to put some aside in this Budget for the big breakup. Government departments and agencies like HMRC and the Border Force need to recruit extra staff in the case of no deal, and £250m has already been allocated for departments to prepare for that scenario.
Cheeky tax rise?
Hammond may also try to sneak in a tax rise by freezing income tax thresholds, rather than letting them rise with inflation. But the the tax-free personal allowance needs to go up to £12,500 by 2020, going by the Tories’ pledge, so this will have to happen at some point (it’s currently on £11,500).
The Chancellor is expected to pave the way for single-use polystyrene kebab trays, coffee cups and packaging to be taxed, in a bid to prevent pollution.
Universal Credit backtrack
We know that the government plans to cut the payment delay of the new benefits system from six to four weeks, so it could be announced in this Budget.
Public sector pay rise
The government has already lifted the 1 per cent cap on public sector pay rises for police and prison officers, and it’s expected NHS staff might follow. Health secretary Jeremy Hunt said as much in October, although he was vague on the finances.
No VAT for Scotland’s police
Hammond is expected to announce that Scotland’s emergency services will no longer be liable for VAT, bringing them in line with the rest of the UK. The Scottish National Party have been demanding this for months, but Hammond is likely to give credit to the newly-elected Scottish Tory MPs.