Budget 2017: What it means for you
What the 2017 Budget Means For You
Chancellor Philip Hammond has announced his plans for Britain’s budget, we look at what the facts and figures really mean
- Stamp duty SCRAPPED for first-time buyers
- 300,000 more homes built every year
- More money for nurses and NHS (but not other public sector workers)
- Universal credit roll out to be continued
- More money to help homeless - but is it enough?
The Budget, which sets out the government’s spending plans for the financial year, was announced yesterday.
This year, Hammond has pledged to make Britain ‘fit for the future’, but has been criticised as being part of a government no longer fit for office.
The main focus points of the budget were:
- Young People
- Universal Credit
What Hammond did not talk about:
- Social Care
Latest Deals looks at the key promises from the budget to see how they will affect you.
26-30 “Millennial” Railcard
The Millennial Railcard was announced on Monday, and has now been confirmed in Hammond’s budget speech.
This will benefit up to 4.5 million young people, by giving them a third off rail fares.
This does not, however, include a third off on season tickets or on certain peak time services.
The pledge is one measure used to try and win support from young voters, the majority of which voted for Labour in May’s election.
Stamp Duty Scrapped
Another promise that is aimed at attracting the younger vote is the scrapping of Stamp Duty immediately for first time buyers, which is being cited as a ‘rabbit out of the hat’ moment.
This policy was originally mentioned in the Labour Party manifesto in June.
Stamp Duty will be abolished for first time buyers on all properties worth up to £300,000, which will effectively knock £5,000 off of house prices.
Buyers will also pay less on purchases between £300,000 and £500,000.
The Government said it was announcing this plan to help first time buyers to get onto the housing ladder.
Stamp Duty has been blamed for the sluggishness of the housing market for both older and younger generations, as high tax bills put people off buying or downsizing their homes.
There are limits on this however.
If you are a first time buyer, jointly buying with someone who is not, then this will not apply to you.
The definition of a first time buyer for this scheme is important.
For the duty to be scrapped on your purchase, you can never have owned or part owned a property before.
The plan has since been criticised, as it will not necessarily be buyers that will benefit from it.
The Office for Budget Responsibility, OBR, said the main beneficiaries will in fact be those who already own property, rather than first time buyers, as they will be able to sell their homes for more.
The OBR has predicted that because of this change, house prices will rise by 0.3% in 2018, and that real term prices for first time buyers will be higher after the relief, than before it.
Jon Ostler, the UK CEO of personal finance site Finder, said, “In order to truly help first time buyers, the government would need to offer a far greater incentive.
“As it stands, first-time buyers in the UK are going to have to rely on the delivery of the Government’s house building investment and initiatives to deliver affordable housing, but this could take some time.”
300,000 More Homes Built Every Year
Another plan that is based around housing is a £44 BILLION plan to build 300,000 new homes each year.
Hammond said that fixing the housing market is a crucial part of ensuring that Millennials aren’t the first generation since the Black Death to be worse off than their parents.
The plan will aim to increase the construction of new homes to an average of 300,000 a year, by the mid-2020s, a rise from just 217,000 last year.
In order to carry out this plan, which would be the biggest annual increase in housing supply since the 1970s, the government will provide at least £44 billion of funding.
Hammond also issued a threat to developers that their ‘land-banking’ days are over, as he hit out at those who do not build on plots once they have been given planning permission.
This idea was first put forward by Ed Miliband in 2015, and was criticised by Conservatives at the time, including Boris Johnson, who compared it to “Mugabe-esque land grabbing”.
Crucially, Hammond did not say how many of the homes will be affordable or social housing, but they will mainly be built in urban areas.
Jeremy Corbyn criticised the Conservatives’ previous housing policy in relation to this, saying, “With this government delivering the worst rate of house building since the 1920s, and 250,000 fewer council homes, any commitment would be welcome.
But we’ve been here before. The government promised 200,000 starter homes three years ago. Not a single one has been built in those three years.”
More Money for Nurses and NHS
NHS nurses may get a pay rise.
Mr Hammond said the nurses, “deserve our deepest gratitude” for the work that they do, yet will only commit to a pay rise if it is recommended by an independent panel, and no money has been included in the Budget for this pay rise.
There was no mention in the Budget of pay rises to other public sector workers, or even of funding to other public sectors.
Hammond announced £2.8 billion more will be spent on the NHS, however this will just be a one off payment so the service can cope with immediate pressures.
Total spending on the NHS will still increase, but by £1.6 billion, less than half of the £4 billion demanded by NHS England chief executive Simon Stevens, which he said was currently well short of what is needed.
NHS groups said the limited funding meant there would be tough choices on how it will be spent.
Bruce Keogh, the NHS’s medical director, said, “The Budget plugs some, but not all, of the NHS funding gap. Longer hospital waits will be unavoidable.”
Corbyn criticised this, saying, “The Chancellor has not been clear today- not for NHS workers, our police, firefighters, teachers, teaching assistants, bin collectors, tax collectors, or armed forces personnel.
“Why does the government think it’s ok to under pay, over stress, and under appreciate all those that work within our NHS?”
Under new plans in the Budget, those claiming Universal Credit will have to wait five weeks, instead of six, to receive their first payment from February 2018.
The government has faced pressure over the scheme after reports of people getting into rent arrears or having to use food banks while waiting for the benefit.
Continuing on the theme of housing reform, the chancellor also announced that housing benefit claimants could receive it for an extra two weeks while waiting for universal credit payments to come through.
Corbyn’s criticisms of Universal Credit, and the lack of changes made to it, were a main focus point of his response to the Budget. He said, “The Chancellor’s solution to a failing system, which is causing more debt, is to offer a loan. The six week wait, with many waiting even longer, simply becomes a five week wait.
“This system has been run down by £3 billion of cuts to work allowances, and caused evictions because housing benefit isn’t paid directly to the landlord.
“So I say to the Chancellor again, put this system on hold until it is fixed.”
Missing from the Budget speech, but included in the red book, which is what will be put forward to Parliament, was the change to a gradual roll out of Universal Credit.
Living Wage Increase
Another point of the Budget that will be popular is the increase in the living wage for over-25s.
Hammond announced that it will increase from £7.50, to £7.83 an hour, and will be introduced in April.
This will be a total rise of £600 a year for those who work a 38 hour week.
The increase follows a rise from £7.20 in Hammond’s Spring Budget, and is part of a plan to raise the Living Wage to £9 an hour by 2020.
Corbyn, however, was critical of this move for not going far enough. He said, “If he wants to get people out of debt, he should back Labour’s policy for a real living wage of £10 a hour.”
More Money for Brexit
At the start of his Budget speech, Hammond announced a further £3 billion would be spent on “Brexit preparations”, on top of the £700 million that has already been spent on them.
This means that the extra spending in the Budget is higher for Brexit than for the NHS.
Helping the Homeless
Another housing focused policy was a scheme to begin to eradicate homelessness in the UK.
£28 million will be invested by the government in three new housing pilot schemes in the West Midlands, Manchester, and Liverpool, which aim to halve rough sleeping by 2022, and eliminate it by 2027, for these areas.
The scheme was heaving criticised by Corbyn in his speech responding to the Budget, by saying, “Three new pilot schemes for rough sleepers simply doesn’t cut it.
“It is a disaster for those people sleeping on our streets, forced to beg for the money for a night shelter.”
What do you think? Share your thoughts in the comments below.