Yesterday, the Chancellor of the Exchequer announced his 2017 Budget, where he outlined his spending and fiscal plans to Parliament, introducing great measures for workers, savers, drivers and business owners in Amber Valley, and not to mention further support for infrastructure and investment in the Midlands more broadly. I welcome the message and direction of the budget which shows a sensible evolution of Government policy and also welcome the fact that the economic growth is higher than forecast and is expected to grow by 2% in 2017.
There were some very welcome measures announced in yesterday’s Budget and I have outlined below the measures which I believe will make a different to the lives of Amber Valley residents. If you’d like to read the Chancellor’s 2016 Budget you can do so here, I also had the opportunity to speak in the Budget debate in the House of Commons, the full text of which you can read here.
Support for Workers – Rise in Personal Tax Allowance
The government is committed to raising living standards. It has taken action to help more people into work and to enable individuals to keep more of what they earn. From April 2017, the personal allowance will rise to £11,500, over 75% higher than in 2010. This will take 1.3 million people out of income tax altogether, compared to the beginning of this Parliament.
I welcome this measure for the middle-income earners in my constituency, taking those who should never have been caught by this rate of tax, out of this bracket. This is especially important for families with one earner who fall in that band who should never have done.
Support for Working Parents
The government will shortly be rolling out Tax-Free Childcare for working families with children under 12, providing up to £2,000 a year for each child to help with childcare costs. From September 2017, the free childcare offer will double, from 15 to 30 hours a week for working families with 3 and 4 year olds in England, in total worth up to £5,000 for each child.
Furthermore, parents will be able to receive up to £4,000 for disabled children up to the age of 17. I welcome these measures which provide support for hard working parents and families as these impact on everyday incomes which contribute to the surplus income of households rising each year.
Business Owners – Business Rate Mitigation
I also welcome the news that £435 million will be used to support businesses affected by the business rates relief revaluation. This means no small business that is coming out of small business rates relief will pay more than £600 more in business rates this year than they did in 2016-17.
Funding for local authorities will allow them to provide £300 million of discretionary relief to provide help to businesses most affected by the revaluation.
Although it is a shame that the Beer Duty freeze has stopped I welcome the news that from April 2017, pubs with a rateable value up to £100,000 will be able to claim a £1,000 business rates discount for one year.
Support for the Midlands
I welcome the Chancellor’s support for the region and look forward to reading the Government’s Midlands Engine Strategy which will be published shortly. Whilst this aims to provide extra support to the region and help remove productivity barriers across the Midlands, I hope that the East Midlands receives a fair proportion of this funding.
Drivers – Important Transport Infrastructure Investment
Following on from the Autumn Statement announcement that Fuel Duty has been frozen for the seventh successive year, the Chancellor gave further support to motorists yesterday, announcing his plans to improve transport with the National Productivity Investment Fund (NPIF). The government funding improvements to transport infrastructure, include £690 million for new local transport projects, to improve congestion on roads and public transport. A further £23 million will be going to the Midlands to improve congestion points on national roads.
Technical Skills Investment
I am pleased to welcome the Chancellors plans to invest in technical education for 16 to 19 year olds. This investment of over £500 million is very important to Amber Valley as it will help to raise the quality and esteem of technical education and encourage young people into these jobs.
New T-levels for 16 to 19 year old technical students will be introduced from autumn 2019. Students will be able to choose from 15 different routes such as construction, digital or agriculture. The government will also provide maintenance loans for students doing higher-level technical courses at National Colleges and Institutes of Technology – like those available to university students.
Health and Social Care Support
I welcome the Chancellor’s focus on health and social care, promising £2 billion for adult social care over the next three years. This will help councils to provide high quality social care to more people and help to ease pressure on the NHS. Although this is not a long term solution it is a welcome step until such a longer term solution can be found.
Furthermore I also am pleased the Chancellor announced a £425 million investment in the NHS in the next three years, £325 million will be invested in a first set of the best local Sustainability and Transformation Plans (STPs). STPs are the NHS’s plans for improving patient services in local regions, developed collaboratively by NHS service leaders and their local partners. This is a most encourageable step as capital funding is needed to allow the plans the chance to make the changes and improvements they propose.
£100 million will go to A&E departments in 2017-18, to help them manage demand ahead of next winter, and help patients get to primary care faster. For example, it will provide more on-site GP facilities and more space in A&E units for assessment of patients when they arrive.
Internet users – Important Infrastructure Improvement
The Chancellor provided reassurance that the Government is committed to investing in digital infrastructure with a new strategy to make the UK a world leader in 5G technology, promising £16 million for a national 5G Innovation Network to trial new 5G technology.
The chancellor also announced £200 million for local projects to build fast and reliable full-fibre broadband networks which will help local businesses who reply on a good internet connection.
Small Businesses – Making Tax Digital
I am glad Small Businesses and landlords under the VAT threshold will have an extra year to prepare for Making Tax Digital (MTD) as this will allow them time to implement the changes, though I do still believe it should be a voluntary opt-in.
Unincorporated businesses (businesses owned privately by one or more people) that have an annual turnover below the VAT registration threshold will have until April 2019 to prepare before MTD becomes mandatory. Under MTD, businesses will use digital software to keep tax records and update HMRC quarterly.
Tackling Tax Avoidance
I also welcome the Chancellor’s focus on tackling tax avoidance, an issue which I have campaigned on in Parliament. It’s important that the Government introduces measures that will restore public confidence and from July a tough new financial penalty for professionals who enable a tax avoidance arrangement that is later defeated by HMRC will be introduced. This alongside other measures will raise £820 million over the forecast period.
Schools – Funding for Free Schools and Existing School Maintenance
Although I welcome extra funding for schools, I hope the £536 million promised for new free schools and to maintain existing schools will be distributed in such a way as to benefit the schools in Amber Valley which need the financial assistance and it is an issue I will follow closely.
The Self Employed – National Insurance
The main rate of National Insurance contributions (NICs) for the self-employed will increase Currently, the self-employed may have to pay both Class 4 and Class 2 NICs:
Class 4 NICs at 9% are paid on profits between £8,060 and £43,000
Class 2 NICs are paid on profits of £5,965 or more
From 2018, Class 2 NICs will be abolished. Class 4 NICs will rise to 10% in April 2018 and to 11% in April 2019. Taken together, only a self-employed person with profits over £16,250 will have to pay more as a result of these changes.
Whilst this better reflects the fact that the differences in contributory benefit entitlement between the self-employed and employees are now small, following the introduction of the new State Pension in April 2016; I understand it is unwelcome news for those struggling and who feel they are not getting the rights they want.
We do need to ensure that employers who are disguising employment to avoid tax are prevented from doing so but we also need to ensure that the genuine self-employed are not unduly disadvantaged.