A rundown on the 2017 Spring budget


Delivering his first budget as chancellor, Phillip Hammond pulled few surprise moves. As expected the NHS, small business tax rates, and schools, were are the heart of a budget that showed where the governments priorities lie for the year ahead.

Schools and Education

  • Creation of T-Levels for technically based qualifications. A £500m annual investment in this further education scheme to increase the number of hours training for 16-19 year olds by 50%.
  • 110 new free schools get funding, building on the current commitment of 500.

General Taxation

  • Class 4 NI contributions to increase by 1%, to 10%, in April 2018; then 11% in April 2019.
  • A reduction from £5,000 to £2,000 in the tax-free dividend allowance.
  • By stopping businesses converting capital losses into trading losses, reducing the abuse of foreign pension schemes and introduction of VAT on roaming telecoms, the Government hope to see £820m in return.
  • The threshold for income tax changes to £12,500 for basic rate and £50,000 for higher rate at the end of the current Parliament.

Business Rates

  • The Government recognises the changes that the digital age brings with it.
  • Businesses coming out of the Small Business Rate Relief will get an additional cap.
  • Pubs with a rateable value of under £100,000 will see a £1,000 discount on their business rates.
  • A discretionary fund of £300m to deliver relief to hard cases will be made available to local authorities.

UK and Regions

  • Scotland will see £350m, Wales £200m and Northern Ireland almost £120m.
  • The North will receive £90m for transport, while the Midlands will be granted £23m.

Health and Social care

  • Changes to the way Personal injury compensation claims are handled are due to have a heavy impact on the NHS budget. To cover this the Government have set aside £1.2bn.
  • In an attempt to relieve waiting times in A&E £100m will be made available immediately for on-site GP triage.
  • £2bn in grant funding for social care in England in the next 3 years with £1bn of that in 2017/18.

Families

  • Protecting consumers from unfair contracts in T&Cs and giving consumer bodies greater powers of enforcement.
  • With the aim of encouraging ‘returnships’ the Government commits £5m to the public and private sector. They hope this will help people getting back into work after a career break.

Economic forecast

  • Government borrowing is expected to be around £24bn lower than previously predicted. The Office for Budget Responsibility (OBR) says public sector net borrowing for 2016/17 will be £16.4bn lower than forecast.
  • While a year-on-year rise in borrowing has be pencilled in by the OBR for 2017/18 it is the first since 2012/13.
  • OBR predicts growth in 2017 at 1.4% to 2%. Over the period to 2022, cumulative growth is forecast to be weaker than expected.