Hammond: End of austerity on way
PHILIP Hammond used his Budget to offer early tax cuts for millions of workers and extra cash for Whitehall departments, as he began the process of easing austerity.
Boosted by improved public finance forecasts, the Chancellor promised a “brighter future” after years of constraint imposed following the financial crash.
Measures announced in Mr Hammond’s third Budget yesterday amounted to a total £100 billion loosening of the purse-strings over a six-year period.
But the spectre of a no-deal Brexit hung over the 72-minute statement, with the Office for Budget Responsibility warning that failure to reach agreement with Brussels would hit the economy hard.
Downing Street insisted that the spending pledges were fully funded, irrespective of the outcome of Brexit talks.
In a move designed to put the UK at the forefront of international action to adapt tax systems to the digital age, the Chancellor announced a new £400 million levy aimed at internet giants such as Google and Facebook.
But while global tech firms will face a new tax, Mr Hammond promised a package of help for the nation’s high streets which have suffered as shoppers have moved online.
Around 32 million Britons will be given an income tax cut as Mr Hammond brought promised increases in the tax-free personal allowance forward by a year from 2020 to 2019.
Mr Hammond said his Budget was aimed at helping “the strivers, the grafters and the carers” and would pave the way for a “brighter future”.
But Labour leader Jeremy Corbyn labelled it as a “broken promise Budget”. He told MPs: “Whatever the Chancellor claims today, austerity is not over.”
The Chancellor set out a five-year plan for departmental spending which will see Whitehall budgets rise by an average of 1.2% a year.
Detailed figures made clear that the lion’s share of this extra funding will go to the Department of Health to pay for a £20.5 billion boost to NHS spending.
Setting out his income tax cuts, Mr Hammond said the personal allowance will rise to £12,500 from April 2019 and the higher rate threshold will rise to £50,000.
Mr Hammond said it would put “£130 in the pocket of a typical basic rate taxpayer”.
With an eye on Brexit negotiations, Mr Hammond announced an extra £500 million for preparations for the UK’s departure from the EU in March 2019.
As well as those measures, the Chancellor set out one-off bonuses of £1 billion for defence, £400 million for schools and £420 million for local highway authorities to repair potholes and carry out other maintenance.
In a major shift, the Chancellor also promised to abolish the use of the private finance initiative funding.
Mr Corbyn added: “What we’ve heard today are half measures and quick fixes.”