Reaction breakdown: Budget 2017

At a glance:

-£3bn for Brexit preparations
-£2.8bn for NHS in England including £350m for this winter
-£1.5bn to address Universal Credit concerns
-Stamp duty abolished for first-time buyers on properties up to £300,000

The Economy 

The good news: Annual borrowing is at £49.9bn this year, £8.4bn lower than forecast in March. Borrowing is forecast to fall steadily over the next 5 years, from £39.5bn in 2018-19 to £25.6bn in 2022-23.

Public sector net borrowing is also 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.

This is the first consistent debt fall forecast in 17 years.

The bad news: Although borrowing is down, poor productivity growth hits public finances significantly into the medium term. We are still meeting 2% borrowing target, but now with half the headroom. Growth forecast for 2017 downgraded from 2% to 1.5% and GDP downgraded to 1.4%, 1.3% and 1.5% in subsequent years, before rising to 1.6% in 2021-22.

Brexit

After threatening not to spend on getting ready for a no deal scenario until the “very last moment”, Hammond has now given in (to sense) and promised to set aside £3bn to prepare the UK for “every possible outcome” as it leaves the EU.

The “sin” taxes 

Tobacco will rise by 2% above Retail Price Index (RPI) inflation while the minimum excise duty on cigarettes introduced in March will also rise, as will duty on hand-rolled tobacco. Duty on beer, wine, spirits and most ciders will be frozen, but duty on high-strength “white ciders” is to be increased.

This rise will hit the poorest drinkers hardest, and will have a similar effect to Scotland’s minimum price alcohol policy.

Cars and the environment

From April 2018, diesel cars that don’t meet air quality standards will be hit by additional tax.

Hammond and Gove are to “investigate how the tax system and charges on single use plastic items can reduce waste”, which may mean a tax on single-use plastic items.

Personal taxation

Tax-free personal allowance to rise to £11,850 in April 2018 and 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.

Business

VAT threshold for small business to remain at £85,000 for two years in order to ease the strain on SMEs and support entrepreneurship.

Technology

The chancellor sees a successful post Brexit Britain as rooted in automation and the digital economy. As suspected, he has therefore promised £500m for 5G mobile networks, fibre broadband and artificial intelligence and £540m to support the growth of electric cars, including more charging points. A further £2.3bn has been allocated for investment in research and development – aimed at solidifying the UK’s reputation as a pioneering technology hub.

Education (England only)

As expected, the Chancellor has promised a £40m teacher training fund for under performing schools in England worth £1,000 per teacher. 8,000 new computer science teachers to be recruited at cost of £84m. Big push for maths: Secondary schools and sixth-form colleges to get £600 for each new pupil taking maths or further maths at A-level at an expected cost of £177m.

Welfare 

The Government is stubbornly sticking with Universal Credit, but has allocated a £1.5bn package to “address concerns” about its delivery. Seven-day initial waiting period for processing of claims to be scrapped, and claimants to get one month’s payment within five days of applying.

Health and social care

Hammond said he will give an extra £10bn capital investment to the NHS over this parliament. This year alone, the NHS will give an extra £2.8bn to NHS England. £350m of this will be used immediately to address pressures this winter.

Nurses will also be given a pay review, if not an immediate rise, he said

Housing

The long-term goal is to build 300,000 new homes a year by the mid-2020s. To do this, the chancellor will implement a 100% council tax premium on empty properties, and compulsory purchase of land banked by developers for financial reasons.

From today, the government will abolish stamp duty for all first-time buyers for homes worth up to £300,000 in the UK, or £500,000 in London. This will mean 80pc of first-time buyers pay no stamp duty, helping them get on the housing ladder.