Budget Breakdown: Chancellor downgrades Britain’s growth forecasts

By Cameron McIntosh

The Chancellor’s Autumn budget is not exactly the headline-grabbing, impassioned politics we have become accustomed to in recent years, but Philip Hammond’s proposals will have far-reaching impact nationwide.

The embattled Chancellor is not short of detractors within the Conservative party and this was an opportunity to establish a semblance of authority for both himself and the faltering cabinet to which he belongs. Controlling the purse strings of Britain’s diverse economy is far from straightforward at the best of times, but with the triumvirate of a slim parliamentary majority, fruitless Brexit negotiations and Corbyn’s audacious spending plans, it represents a particularly daunting task for the current occupier of number 11 Downing Street.

Addressing the imbalance that has left thousands of young people perilously ill-equipped to get on the housing ladder, the Chancellor’s headline announcement was the abolition of stamp duty on properties up to £300,000

The speech was positive in tone, but negative in message. Britain’s fiscal outlook made grim reading, as growth forecasts were downgraded to account for a slump in productivity levels. Added to the equation was the ever-present Brexit conundrum. The warning signals sounded as the Chancellor earmarked a sizeable £3bn fund for dealing with the Brexit process, on top of the £700m already allocated. Making it abundantly clear that a no-deal ‘cliff-edge’ Brexit remains a very real, and very costly, prospect.  

Housing was undoubtedly the centrepiece. Addressing the imbalance that has left thousands of young people perilously ill-equipped to get on the housing ladder, the Chancellor’s headline announcement was the abolition of stamp duty on properties up to £300,000. This will result in an effective reduction of £5,000 for those entering the housing market for the first time.

Humour is not often associated with the Treasury, or indeed Mr Hammond, but Spreadsheet Phil did manage to crack a few Dad jokes to lighten the mood

Increasing home ownership is a tried-and-tested method for the Conservative party in winning electoral support. As one of the central tenets of Thatcherism in the 1980s, Right to buy schemes have traditionally won them support among the working class. However, it appears unlikely that such a modest gesture towards alleviating the heavy financial burden carried by first-time buyers will be enough to loosen Labour’s tight hold on today’s youth vote.

Humour is not often associated with the Treasury, or indeed Mr Hammond, but Spreadsheet Phil did manage to crack a few Dad jokes to lighten the mood. He disguised his familiar attack lines against the opposition’s spending plans with a cultural reference to Kezia Dugdale’s appearance on reality TV. He joked: “There’ll be plenty of others joining Kezia Dugdale in saying ‘I’m Labour, get me out of here.’” Even Theresa May, in a bid to show her famously evasive human side, managed to get in on the act. Upon the Chancellor’s reference to her spluttering disaster at the party conference, the Prime Minister promptly met here cue with a packet of cough sweets. Gimmicks aside, there were a number of other important proposals.

The overarching message from this Autumn’s budget is a gloomy one

Railcards will be extended to those aged between 26 and 30, matching the discount already given to 16 to 25 year olds. Furthermore, while duty on white ciders will be increased in line with new legislation, the duty on wine, beers and spirits will be frozen, which will equate to 6p off the average bottle of wine over the Christmas festivities. Finally, additional funding will be granted to the NHS, teacher’s will receive a £40m training fund and maths will receive a £177m push in secondary schools nationwide.

Although there are some positives to take from Hammond’s proposals, the overarching message from this Autumn’s budget is a gloomy one. The economy is slowing down and with the government set on pursuing Brexit at all costs, the fiscal outlook will likely get worse before it gets better.

Photographs: EU2017EE Estonian Presidency via Flickr and BEARTOMCAT (Bear) via Flickr

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