Our thoughts on some of the Budget measures
I am the type of person that likes to spot patterns, lines of symmetry and coincidences and, having sat through the Budget speech, I have alighted on the number three. It has cropped up with surprising frequency in this, the Chancellor’s 3rd fiscal event.
One of the early announcements was a £3bn Brexit contingency fund which we are told will be made available to absorb unexpected costs associated with the UK leaving the EU. Looking a little deeper we learn that it will be shared out across Whitehall departments, half being made available in 2018/19 and half in 2019/20. The more ardent Brexit supporters will already have spotted that the second half won’t be made available until after Brexit day, coming on 29th March 2019, one week before the 2019/20 tax year begins.
300,000 has appeared twice. Stamp Duty will be scrapped for first time buyers on property purchases of up to £300,000 and on the first £300,000 for purchases of up to £500,000 in London, or rather, to quote the Chancellor himself, “in very high-priced areas like London”. So crunching the numbers, a first time buyer spending £400,000 until yesterday would have had to fork out £10,000 in Stamp Duty. Now the bill will be £5,000. Pity those who exchanged last week!
The other 300,000 is the number of new houses the Chancellor hopes will be built every year over the next five years thanks to a £44bn funding package. Whilst on the subject of housing, I also note that councils will be able to apply a 100% council tax surcharge on unoccupied properties. I wonder what will be the definition of ‘unoccupied’. Will the holiday cottage that you visit four weeks of the year be deemed to be unoccupied for the other 48 weeks? And how will they know? Will the council come knocking to see if you’re in?
The NHS will be getting a funding boost with an immediate £350million. That doesn’t sound like much, but I’m sure that figure is deliberate – remember the Brexit battle bus? In all, an extra £2.8bn has been pledged to the NHS outside the £10bn promised by the end of the parliament in the spending review process.
I cannot let a Budget review go by without some comment on measures relating to personal finance, but there were slim pickings this time. The only one worthy of note, and which thankfully contains a three, is the confirmation that the pension Lifetime Allowance will increase by £30,000 to £1,030,000 from April 2018. What this means in pounds and pence terms is £16,500 less tax to pay for those who exceed the Lifetime Allowance.
To round up the threes, £300million is the additional funding that will be put towards HS2 railway infrastructure; inflation will peak at 3% before returning to target; 3 million new jobs have been created since 2010; we are told that the Government is delivering on the target of 3 million apprenticeships by 2020; the Teaching for Mastery of Maths programme is being expanded in 3,000 schools; and £30million will be invested in the development of digital skills distance learning.
Phew, that’s a lot of threes; but there is one more in the shape of the three former presenters of Top Gear. I flatter myself that the Chancellor must have read my letter in the Financial Times after last year’s Autumn Statement was panned for being dull. I would like to think that Mr Hammond drew inspiration from my letter when he made a joke at Mr Clarkson’s expense whilst talking about driverless vehicles: “I know that Jeremy Clarkson doesn’t like them…sorry Jeremy, but definitely not the first time you’ve been snubbed by Hammond and May.”
Philip Chandler APFS, CFPTM, Chartered MCSI
Chair of Aspinalls Technical and Investment Committee