The Chancellor Philip Hammond has presented his second budget. Here is the summary of the key points.
The economic forecast
The Office for Budget Responsibility forecasted growth for the UK economy in 2017 is slashed to 1,5% (from 2% previously). The economy will grow at a slightly slower rate in 2018-20, before rising up to 1,6% in 2021 (previous forecast 2.1%).
Annual CPI inflation rate is expected to decline from peak of 3% to 2% target later this year.
Productivity growth has been revised down by an average of 0.7% a year up to 2023.
£3bn will be set aside in order to prepare UK for every possible outcome when UK leaves EU.
Public borrowing and finances
Actual annual government borrowing £49.9bn in 2017, which is £8.4bn lower than the forecast in March.
Borrowing forecast for 2017-22.
2018-19: £39.5bn (£40.8 previously)
2019-20: £34.7bn (£21.4bn previously)
2020-21: £32.8bn (£20.6bn previously)
2021-22: £30.1bn (£16.8bn previously)
Debt is forecast to peak at 86.6% of GDP in 2017-18, although is expected to decrease in every year thereafter, reaching 79.1% of GDP in 2022-23.
VAT threshold for small business will be kept at £85,000 for another 2 years.
Capital gains tax relief will be gradually axed for foreign businesses buying UK commercial property, with foreign pension fund being exemption.
The planned switch in indexation from Retail Price Index (RPI) to the main measure of inflation (currently CPI) for rises in business rates will start from 1 April 2018. This will provide a £2.3bn of support for companies to minimise the burden of business rates.
Research and Development will receive additional support of £2.3bn 2021-22.
Personal tax-free allowance will increase from £11,500 to £11,850 and the higher rate threshold from 45,000 to 46,350 in line with inflation from April 2018.
In April 2018, the National Living Wage will rise by 4,4% to £7.83 (currently £7.50).
Air Passenger Duty (APD) rates will be frozen for short-haul flights and long-haul economy flights while the rates of premium-class tickets will increase by £16 and for those traveling by private jets by £47.
Pensions and savings
From February 2018, the government will remove the seven-day waiting period for Universal Credit so that entitlement starts on the first day of application.
From January 2018 those who claim and are entitled to Universal Credit will get 100% advanced payments within 5 days of applying.
The government will extend the period of recovery from 6 months to 12 months, making it easier for claimants to manage their finances.
An additional £406m to be invested in maths and technical education, and in helping people develop the skills they need to succeed in the new economy.
The government will invest £84 million to upskill 8,000 computer science teachers by the end of this Parliament.
£600 reward for schools and colleges for every extra pupil who decides to make Maths or Further Maths A levels or Core Maths.
Health and social care
Extra £2.8bn to fund NHS in England over the next 3 years. £350m to immediately address issues this winter, £1,6bn for 2018-19 and £850m in 2019-20.
£10bn capital investment to fund hospitals up to 2022.
Stamp duty and housing
For first-time buyers purchasing properties worth up to £300,000 the stamp duty will be axed immediately. For those first-time buyers purchasing property in London and other expensive areas, the first £300,000 of the cost of £500,000 property will be exempt from stamp duty, with the remaining £200,000 being 5%.
£44bn will be set aside for overall government support for housing to meet the target of building 300,000 new homes a year by mid 2020’s.
Councils will be given the power to charge 100% council tax on empty properties.
Fuel, transport, and regions
Scheduled fuel duty rise for petrol and diesel cars for April 2018 will be axed.
Increase in Vehicle Excise Duty (VED) rates for cars, vans and motorcycles registered before April 2017 in line with RPI from 1 April 2018.
A £1.7 billion new transforming cities fund to improve connectivity and support jobs across England’s great city regions.