Chancellor delivers first Budget as Brexit looms
Chancellor Philip Hammond delivered his first budget today that will “prepare Britain for a brighter future” as he promised a platform of stability for the UK’s Brexit negotiations.
For the construction industry, there was no headline grabbing moments but the Chancellor announced funding for new schools, measures to tackle the skills shortage, further investment to tackle congestion on England’s road network and to support the transition to a digital economy.
In what we was billed as the final Budget to take place in the spring, Mr Hammond delivered an upbeat assessment of the Britain’s economic position as the country prepares for Article 50 to be triggered this month.
He said that the UK’s growth outstripped both the United States and Japan, and second only to Germany with employment at a record high.
The robust performance of the economy since last June’s European Referendum has led to revised forecasts from the Office for Budget Responsibility for higher growth and reduced borrowing but the Chancellor said productivity was still “stubbornly low”.
At the weekend, the Chancellor spoke about ensuring that the economy has got “reserves in the tank” as the UK prepares for Brexit so it came as no surprise that he ruled out “unfunded spending”.
In an effort to increase productivity and combat the skills gap in the construction industry, which may be exacerbated further by the loss of migrant labour following Brexit, the Chancellor unveiled an extra £500M a year investment in training young people.
New ‘T-Levels’ will replace 13,000 qualifications with just 15 paths that are linked to the needs of employers.
The number of hours training for 16-19 year old technical students will increase by more than 50%, with the new qualifications seeing students engaging in high-quality 3 month work placements.
The new courses are due to start from the 2019/20 academic year.
Mr Hammond announced £320M for 140 new free schools plus a further £216M on infrastructure for existing schools – an increase in schools spending by more than £500M.
Ahead of the Budget, Mr Hammond had come under pressure from business leaders to ease the financial burden stemming from higher business rates.
As the tax brings in around £25Bn a year for the Treasury, the Chancellor ruled out the possibility of abolishing the rates.
He announced measures to help those companies hardest hit including ensuring no firms losing small business rate relief will see their bill rise by more than £50 a month next year.
Mr Hammond announced £690M for local authorities to tackle “urban congestion” with £90M to spent in the North and £23M for the Midlands to address pinch points on roads.
The self-employed face being hit with a tax increase of 2% in National Insurance Contributions.
The Chancellor said the rise was necessary to address a difference in NICs between the self-employed and those in employment.
The increase of NICs for the self-employed from 10% to 12% would help to “support our public services in this Budget and to improve the fairness of the tax system”.
The move to a digital economy will be underpinned by funding of £270M in technologies such as robotics, biotech and driverless vehicle systems.
An investment of £16M will see the creation of a 5G hub to trial the future mobile data technology.
£200M will also go towards supporting local “full-fibre” broadband network projects that are intended to attract further private sector investment.
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