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SUMMARY OF BUDGET NOV, 2017
BOB 2
Posted: 22 November 2017 18:31:34(UTC)
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Summary of Budget 2017: Key points at-a-glance
4 hours ago
From the section UK Politics Share this with Facebook Share this with Twitter Share this with Messenger Share this with Email Share
Related TopicsBudget 2017
Philip Hammond has delivered his second Budget as chancellor. Here are the key points of his speech.

Stamp duty and housing
Stamp duty to be abolished immediately for first-time buyers purchasing properties worth up to £300,000
To help those in London and other expensive areas, the first £300,000 of the cost of a £500,000 purchase by all first-time buyers will be exempt from stamp duty, with the remaining £200,000 incurring 5%.
95% of all first-time buyers will benefit, with 80% not paying stamp duty
Reduction will apply immediately in England, Wales and Northern Ireland although the Welsh government will have to decide whether to continue it when stamp duty is devolved in April 2018
It will not apply in Scotland unless Scottish government decides to follow suit
£44bn in overall government support for housing to meet target of building 300,000 new homes a year by the middle of the next decade
Councils given powers to charge 100% council tax premium on empty properties
Compulsory purchase of land banked by developers for financial reasons
£400m to regenerate housing estates and £1.1bn to unlock strategic sites for development
Review into delays in developments given planning permission being taken forward
£28m for Kensington and Chelsea council to provide counselling services and mental health support for victims of the Grenfell fire and for regeneration of surrounding area
New homelessness task force
Stamp duty cut for first time buyers
What does the stamp duty change mean?

Alcohol, tobacco and fuel
Tobacco will continue to rise by 2% above Retail Price Index (RPI) inflation, equivalent to 28p on a pack of 20, while the minimum excise duty on cigarettes introduced in March will also rise
Duty on hand-rolling tobacco will increase by additional 1%
Duty on beer, wine, spirits and most ciders will be frozen, equating to 1p off a pint of beer and 6p of a typical bottle of wine
But duty on high-strength "white ciders" to be increased in 2019 via new legislation
Fuel duty rise for petrol and diesel cars scheduled for April 2018 scrapped
Vehicle excise duty for new diesel cars not meeting latest standards to rise by one band in April 2018
Tax hike will not apply to van owners
Existing diesel supplement in company car tax to rise by 1%
Proceeds to fund a new £220m clean air fund
What the Budget 2017 means for you
What does the diesel change mean fo
Personal taxation and wages
Tax-free personal allowance on income tax to rise to £11,850 in line with inflation in April 2018
Higher-rate tax threshold to increase to £46,350
Short-haul air passenger duty rates and long-haul economy rates to be frozen, paid for by an increase on premium-class tickets and on private jets
National Living Wage to rise in April 2018 by 4.4%, from £7.50 an hour to £7.83.
line break
The state of the economy
Growth forecast for 2017 downgraded from 2% to 1.5%
GDP downgraded to 1.4%, 1.3% and 1.5% in subsequent years before rising to 1.6% in 2021-22
Productivity growth and business investment also revised down
Annual rate of CPI inflation forecast to fall from peak of 3% towards 2% target later this year
Another 600,000 people forecast to be in work by 2022
£3bn to be set aside over next two years to prepare UK for every possible outcome as UK leaves EU
Sharp cut to UK growth forecast
line break

The state of the public finances
Annual borrowing £49.9bn this year, £8.4bn lower than forecast in March
Borrowing forecast to fall in every subsequent year from £39.5bn in 2018-19 to £25.6bn in 2022-23. But projected figures for next five years all higher than forecast in March
Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.4% this year, then 1.9%, 1.6%, 1.5% and 1.3% in subsequent years, reaching 1.1% in 2022-23.
Debt will peak at 86.5% of GDP this year, then fall to 86.4% next year; then 86.1%, 83.1% and 79.3% in subsequent years, reaching 79.1% in 2022-23.
line break

Welfare and pensions
£1.5bn package to "address concerns" about the delivery of universal credit
Seven-day initial waiting period for processing of claims to be scrapped
Claimants to get 100% advance payments within five days of applying from January
Typical first payment will take five weeks rather than current six
Repayment period for advances to increase from six to 12 months.
New universal credit claimants in receipt of housing benefit to continue to receive it for two weeks

Business and digital
CarsImage copyrightPA
VAT threshold for small business to remain at £85,000 for two years
£500m support for 5G mobile networks, full fibre broadband and artificial intelligence
£540m to support the growth of electric cars, including more charging points
A further £2.3bn allocated for investment in research and development
Rises in business rates to be pegged to CPI measure of inflation, not higher RPI, a cut of £2.3bn
Digital economy royalties relating to UK sales which are paid to a low-tax jurisdiction to be subject to income tax as part of tax avoidance clampdown. Expected to raise about £200m a year
Charges on single-use plastic items to be looked at
£30m to develop digital skills distance learning courses
£40m teacher training fund for underperforming schools in England. Worth £1,000 per teacher
8,000 new computer science teachers to be recruited at cost of £84m and new National Centre for Computing to be set up
Secondary schools and sixth-form colleges to get £600 for each new pupil taking maths or further maths at A-level and core maths at an expected cost of £177m
£2.8bn in extra funding for the NHS in England
£350m immediately to address pressures this winter, £1.6bn for 2018-19 and the remainder in 2019-20
£10bn capital investment fund for hospitals up to 2022
No extra funding for nurses pay but a guarantee that if future pay rises are recommended by independent body, there will be new money
Cash for maths, no extra on school budgets
The NHS will get extra money - chancellor

Nations/infrastructure/transport/regions/science
£320m to be invested in former Redcar steelworks site
Further devolution of powers to Greater Manchester
£1.7bn city region transport fund, to be shared between six regions with elected mayors and other areas
£30m to improve mobile and digital connectivity on TransPennine rail route.
£2bn for Scottish government, £1.2bn for Welsh government and £650m for Northern Ireland executive
Scottish police and fire services to get refunds on VAT from April 2018
Young person's railcard extended to 26-30-year-olds, giving a third off rail fares
Hammond scraps police and fire VAT bills
Budget gives extra £1.2bn to Wales
Extra £650m for Northern Ireland in Budget


ADD ON RE TAX ON DIVIDEND'S http://www.thisismoney.c...d-5k-2k-Budget-2017.html
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Richard T
Posted: 22 November 2017 19:17:28(UTC)
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On the Stamp Duty cut, the OBR respond by saying it will just push up prices, so only current owners will benefit, as per HMRC research after the last time it was tried. But what do experts know, even when they're your own! Facts never got in the way of a Tory policy...

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Tim D
Posted: 22 November 2017 20:33:38(UTC)
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Listened to this one live (something I don't normally get to do). Very dull! On the bright side: no messing with pension/ISA/divi limits and thresholds this time. I welcome the investment in maths and computing teaching... but too little and too late? Assuming the "develop digital skills distance learning courses" will be another IT omnishambles until proven otherwise (if it ever gets beyond a quango stuffed with digital luvvies breathlessly gushing soundbites).
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Micawber
Posted: 22 November 2017 22:19:22(UTC)
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Full of waffly rhetoric, heavy-handed attempts at jokes and delivered amidst the cries of the rabble that frequents that risible Old Boys' Club on the banks of the Thames. It was indeed the most boring budget I've heard in years, but maybe that's just as well.
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Rishan
Posted: 22 November 2017 22:36:15(UTC)
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Can anyone confirm the tax-free dividend allowance next year, £5000 or £2000? I haven't heard it mentioned since the reduction to 2k was scrapped due to the general election.
geoffrey Walton
Posted: 22 November 2017 22:36:17(UTC)
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There does not really seem to be anything for the poor, which should concern all of us whatever our Political persuasions might be.
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Tony Peterson on 23/11/2017(UTC)
jeffian
Posted: 22 November 2017 23:10:55(UTC)
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Geoffrey,

What are you expecting for "the poor"? Personal Allowance raised to £11850 on its way to targeted £12500 by 2020. According to IFS, 50% of all 'taxpayers' pay no tax at all after working tax credits. Universal credit reviewed so that claimants can get 100% of entitlement within 5 days of applying (to deal with '6 week wait' claim). Minimum Wage increased. Short of saying that everyone should get the National Average income paid by the Government whatever their circumstances, what more would you expect (bearing in mind that that annual deficit is over £50bn and national debt approaching £2 trillion)?
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Tim D
Posted: 22 November 2017 23:11:45(UTC)
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geoffrey Walton;53537 wrote:
There does not really seem to be anything for the poor, which should concern all of us whatever our Political persuasions might be.


The increased personal allowance and the attempts to patch up Universal Credit must count for something? And the Big Issue has a piece up welcoming the "homelessness taskforce" and the council tax penalty on empty homes (something they'd been lobbying for). I'd agree with the comments the stamp duty thing won't do anything but push prices up more ("what the market will bear" principle).
geoffrey Walton
Posted: 23 November 2017 08:13:32(UTC)
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Thank you jeffian and Tim D, fair comments.
I just feel that low paid workers and others are still struggling. The extra £350 Allowance will only just (possibly) pay for the Council Tax increase, and maybe the wage cap % could have been lifted a little as people are going backwards quite fast due to inflation. But I agree the Country is not in a good position.
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Tony Peterson on 23/11/2017(UTC)
Micawber
Posted: 23 November 2017 09:12:02(UTC)
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UK economy faces 'longest fall in living standards in 60 years'
From the independent Resolution Foundation.
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North Star
Posted: 23 November 2017 09:41:07(UTC)
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The figures showing the lack of industrial investment is a worrying one. It's only investment in modern equipment that can improve productivity.
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Tim D
Posted: 23 November 2017 12:25:21(UTC)
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IMHO those low paid workers will not see their conditions improve until they Get Organized and the Unions start throwing their weight around again. Not holding my breath waiting for it though: the erosion of union power and casualisation of work are major headwinds.
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jvl
Posted: 23 November 2017 14:19:16(UTC)
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jeffian;53538 wrote:
Geoffrey,

What are you expecting for "the poor"? Personal Allowance raised to £11850 on its way to targeted £12500 by 2020. According to IFS, 50% of all 'taxpayers' pay no tax at all after working tax credits. Universal credit reviewed so that claimants can get 100% of entitlement within 5 days of applying (to deal with '6 week wait' claim). Minimum Wage increased. Short of saying that everyone should get the National Average income paid by the Government whatever their circumstances, what more would you expect (bearing in mind that that annual deficit is over £50bn and national debt approaching £2 trillion)?


Exactly. If anything, the 'poor' get too much coverage at the expense of the middle. Look at any objective hard stats over the past 20 years and inequality of income has been reduced. On the other hand, the people in the middle have been squeezed.

Housing benefit (helping to shore up and skew house prices)
Tax credits
Minimum wage
National working wage
etc

Welfare spending is huge and unsustainable.

It's not good for an economy or democracy for 50% of workers not to pay any tax. What interest do they have in keeping taxes low when 'other people' pay them? The logical end to this is that 51% vote for the other 49% to pay all the taxes for them.

Of course, uncontrolled, low-skilled immigration doesn't help. It's a net drain on tax-payers and takes up native low-skilled jobs or the incentive to invest properly.

Education needs to be improved. Over a quarter of British adults fail the benchmark numeracy and literacy test (PIAAC) test, far more than in most of Europe and Japan. If people don't have good enough skills and don't try to improve them, why expect the rest (who paid attention and worked at school) to pay for them?

Most of all though, interest rates need to be normalised. One of Gordon Brown's worst moves was to hand that off.
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Alan Selwood
Posted: 23 November 2017 14:48:13(UTC)
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Tim D;53554 wrote:
IMHO those low paid workers will not see their conditions improve until they Get Organized and the Unions start throwing their weight around again. Not holding my breath waiting for it though: the erosion of union power and casualisation of work are major headwinds.


When the unions 'threw their weight around' in the 1970s, the country's finances went further downhill, so what did they really achieve other than resentment and frustration? They certainly didn't usher in a brave new world of prosperity. Why should it be any different now?

It's usually much better for economic prosperity if people stop fighting each other for their share of the 'national cake' and concentrate on solving the problems that all face (not being efficient enough, not communicating well, not being prepared to do work that needs to be done).

If 'the poor' don't have enough to live on, perhaps it is not that they are not getting their fair share, but that there is not enough money to go round overall.

Given that 'the rich' that are actually few in number pay around 30% of all taxes and 'the poor' that are very numerous pay much lower tax rates, the only solution in terms of taxation is to tax the 'rich' into the ground (or emigration) so that 'the poor' save a few ££s each per year. It didn't work in Sweden when they tried taxing the rich at 100% or more of earnings (people emigrated instead). It doesn't work in France (people just leave the country).

There are, of course, countries elsewhere that have a much lower standard of living at home than we have here, even those of us who are poor. Some of them want to move here, others work in factories abroad for much lower wages than we enjoy and export their goods to us. You won't stop them being able to do this, whether or not you try to tax 'the rich' much more per head in order to pay a little more each to the far more numerous poor. (If you go all protectionist to save British jobs and put up UK production costs in the process, the UK consumer will be less able to buy what he wants and needs to provide the lifestyle he/she wants.)

[Time to put my head down and wait for the flak to finish flying overhead]

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Tony Peterson
Posted: 23 November 2017 15:00:26(UTC)
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Alan

Can you explain why the poor (who, you say are very numerous) are so numerous in the fifth richest country on earth?
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Tim D
Posted: 23 November 2017 15:44:51(UTC)
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Alan Selwood;53562 wrote:
When the unions 'threw their weight around' in the 1970s, the country's finances went further downhill, so what did they really achieve other than resentment and frustration? They certainly didn't usher in a brave new world of prosperity. Why should it be any different now?


Nevertheless, the 1970s represented something of a minimum for inequality in the UK:

GINI vs time
(source).

The slope corresponds exactly to the the 1979-1990 Thatcher premiership.

I can't find a plot of the Gini measure going back earlier, but there are other plots of things like this:
top 1% vs time
(source) which seem to confirm the picture of the 70s as being "peak equality", at least in the English speaking world (hmmm.... maybe this chart reveals the real conflict and values mismatch between the UK and Europe which will have us looking more to the USA in future).

Anyway, the condition of the poor won't improve without those chart's measures reversing course back towards where they were in the 70s. And it's hard to see how that'll happen without the poor getting a bit bolshie. Not something I'm looking forward to as a bona-fide 1%er... but sooner or later its bound to happen.

(BTW, also stumbled on this amusing "were the 70s really that bad?" read here).

Alan Selwood;53562 wrote:

It's usually much better for economic prosperity if people stop fighting each other for their share of the 'national cake' and concentrate on solving the problems that all face (not being efficient enough, not communicating well, not being prepared to do work that needs to be done).


In theory. But don't underestimate people's willingness to throw a tantrum and make things worse for everyone if they perceive they're not getting their fair share of the cake.
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jvl
Posted: 23 November 2017 16:49:12(UTC)
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Tim D;53572 wrote:

The slope corresponds exactly to the the 1979-1990 Thatcher premiership.


It also corresponds to the period where the UK pulled itself out of the horrible mess it had got into in the 1970s.

No wonder a lot of the top 1% stayed out of the country in the 1970s to avoid that mess and those extortionate taxes.

Cambodia had its 'peak equality' too in the 1970s, I'd guess. Peak equality isn't a good aim in itself.

From the same site ( https://ourworldindata.org/extreme-poverty/ )

"Despite the clear evidence, many people are not aware of the fact that extreme poverty is declining across the world.

The chart below shows the perceptions that survey-respondents in the UK have regarding global achievements in poverty reductions. While the share of extremely poor people has fallen faster than ever before in history over the last 30 years, the majority of people in the UK thinks that the opposite has happened, and that poverty has increased!

The chart below presents evidence from a survey in the UK, but ignorance of global development is even greater in other countries that were also surveyed. The extent of ignorance in the UK is particularly bad if we take into account that the shown result corresponds to a population with a university degree.
"

Something about the BBC rushing out to find bad news stories when a right-wing(ish) party is in power, perhaps?
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Recently Redundant and Retired
Posted: 23 November 2017 16:50:04(UTC)
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Tony Peterson;53564 wrote:
Alan

Can you explain why the poor (who, you say are very numerous) are so numerous in the fifth richest country on earth?


Statistically, the "poor" have to be numerous, the rich few, and everyone else somewhere in-between.
But if you collected in all the wealth in the UK and distributed in evenly over the population, it wouldn't take very long before you would be back to something resembling the distribution we see today. Thank capitalism and human nature.
Read what Karl Marx wrote about capitalism and the working class, proletarians v bourgeois.
Tony Peterson
Posted: 23 November 2017 16:57:53(UTC)
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R R & R

Can you tell me what "statistics" ( a wonderful discipline that I have some qualifications in - genuine at that -) demands that the poor have to be numerous and the rich few???????

Have you read Marx??
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Mickey on 24/11/2017(UTC)
Tim D
Posted: 23 November 2017 18:20:03(UTC)
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jvl;53573 wrote:
Tim D;53572 wrote:

The slope corresponds exactly to the the 1979-1990 Thatcher premiership.


It also corresponds to the period where the UK pulled itself out of the horrible mess it had got into in the 1970s.


I'm happy to credit Thatcher with that too. Begs the question whether it could have been achieved without the rise in inequality or not, or was it a necessary part of the plan? Did inequality have to rise to motivate the strivers, the Yuppies, the character that Harry Enfield "Loadsamoney" character satirised - into pulling their finger out? According to that "percentage of income going to the top 1%" chart, other European countries seem to be doing OK with less inequality (although I admit I haven't done any investigation of how much worse off I might be if I'd repeated my career & savings path in other countries; and I note I used to employ a Scandinavian who'd come to the UK partly because he liked to keep more of what he was earning)

jvl;53573 wrote:
No wonder a lot of the top 1% stayed out of the country in the 1970s to avoid that mess and those extortionate taxes.


So what *is* the correct/optimal/fair proportion of a countries income for various percentiles of the income distribution to claim? What is the optimal Gini coefficient of your ideal society?

jvl;53573 wrote:
Cambodia had its 'peak equality' too in the 1970s, I'd guess. Peak equality isn't a good aim in itself.


Quite; but enough of the population supported a communist insurgency for it to happen. I travelled in Maoist controlled regions of Nepal during their rise there and you could see the appeal to people with virtually nothing feeling abandoned by their state.

jvl;53573 wrote:

From the same site ( https://ourworldindata.org/extreme-poverty/ )
"Despite the clear evidence, many people are not aware of the fact that extreme poverty is declining across the world...."


I've watched enough of the late Hans Rosling's presentations to be well aware of that, and a fair number of my EM investments have been motivated by his optimistic view on developing world progress. However "extreme poverty" is defined as income of less than $1.25/day I think, so of little relevance to poverty in the UK. Interesting article here on prospects for UK poverty (defined as less than 60% of median income). Again, begs the question what the "optimal" level of poverty is? Or whether someone on 60% of median income is actually quite well off or not these days? (IMHO the word "poverty" comes with a few too many emotive Dickens/Hogarth overtones to be useful in rational debate).
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