by Leon Duveen on 9 March, 2017
The headline change was the Manifesto-breaking increase in National Insurance contributions for the self-employed will only raise £600 million but be a big disincentive for people to take the leap from a safe job to start up their own business. This, along with the massive reductions in tax-free allowances for dividends (the way many self-employed people pay themselves through their company) will mean fewer new start-up companies, a sector which help bring jobs to many others as well.
The elephant in the room is definitely Brexit and the effect it will have on the UK economy in the next few years. The report yesterday from the OBR suggest that there will be little or no growth in our economy in the coming years, “Thanks largely to a weaker outlook for whole economy inflation, we expect weaker cumulative growth in nominal GDP over the forecast than in November,..”. Hammond seems to be concentrating on building a large war chest to deal with the cost of Brexit at the expense of helping boost our economy now.
The biggest announcement in the Budget was the introduction of a new vocational qualification, although one does wonder why this was not introduced by the Education Secretary. Perhaps Hammond had so little to say he had to resort to stealing initiatives from other Cabinet members to announce?
What was missing from the Budget was extra help for the NHS & Social Care to deal with the crisis in both, extra cash for schools facing real cuts under the National Funding Formula being imposed by this government, real help for businesses facing hikes in Business Rates and help Local Councils (except for Surrey County Council) struggling to cope with ever increasing demands with shrinking budgets.
All in all, the only memorable part of the budget was Hammond’s self-deprecating jokes. It was a budget that didn’t help ordinary people, it was a budget, that attacked the self-employed, it was a budget that failed to tackle the real crises facing the UK today. It is no wonder that Hammond has decided to move to Autumn budgets as he will need to make wide ranging changes to repair the damage done yesterdayLeave a comment