Budget 2017: Money For Brexit (and Changes to UC)

East of the M60‘s frank verdict on Philip Hammond’s 2017 Budget

  • Brexit department biggest winner of 2017 Budget;
  • Slight changes for Universal Credit claimants;
  • 16 – 25 Railcard extended to cover persons born from 1986 to 1991;
  • Stamp Duty scrapped for first time buyers.

More than anything, today’s budget was a disappointment. Firstly, we are no clearer as to whether the Trans-Pennine electrification work is going ahead in its unabridged form. Secondly, it seems as if the money for the terrorist attack at Manchester Arena has gone to the Department for Exiting the European Union. Thirdly, those good eggs have cut the waiting time for Universal Credit (but don’t all rush at once).

Other parts of the budget will see the scrapping of Stamp Duty for properties under £300,000. Also some extra money for Merseyside’s and Greater Manchester’s elected mayors. Plus, in England, the privatisation of housing associations.

Today saw the first Budget of a new parliament, which has the Conservatives propped up by the Democratic Unionist Party (DUP). As with every Budget and Autumn Statement, East of the M60 will read between the lines of this year’s Budget, so you don’t have to. This is because we are good like that.

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Business

With uncertainty surrounding Brexit, the Office for Budget Responsibility’s predicted GDP growth rate is 1.5%. The OBR has also lowered its assessment of unemployment rates to 4.6%. Earnings are expected to remain static in spite of changes to Income Tax and National Insurance thresholds. It is predicted that the deficit would be cleared by 2025 – a far cry from previous optimistic predictions.

From the 2018 – 2019 financial year, Business Rates will be uprated on Consumer Prices Index rates. Also, levies for Aggregates and HGV VED [Vehicle Excise Duty] and Road Users will be frozen from the same year.

Brexit

By far, the biggest winners of the 2017 Budget is the Department for Exiting the European Union. An eyewatering £3 billion has been allocated towards leaving the EU. Recent reports have had the EU Divorce Bill weighing in at £40 billion (which could keep Tameside Hospital’s A&E going for 20 years).

Environment

An extra £76 million on flood and coastal defence schemes have been allocated with £40 million of which focused on deprived areas. It states on GOV.UK that the government will support low carbon electricity. Mixed messages we think, given their alleged support by some MPs for high carbon energy sources.

Local Government

Little change has been proposed for local government apart from the business rates retention scheme. The government will continue its pilot scheme across England. There will also be a £12 million fund for Mayoral Combined Authorities for the next financial year and the following one (2018 – 2019 and 2019 – 2020).

In a bid to boost infrastructural spending, the government has introduced a Local Infrastructure Rate. With a cap of £1 billion, local authorities could borrow at a newly discounted interest rate of gilts and 60 basis points for three years. Details of which will be announced on GOV.UK next month.

Movement

If you’re the proud owner of an electric car, you could benefit from tax breaks for charging your vehicle. Driverless cars have been given a boost with the introduction of regulatory frameworks.

There is also a boost for the Tyne and Wear Metro’s new trains, whereas funding announced for the Trans-Pennine electrification scheme offers no new money. Other plans include the improvement of telematics along the route, such as on-board WiFi and mobile internet. For Greater Manchester, Andy Burnham will be given £243 million to spend on transport projects within the city region. This is from the Transforming Cities Fund available to elected mayors for transport spending.

If you can just about afford the train fares and aged 16 to 30, say hello to changes in the Young Persons’ Railcard. The off-peak discount card will be extended to cover passengers up to the age of thirty years old.

People

The biggest change to our social security system concerns Universal Credit. At present, claimants expect to wait six weeks, and some have waited longer. Instead, the wait will be cut to five weeks. A step in the right direction but not good enough. If you have left your job or need to claim in-work tax credits, any wait for unemployment relief (in our view) should be no longer than five days.

To tide claimants over the month’s wait without UC payments, an advance will be available. On receiving your first Universal Credit payment, your advance becomes a repayable loan, paid over 12 months. Some money has also been allocated for back-to-work programmes, which we think is the soon-to-be-launched Work and Health Programme. Before you contain your excitement over changes to UC, these shall take effect from February 2018. So Christmas is still cancelled for a lot of claimants.

The National Minimum Wage (or the Tories’ bogus Living Wage if you prefer) will rise from £7.50 per hour to £7.85 per hour. Rates for 16 – 17 year olds will rise from £4.05 to £4.20 an hour. For 18 – 20 year olds, £5.60 to £5.90 per hour. For 21 – 24 year olds, £7.05 to £7.38 per hour. The Apprentices’ allowance will be raised from £3.50 to £3.70 per hour. These rises will take effect from April 2018.

Housing

If you are a homeowner or first time buyer, the abolition of Stamp Duty on properties less than £500,000 may be a godsend. In a bid to balance the books, the Treasury has bad news for anyone living in Housing Association properties in England. Yes, the Tories have considered the privatisation of Housing Associations. This could see, for example, New Charter Housing Trust raising their social rents to ‘market rates’. In line with rents on their Summers Quay development, part of a NCHT for-profit arm.

Therefore, the privatisation of Housing Associations and Stamp Duty changes could see higher house prices. In a era where more affordable housing is required, the Tories wish to make it a pipe dream. The abolition of social housing in England shows their nasty party credentials in this people.

Oh, and guess what they have suggested for incumbent tenants? The Son of Right To Buy. Well done Tories, congratulations on making homelessness as much a life choice as starting school and being sanctioned. (Needless to say, we are appalled by their egregious sell off of social housing). You said you would tackle homelessness, but creating more cardboard cities isn’t what we had in mind. Plans to curb homelessness in the West Midlands, Greater Manchester and Merseyside are a mere sticking plaster.

Health

For the NHS, there is little to say apart from the addition of £2.8 billion funding for NHS England. A £10 billion capital investment in frontline services has been proposed. What is not clear is how it will be spent. Especially under the shadow of STPs (which may see Tameside Hospital losing its A&E department).

The £2.8 billion is well under the £4 billion demanded by NHS England’s Chief Executive, Simon Stevens. Yes, you’ve guessed it, more deliberate underfunding leading to its full privatisation.

Education

If your child wishes to take up art or music, any dreams of extra funding have been kyboshed. The only education funding that has been announced is the £40 million for maths teachers, and a £600 premium for teachers per student taking mathematics ‘A’ level courses. They aim to triple the number of computing teachers.

Also proposed is the introduction of ‘T’ Levels for technical subjects and the creation of a National Retraining Scheme. As part of a National Retraining Partnership, it entails a formal skills partnership with the TUC and the CBI.

Tobacco and Alcohol

A bad day for Cornwall? ‘Real cider’ and ‘real perry’ between 6.9% – 7.5% will be subject to a new duty rate. Aimed at ciders like White Storm, traditional Cornish and Herefordshire cider makers will also be penalised. This will be implemented in 2019.

If your preferred tipple is John Smith’s Extra Smooth, Strongbow, Prosecco or Laphroaig, duty rates will be frozen. Before you rush off to the pub, that as ever will be cancelled out by the Pubco’s or brewery’s revised prices.

Unless you bought your ciggies or rolling tobacco before 6pm today, all tobacco products have increased by 2% above the Retail Price Index rate. For rolling tobacco, another 1% has been added to that.

The 2017 Budget from a Tameside perspective

Well, nothing new, more of the same old cuts and, in the case of electrification, no new money. The biggest national issue affecting Tamesiders is Universal Credit. Especially as they go hand in hand with the borough’s other problem, homelessness. The changes to the waiting time is a step in the right direction but not enough. Five weeks is still too long. Waiting for the change of waiting to February is too long. If the Conservatives really gave a flying furball, they would have made the change next month.

Plans to privatise Housing Associations will exacerbate homelessness in the borough. The use of Right To Buy for, for example a New Charter home, coupled with Stamp Duty changes could drive up house prices.

As things stand, money for the Trans-Pennine electrification scheme is nothing new. Besides improving the ability to take and upload pictures of our packed trains, we don’t know where the wires will end. There is no new money for bus routes, though the Mayor of Greater Manchester may choose to spend part of the £243 million budget on them.

With the NHS, another year of struggle for our hospital. The shortfall in funding could threaten the future of Shire Hill Hospital. That alongside Sustainability and Transformation Partnerships which could see the downgrading or loss of Accident and Emergency facilities at Tameside Hospital.

Attracting the most ire among local commentators is a broken promise. Following the Manchester Arena terror attack, the We Love Manchester fund was launched to help their families. The government agreed to contribute but, six months on, no money.

East of the M60 Comment: Grey, Eurosceptic, and No Friend of the NHS

As budgets go, this was a good one for Brexiteers and owners of electric cars. Not a bad one for elected mayors.

On the whole it was grey, with gloomy economic forecasts in advance of Britain’s departure from the European Union. Not for the first time, the NHS in England was royally shafted. Firstly, the money was Simon Stevens requested wasn’t paid in full. Secondly, the £3 billion for leaving the EU/21st century (delete as appropriate) could have been added the National Health Service’s £2.8 billion figure.

With the lack of anything imaginative (existing projects dressed up as new announcements), and a lot of holes, this was no one nation budget. Though the Midlands, Greater Manchester, London, and Merseyside were represented, there was nothing new for Preston or Crewe. There was absolutely nothing for the arts and culture, whether in academia or in our art galleries.

Though the changes to Universal Credit are welcome, they do not go far enough. Instead of five weeks, the maximum wait should five days. The National Minimum Wage is still scandalously low for sixteen-year-olds compared with an older colleague’s wage rate.

There was nothing creative. Everything was geared towards hard sums and gradgrindism. We need a change. Better still, a change of government. One in favour of an exit from Brexit would be nice.

S.V., 22 November 2017.

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