The British economy is stagnating with expected growth likely to fall short of the predictions of previous years.
Chancellor Phillip Hammond explained to MP in his Autumn Budget 2017 speech that experts at the independent Office of Budget Responsibility had cut their forecasts for the next five years.
The economy will grow by 1.5% this year, 1.4% in 2018, 1.3% in both 2019 and 2020, before picking back up to 1.5%, and finally 1.6% in 2022, said Hammond.
It’s the first time in two decades that a Chancellor has reported GDP growth is predicted at lower than 2% every year.
He briefly mentioned Brexit – saying the government had already spent £700 million on leaving Europe and that he had set aside another £3 billion in a war chest.
£27 billion extra for house building
“While we work to achieve this deep and special partnership we are determined to ensure that the country is prepared for every possible outcome,” said Hammond.
“And I stand ready to allocate further sums when needed. No one should doubt our resolve.”
Opposition leader Jeremy Corbyn catcalled that the Tories were not fit to govern and that their economic plans were a failure.
In his 62-minute speech, Hammond concentrated on stoking the government’s house building policy with extra cash of £27 billion, taking the amount available to £44 billion
His target is to build 300,000 new homes a year by 2025.
First time buyers were the big Budget winners, with stamp duty scrapped on any £300,000 home purchase and for the first £300,000 on homes valued up to £500,000.
Pensions and property
Pensions and property came through unscathed after years of tweaking.
For pensions, the lifetime allowance was upped in line with inflation to £1.03 million from April 2018.
Otherwise, the only other measure is ‘modernising’ tax relief on certain employer premiums paid into offshore pensions.
For property, non-resident landlords will see their capital gains tax liabilities aligned with UK taxpayers. This means CGT levied on commercial property sales.
For business, the Chancellor revealed billions of pounds of extra funding for technology innovators.
He hailed the government for supporting the biggest rail investment since Victorian times with the London Crossrail project and a second high speed train line.
Turning point in history
The Chancellor also explained the nation was undertaking the biggest road building scheme for nearly 50 years.
“One of the things I love most about this county is its sense of opportunity,” said Hammond.
“I have always felt it and I want young people today to grow up with that same sense of boundless opportunity. In this Budget I have set out a vision for Britain’s future, and our plan for delivering it.
“We are at a turning point in our history and we resolve to look forwards, not backwards. To build on the strengths of the British economy. To embrace change, not hide from it. To seize the opportunities ahead of us.
“And, together, build a Britain fit for the future.”
This was a safe budget from the Chancellor, one which will probably keep him in his job – for now.
He tried to demonstrate that he was listening to concerns expressed at the general election and by rebels on the Tory backbenches and opposition MP’s.
So, there were changes to the universal credit benefit, more money for the NHS - and new money for house building.
He made a bigger than expected announcement in scrapping stamp duty for first-time house buyers on the first GBP 300,000 of any property purchased.
There was also money set aside for a ‘no deal’ Brexit scenario.
However, whilst the Chancellor was upbeat, claiming that the UK economy was starting to turn a corner on Britain’s National Debt, it’s difficult to escape a gloomy economic outlook for the UK – one characterised by slow and sluggish growth and lower productivity.