The Pagefield Team have produced a handbook highlighting the key announcements, analysis and reaction from this afternoon’s Budget which you can read here in Pagefield’s Budget Review 2018
All Budgets are key moments for Chancellors and Prime Ministers but this one comes at a time when all eyes are focused on what our relationship with the EU 27 will look like once we leave next March.
By the time this Chancellor is next on his feet in the Commons with his red box we will have left the EU.
This was therefore the Government’s moment to show they have an economic plan to take the country through that potentially turbulent period and to safeguard growth, jobs, wages and investment.
The Prime Minister’s declaration at party conference that ‘austerity is over’ is all part of her work to build this narrative. The Chancellor will surely have agreed to support her in it, and reiterated that statement today in his “Budget that paves the way for a brighter future”.
Recognised for his economic prudence over political nous, pressure has built on Mr Hammond to deliver a statement that can be positioned as a success in the UK – and across Europe – while the final deal on Brexit is still being kicked back and forth between London and Brussels.
The public disagreement between No 10 and HM Treasury on whether ‘no deal’ would result in an emergency budget highlights how keen the Prime Minister is to strike the right balance before the conclusion of negotiations.
Therefore the Chancellor and his Prime Minister took this opportunity to show that the painful medicine the country has endured since the financial crisis has paid off and they want to reward the country for its patience.
In political code that means a handful of nice offers to voters and business to convince them that the Tories have a plan and they are the party to stick with in the coming years. This included:
- Announcing “a new path for public spending” with beneficiaries including NHS mental health services, local government social care units, the armed forces, the police and schools
- Increasing the tax-free personal allowance and higher rate threshold for income tax in April 2019
- Providing £1bn of additional funding over 5 years to help with the implementation of Universal Credit
- Steps to help struggling high streets including business rates cuts and a new Future High Streets Fund
- Announcing the abolition of the Private Finance Initiative for all future projects
- New rounds of investment in technology, R&D and infrastructure to support the delivery of the industrial strategy
- Attempts to grow business confidence with increases to exports support, the Annual Investment
- Allowance and extensions to funding for start-up loans