Well he’s no Tommy Cooper but his quiet waspish dry sense of humour was there for all to see, as Chancellor Hammond delivered his Budget statement. He derided Jeremy Corbyn at every possible opportunity, bordering on tasteless in places. Nonetheless he was a very well presented statement – very understandable even for the financially innumerate. BREXIT, in name, was never mentioned but it was clear that Hammond was holding back money in the Treasury’s coffers for a rainy day. GDP forecasts for the next few years were raised from 1.4% to 1.8% in 2018 a dip to 1.6% in 2019 and back up to 2% by 2020/21.
Fiscal discipline shows no sign of disappearing in this administration, with £1.7 trillion of borrowed money. However, borrowing this year has improved by £16.4 billion due to decent tax receipts. For education and the future of our young it was a very good budget. In the main it was quite a good budget for business, though to increase NIC for the self-employed to raise just £145 million and to cut tax exemption on dividends from £5k to £2k was thoroughly mean-spirited and will have sent out a very bad message to small business which are the backbone of our future prosperity. Greater complicated child care benefits to the tune of £6 billion will be implemented for those with small children.
£2 billion contribution to Social care over 3 years with £1 billion to be immediately available was better than nothing, but hardly a euphoric act of benevolence. No mention of housing which surprised me and also everyone expected some more meat on the bone as regards infrastructure spending.
Further tax credits will be implemented dropping the threshold for the higher rate of tax from £45k to £40k by the end of the Parliament. Also tax free income will increase from £11.5K to £12.5k. Corporation tax, will as promised drop to 19% next year at 17% in 2020 – again good for business.
As for the stock market it never arose from its slumber and ended the day down 4 points at 7335. Premier Oil sat up and took some nourishment – up 3.3% thanks to modest help offered to Scotland’s oil and the housing sector remained just above the Plimsoll line.