WITH the benefit of a week to consider the Budget, I think the Chancellor did a good job in balancing two objectives: bringing down the deficit while investing in the UK economy.
We may have been distracted by other issues such as leaving the EU, but tackling this country’s debt – the total amount owed by the Government - is still vitally important. It is simply too high.
The UK’s credit card bill, while by no means maxed out, is £1.7 trillion which represents £65,000 per household. Just meeting the interest payments on that bill next year will cost us £41 billion and that is more than the £35 billion we spend annually on police or transport.
Key to this is bringing down the deficit – that’s the annual difference between what the government spends and its income – and Mr Hammond was able to announce that the deficit will come down steadily over the next five years to its lowest level in 20 years.
These mind-boggling numbers matter because ultimately controlling our debt is the only sustainable way to pay for the quality public services we all want.
Despite a challenging economic outlook, the Chancellor was able to maintain the Government’s commitment to this principle while also introducing a series of measures to boost economic prospects and protect public services.
Two of the biggest relate to housebuilding and the health service.
More than £15 billion has been set aside for to support new house building over the next five years. This includes £1.2 billion for the government to buy land to build more homes, and £2.7 billion for infrastructure that will support housing. Abolishing Stamp Duty tax for first time buyers will help those struggling to get on the housing ladder.
Also, changes to the planning system will encourage better use of land in cities and towns. This means more homes can be built while protecting the green belt and our most precious landscapes.
Our NHS will get an additional £6.3 billion – that’s £3.5 billion for upgrading buildings and better care and £2.8 billion towards improving A&E performance, reducing waiting times for patients, and treating more people this winter.
Household budgets will benefit from the rise in income tax thresholds, the increases in the National Living Wage and the National Minimum Wage and the freezes on fuel and alcohol duties.
Pubs will also benefit from the extension of the £1,000 business rates discount and, along with other enterprises, they will benefit from the linking of rates increases to the (typically lower) Consumer Prices Index rather than the Retail Prices Index.
There was a whole raft of measures designed to make the economy work better – fit for the future as the Chancellor put it.
These include the incentives for maths teaching in our schools, £64 million to retrain people in digital and construction skills and £2.5 billion to encourage investment in the fledgling businesses that will drive the economy in the future but who often struggle to source the money they needed to grow.
Finally, the Chancellor also found £300 million for HMRC to hire staff and invest in technology to clampdown on tax evasion and avoidance. It is expected to bring in an extra £4.8 billion into the Treasury’s coffers over the next few years. That’s good housekeeping.