What The 2017 Budget Means For The Northern Region

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Chancellor Philip Hammond has detailed his 2017 Budget in Parliament today revealing details on the health of the UK’s economy  and where spending will be allocated in the coming years.

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Image Credit: accountantshouse.co.uk

The rumour mill for the 2017 Budget was rife with signs that the Northern region could have one of it’s most successful finance allocations in recent years. As we love talking about all aspects of Northern business and lifestyle here are some of the key details of this year’s budget. I’ve highlighted in particular the affects on the Northern region – those that matter to us!

Just an added note that this post will attempt to stay politically neutral. I’ll stick to stating what was announced during the official 2017 Budget announcement with little comment and spectatorship. 

Overall UK Economy Outlook

GDP growth, the key indicator for the health of any economy, has stagnated; revised down to 1.5% in 2017 from 2%.

New forecasts are as follows;

  • 1.4% in 2018
  • 1.3% 2019
  • 1.3% 2020
  • 1.5% 2021
  • 1.6% 2022

This is ‘the first time in modern history that the official UK GDP growth forecasts are below 2% every single year over the forecast horizon‘, Ed Conway. A rather gloomy outlook.

Philip Hammond is still committed to ‘balancing the books’ like his predecessor, George Osborne. He has, however, slowed the pace of reducing the deficit so borrowing will reduce less rapidly than forecast previously in March. Government borrowing will stand at £49.9bn this year, down by £8.4bn from previous forecast. It is also forecast to be down from £39.5bn next year to £25.6bn in 2022-23.

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Image Credit: Paul Grogan Photography

Key National Points From The 2017 Budget

Stamp Duty

  • Abolished for first-time buyers on homes up to £300,000, and on the first £300,000 of properties up to £500,000.

Housing

  • 100% council tax premium on empty properties.
  • £28m in three new housing pilot schemes – in the West Midlands, Manchester and Liverpool – to halve rough-sleeping by 2022 and eliminate it by 2027.
  • £44bn of capital funding to help build 300,000 homes annually by mid-2020s.
  • New money for home builders fund.
  • £630m ‘small sites fund’.
  • £8bn of financial guarantees to support private housebuilding.
  • £2.7bn housing infrastructure fund.
  • £1.1bn for new urban regeneration.
  • £34m to train construction workers.
  • A review to be chaired by Oliver Letwin to look at ways to speed up planning permission.
  • Five new garden towns.
  • One million new homes on the Cambridge-Milton Keynes-Oxford corridor by 2050.

Universal Credit

  • £1.5bn to remove seven-day waiting period; new claimant in receipt of housing benefit will get it for two weeks.

Brexit

  • £3bn set aside for Brexit preparations.
  • This is an increase from £700m previously allocated. Does this indicate that the government may be beginning to prepare to crash out of the EU with a hard Brexit? We’ll have to wait and see.

NHS

  • The general public have been crying out for more spending on the NHS, especially as we go into the winter months. The chancellor has committed an extra £2.8bn allocated to NHS England, falling short of the £4bn requested from chief executive, Simon Stevens.
  • £10bn capital investment in frontline services over the course of this parliament.

Living Wage

  • Up to £7.83 an hour from £7.50.

Income Tax

  • Basic rate rises to £11,850 from April; 40% threshold increases to £46,350.
  • Chancellor has previously pledged to increase basic rate to £12,500 by 2020. 

Education

  • Maths: £40m for maths teachers; £600 premium for schools for each student taking A level maths.
  • Computing: triple number of science teachers to 12,000; new national centre for computing.
  • National retraining scheme for digital expertise.

Duties on fuel, spirits, wine and beer

  • Simply put; FROZEN.
  • Fuel duty rise; CANCELLED.

New railcard

  • 4.5 million people aged 26-30 to get a third off rail fares.

Grenfell Tower

  • £28m for mental health services and local regeneration for Kensington and Chelsea council.

Tax avoidance

  • Measures to raise £4.8bn by 2022-23.
  • Especially important after the release of the Paradise Papers.

Business rates

  • £2.3bn cost to bring forward the change to Consumer Prices Index from Retail Prices Index by two years to 2018.
  • After next revaluation, future revaluations to take place every three years rather than five.
  • Staircase tax: businesses hit will have original bill reinstated.
  • Discount for pubs (rateable value less than £100,000) extended by one year to March 2019.

VAT

  • Consultation on threshold of £85,000 at which small businesses pay VAT.

Digital tax

  • £200m a year extra from income tax on UK sales.
  • Target £1.2bn a year in lost VAT from online shopping.

You can read more details on many websites but this data has been taken from The Guardian article here.

2017 Budget & The Northern Region

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Image Credit: Chronicle Live

The Northern Powerhouse as a whole has been allocated £1.7bn from the transforming cities fund. This is a promising outlook that May’s government haven’t given up on the Northern Powerhouse; the brain-child of George Osborne.

Here are some other points from the 2017 budget relating to the Northern Powerhouse initiative…

Northern Powerhouse Rail

  • £300 million will go towards ensuring High Speed 2 (HS2) infrastructure can accommodate future Northern Powerhouse and Midlands rail services.
  • This will enable faster services between Liverpool and Manchester, Sheffeld, Leeds and York, as well as to Leicester and other places in the East Midlands and London.
  • It will also enable future services between Liverpool and Leeds to go via Manchester Piccadilly Station.
  • No mention of what HS2 can do for the North East region however – disappointing.

North of Tyne Devolution Deal

  • Newcastle, North Tyneside and Northumberland will come together to form a new authority with an elected metro mayor appointed in 2019.
  • This will see £600 million of investment in the region over 30 years with powers over important economic levers including planning and skills.
  • They will join other Northern devolution deals including the Tees Valley, Greater Manchester and Liverpool City.

Tyne & Wear Metro

  • Metro users, rejoice! I’m sure a lot of people throughout the North East will be happy about this news.
  • The government will invest £337 million to replace the Tyne & Wear Metro’s nearly 40-year-old rolling stock with modern energy efficient trains.
  • The new feet will cut running costs while boosting performance and reliability for the 38 million passengers that use the system annually.

Redcar Steelworks

  • £123million to kick start the South Tees Development Corporation.
  • The investment will be used towards remediating the site and will pave the way for investment from some of the 60 private companies which have already expressed serious interest in the area.
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Image Credit: BBC

Greater Manchester

  • Greater Manchester and the government will work in partnership to develop a local Industrial Strategy.

Jodrell Bank

  • The government is providing £4 million to Jodrell Bank, subject to approval of a sustainable business case, as part of their £20.5 million project to create a new interpretation centre promoting the historically significant scientific work undertaken at this site in Cheshire.

Liverpool City Region and Tees Valley

The government will enter into discussions with the Liverpool City Region and Tees Valley to explore scope for further devolution to these areas, to promote local growth.

Final Thoughts

So that’s it for all the key details on the 2017 Budget for both the country as a whole and for the Northern region. You can read the full autumn budget here.

We’ll have to wait and see what effect this budget has on the people and place of the North but let’s hope it’s positive.

You can check out more posts in our business section here.

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