Fylde coast reacts to sober budget

Chancellor Philip Hammond departs 11 Downing Street, London, as he heads to the Palace of Westminster to deliver the Budget statement. PRESS ASSOCIATION Photo. Picture date: Wednesday March 8, 2017. Mr Hammond is expected to deliver an upbeat assessment of Britain's economic prospects after Brexit in his first Budget as Chancellor, despite admitting that more austerity is in the pipeline as he battles to get the deficit down. See PA story BUDGET Main. Photo credit should read: Lauren Hurley/PA Wire
Chancellor Philip Hammond departs 11 Downing Street, London, as he heads to the Palace of Westminster to deliver the Budget statement. PRESS ASSOCIATION Photo. Picture date: Wednesday March 8, 2017. Mr Hammond is expected to deliver an upbeat assessment of Britain's economic prospects after Brexit in his first Budget as Chancellor, despite admitting that more austerity is in the pipeline as he battles to get the deficit down. See PA story BUDGET Main. Photo credit should read: Lauren Hurley/PA Wire
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New T-Level qualifications to boost the status of technical studies, help to tackle the A&E crisis, aid to lessen the blow of business rate revaluation and £90m to beat traffic jams in the North were among the headline measures in the Chancellor’s last ever Spring Budget.

But as Philip Hammond gave with one hand he took away with the other thanks to increases in national insurance contributions for self employed people, a crackdown on tax evasion and dividends allowances and a lack of action on counteracting the effects of inflation for lower paid and not enough help to tackle the social care crisis.

Some £2bn was announced for social care in England over three years – well below the levels demanded by some campaigners – while a £435m package will ease the burden on firms facing huge hikes in business rates.

But with Mr Hammond ruling out an increase in borrowing and insisting that Britain must get back to “living within its means”, he announced a National Insurance increase for higher-earning self-employed workers which will rake in £145m a year.

Labour leader Jeremy Corbyn dismissed the Chancellor’s statement and accused him of “utter complacency” about the state of the economy, public services and the lives of millions of Britons.

Cash-strapped councils have struggled to fund social care, increasing strain on the NHS as hospitals struggle to discharge patients if they cannot be properly looked after in the community.

The three-year deal involves £1bn in 2017/18 as Mr Hammond acknowledged “the system is clearly under pressure and this in turn puts pressure on our NHS”.

He also said ministers would set out plans for the future financing of the social care system later this year - but stressed this would not include a so-called Death Tax levied on estates.

The Chancellor also announced a £100m plan to help A&E units next winter by funding GP triage projects in English hospitals, insisting: “We are the Government of the NHS.”

This April’s business rate revaluation has hit some businesses hard with rises of up to 25 per cent. Mr Hammond set out a £435m package to lessen this – including a £1,000 cut for most pubs which were among the hardest hit plus a £300m fund to councils to help firms hardest hit

He announced Transport spending of £90m for the North to address pinch points on roads, and a new £690m competition for English councils to tackle urban congestion.

There was no change to previously planned rises of duties on alcohol (2p on a pint) and tobacco, but a new minimum excise duty is introduced on cigarettes based on a packet price of £7.35.

ECONOMY:

The Office of Budget Responsibility says growth is up this year from 1.4 per cent to 2 per cent.

GDP downgraded to 1.6 per cent, 1.7 per cent, 1.9 per cent in subsequent years, then 2 per cent in 2021-22.

Inflation to rise to 2.4 per cent in 2017-18 before falling to 2.3 per cent and 2.0 per cent in subsequent years.

Borrowing forecast to total £58.3bn in 2017-18, £40.6bn in 2018-19, £21.4bn in 2019-20 and £20.6bn in 2020-21

TRANSPORT:

Another £90m to address pinch points on roads, and a new £690m competition for English councils to tackle urban congestion.

Vehicle excise duty rates for hauliers and the HGV Road User Levy frozen for another year

HEALTH AND SOCIAL:

Hospitals will get £325m to implement their controversial sustainability and transformation plans and another £100m for new GP triaging projects to ease pressure on A&E departments.

The social care system will have another £2bn over the next three years, with £1bn available in 2017/18.

EDUCATION:

Another 110 new free schools will be opened, including a new generation of grammars.

Free school transport for children on free school meals who attend a grammar, and £216m will go into repairing existing schools.

New T-Levels to be introduced to give parity of esteem for technical education and simplify qualifications

TAX:

Higher paid self-employed workers are to pay 60p a week more in National Insurance contributions as part of changes to raise an extra £145m by 2021-22.

No changes to income tax, VAT or other National Insurance categories

Personal tax-free allowance to rise as planned to £11,500 this year and to £12,500 by 2020

SIN TAXES:

No change to previously planned upratings of duties on alcohol and tobacco, but a new minimum excise duty will be introduced on cigarettes based on a packet price of £7.35.

Business rates:

£435m in rates relief for small businesses. Firms losing small business rate relief will have their monthly increase capped at £50 for a year, 90 per cent of pubs will be given a £1,000 discount on business rates in 2017, and councils will be given a £300m fund to hand out relief to small businesses.

Blackpool South Labour MP Gordon Marsden said it was a sticking plaster budget short on detail.

He said few people on the Fylde coast would be cheering the increases in National Insurance Contributions for self employed people, a measure he suggests which had broken an election tax promise by the Conservatives.

He said: “The rates discount for pubs is welcome. I have fought long to keep our community pubs open and this will help a little and perhaps disuade pub companies from closing more of them.”

He said the changes to technical skills did not go far enough and it was not clear when investment would reach £500m a year for 16 to 19-year-olds.

He added: “But there is not a penny piece for adult skills and re-training.

“The £2bn on social care over three years is better than nothing but if you look at what the think-tanks and independent bodies were saying it is nowhere near enough. It is a sticking plaster.”

But Fylde Conservative MP Mark Menzies welcomed the announcements.

He said: “We again see a budget to help working families from the Chancellor.

“The rise in personal allowance to £11,500 puts hundreds of pounds back into every household.

“And the doubling of child care to 30 hours a week will help thousands of families.

“Real wages have risen for 27 months in a row - more good news for hard working families.

“I’m also delighted with the £435m package to help small businesses, and the reduction in Corporation Tax. These measures will help the economy grow further, with businesses more able to expand and create more jobs.

“The economy has grown more than the US and Japan and we’re second only to Germany; the Office for Budget Responsibility has also upgraded this year’s growth outlook to two percent from 1.4. We are doing a lot better than expected.

“The combined £570m investment for research and robotics will help ensure our place as world leaders in industry.

“I also welcome the extra £2bn earmarked for social care, putting money in the hands of those who need it most.”

But the help package for the NHS was slammed by Carnforth GP and deputy chairman of the British Medical Association, Dr David Wrigley.

He said: “As suspected the budget has completely missed the opportunity to try and salvage something for the NHS & social care.

“The funding for social care still leaves it billions short of what it needs and with no additional NHS funding I truly fear for the year ahead as NHS staff are struggling to cope now.

“The NHS is in crisis across the country with waiting lists increasing, patients lying in pain on hospital corridor trolleys and social care is in meltdown. This budget goes nowhere near trying to solve this crisis. It is a missed opportunity and the government are once again failing the NHS and failing our patients.”

Tony Medcalf, tax partner at Blackpool-based chartered accountants Moore and Smalley, said it was a largely underwhelming budget for businesses.

He said: “As predicted, this was a more sober budget than in recent years. Mr Hammond focused more on the figures, than the headline grabbing policies.

“There were concessions on business rates, meaning those facing the biggest increases following the revaluation can apply for relief funding. This will be welcomed by those businesses facing the biggest increases.

“There were delays announced in the introduction of the digital tax regime for businesses under the VAT threshold, which will benefit the smallest businesses.

“On the downside for self-employed people, they are going to be paying more National Insurance Contributions, as the chancellor announced plans to bring contributions for the self-employed closer in line with employees.

“On sector support, he announced a further £270m to keep the UK at the forefront of disruptive technologies like biotech, robotic systems and driverless vehicles, which will hopefully have some benefit to the advanced industries sector in Lancashire and Cumbria.

“I think the business community will be largely underwhelmed by this budget which was light on business content, but at the same time business owners may welcome not having more government changes thrown at them.”

Babs Murphy, chief executive of the North and Western Lancashire Chamber of Commerce said: “Businesses who have been hit hardest by this year’s business rates revaluation may take some comfort thanks to the Chancellor’s decision to offer a array of intermediate reliefs.

“Our local authorities must be honour bound to use every penny of the new funding announced by the Chancellor to provide relief to the hardest-hit businesses in their areas, without any excuses and without delay.

“This short-term measure, albeit little more than a sticking plaster, will broadly be welcomed, together with promises to technical education, digital connectivity, easier R&D tax credits, and a one-year delay to digital tax reporting for the very smallest firms.

“The campaign for radical reform – and an end to punishing levels of business property tax to ensure the Treasury raises enough to fund local services – continues.

“Businesses had been advised to expect minimal change, rather than a epic Budget, and the Chancellor did not disappoint.”

Mike Cherry, national chairman at the Blackpool-based Federation of Small Businesses said: “The FSB welcomes the fact that the Chancellor has listened to the small business-led campaign on business rates.

“The £435m of new money is a direct and much-needed response to those facing astronomical hikes in their business rates. This immediate relief is vital in the short-term, and action on more frequent revaluations will also help. But this tax remains out-of-date, so today we call for a cross-party Commission to create a simple, fair tax system for a modern economy.

“Mr Hammond announced that he would take forward FSB’s proposals to help the self-employed in the benefits system. We look forward to working with him on what this may mean for maternity benefits and paternity leave.

“However, the National Insurance rise to 10 per cent next year and 11 per cent in 2019 should be seen for what it is – a £1 bn tax hike on those who set themselves up in business. This undermines the Government’s own mission for the UK to be the best place to start and grow a business, and it drives up the cost of doing business.

“Future growth of the UK’s 4.8 million-strong self-employed population is now at risk. Increasing this tax burden, effectively funded by a reduction in corporation tax over the same period, is the wrong way to go.”

See Also: Austerity forces more Blackpool job cuts