Yesterday the Chancellor delivered his Spring Statement with a positive outlook for the UK. The economy has grown for five consecutive years and continues to do so. Employment has increased by 3 million since 2010, which is the equivalent of 1,000 people finding work every day. The unemployment rate is close to a 40-year low and manufacturing has had the longest period of expansion in 50 years.
Building on the Autumn Budget, the Chancellor set out great measures for workers, business and home owners and the environment. Set out below are those measures which I believe will make a different to the lives of Amber Valley residents. If you’d like to read the Chancellor’s statement in full you can do so here.
Housing
An investment programme of at least £44 billion over the next five years was announced at Autumn Budget 2017, putting us on track to raise the supply of homes to 300,000 a year on average by the mid-2020s. Yesterday’s statement announced that this will be supported by doubling the Housing Growth Partnership to £220 million, providing financial support for small housebuilders.
To help people getting onto the housing ladder, stamp duty for first-time buyers of homes under £300,000 was abolished at Autumn Budget 2017, with buyers of properties up to £500,000 benefitting from the change. An estimated 60,000 first-time buyers have benefitted so far. I am glad that this measure is helping first-time buyers in Amber Valley and across the UK.
Workers
The Chancellor announced that in April 2018 the National Living Wage will rise to £7.83 this is worth £600 extra a year for a full-time worker. The National Minimum Wage rates for under 25s and apprentices will also rise – the largest increase in youth rates in 10 years. Over 2 million people are expected to benefit from April’s increases.
The tax-free personal allowance – the amount you earn before you start paying income tax – will rise to £11,850 from April 2018. This means that in 2018-19, a typical taxpayer will pay £1,075 less income tax than in 2010-11. 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.
Businesses
I am please the Chancellor has brought forward the next business rates revaluation to 2021.
At Autumn Budget 2017 it was announced that business rates revaluations will take place every three years, rather than every five years, following the next revaluation.
The next revaluation, currently due in 2022, will be brought forward to 2021. This will mean businesses can benefit from the change to three-year revaluations earlier, with the first taking place in 2024. These reviews are an important help the SMEs, reviewing how to help the least productive businesses catch up with the most and how to eliminate late payments to small businesses.
To read the outcome of the business rates evaluation in full please see here.
The Environment – Plastic Waste
Increasingly we hear about the damaging effects of plastic pollution on the Environment and I welcomed the Government’s recent ban on microbeads coming into force. Therefore, I am pleased to see the Chancellor is also planning to tackle plastic pollution by reducing single-use plastic waste through the tax system.
The Chancellor announced the Government’s plans to reduce the impact disposable plastics like coffee cups, plastic cutlery and foam trays have on the environment. The government is determined to take further action, and is seeking views through a call for evidence on how best to use the tax system to encourage the responsible use of plastic.
Some of the money raised from any tax changes will be used to encourage the creation of new, greener products and services. In addition, £20 million from existing budgets will be given to businesses and universities to research ways to reduce the impact of plastics on the environment.
With two local employers already producing products from recycled plastic, I welcome further support to ensure more plastic is recycled.
For more information on the tackling the plastic problem consultation see here.
Digital Economy
The chancellor also set out his plans to make sure multinational digital businesses pay a fair share of tax. Digital businesses create value in a unique way, relying on the participation and engagement of their users. However, this is not always reflected in where such multinational businesses pay tax on their profits.
The government has set out its thinking on how the tax system can change to give a fair result for digital businesses. Also opening a call for evidence on encouraging cashless and digital payments, while ensuring cash remains available to those who need it. Digital technology has changed the way people shop, sell, and save. While cash will continue to be an important method of payment, more people are moving towards digital payments every year.
The government is seeking views on what more it can do to support people and businesses who use digital payments, ensure that those who need to are able to pay with cash and prevent the use of cash to evade tax and launder money.
The Cash and Digital Payments in the New Economy Consultation can be accessed here.
Digital Connectivity
Another aspect to the new technology in our economy is the high-speed broadband it depends upon. In the Spring Statement, the Chancellor announced the first wave of funding allocated to help roll out high-speed broadband to local areas, as part of the £190m Challenge Fund. About £95m has been allocated to 13 areas across the UK and will help to provide fast, reliable broadband to homes and businesses. The Chancellor also confirmed £25 million for the first 5G testbeds.
Skills
As the economy changes, it is important to ensure people have the skills they need to seize the opportunities ahead. To do this, the Chancellor announced £500 million a year for T-Levels, the most ambitious post-16 reforms in 70 years. Additionally, from next month £50 million will be available to help employers prepare for the rollout of T-Level work placements.
The Government has committed to delivering 3 million apprenticeship starts by 2020 with the support of business through the apprenticeship levy. In order to combat challenges of the new
system faced by some small businesses looking to employ an apprentice, the Chancellor announced £80 million of funding to support those small businesses in engaging an apprentice. I am glad this measure will assist small businesses, encouraging them to take on apprentices and creating opportunities for people to gain these important skills.
Overall I am glad to hear that the UK’s public finances have reached a turning point, with borrowing down and the first sustained fall in debt for 17 years. Although the UK’s debt remains too high, equal to around £65,000 per household; I support the Chancellor’s balanced approach that not every available penny must be used to reduce the deficit, nor should every available penny be spent immediately. The £60 billion of new spending committed by the Chancellor since the Autumn Statement 2016, has been shared between long-term investment in Britain’s future and support for our public services. It is great that almost £9 billion extra has gone into the NHS with £4bn going into the NHS in 2018/19 alone. But the NHS needs as much more money as we can give it and so I share the Chancellor’s enthusiasm that management and Unions can reach an agreement on a pay modernisation deal for our nation’s Nurses and Agenda for Change staff.