Budget 2018: The key announcements

Budget 2018: The key announcements

Sunday, October 28, 2018

Among the announcements expected in this year’s Budget are cuts to business rates for small retailers, extra money to fix Britain’s roads and no-interest loans for people struggling with debts.

But this Budget, which Chancellor Philip Hammond will deliver at 3.30pm on Monday, comes under the shadow of Brexit.

Below, we detail some of the key announcements, and how Brexit could affect those plans.

 

Ending austerity could depend on deal with Brussels

Mr Hammond told Sky News’ Sophy Ridge that spending plans may have to change if no Brexit deal is reached.

He said it was “extremely unlikely” that there wouldn’t be a deal, but if that scenario arose, the government would have to take a “different approach” to the economy.

He hinted to Andrew Marr that austerity could only end if a deal was reached, saying: “"Once we get a good deal with the EU and a smooth exit from the EU we will be able to show the British people that the fruits of their hard work are now at last in sight.”

He also expressed support for the Chequers plan, saying it would “minimise” any negative economic consequences of Brexit.

 

Mental health

Mr Hammond is expected to announce a £2 billion funding injection to the NHS for mental health services. Critics say this amount should be treated with caution, as the £2 billion is part of the funding announced by Theresa May in June. 

In summer the Prime Minister announced an extra £20 billion a week for the NHS by 2023 to improve services. 

 

Broadband improvements

The Sunday Telegraph reported that a £250 million fund will be announced to improve broadband access in rural areas, giving them access to “full fibre” networks.

 

Crackdown on tech tax evaders

Despite calls from some economists to keep corporation tax low to make the UK an attractive business prospect post-Brexit, Mr Hammond is thought to be planning higher taxes for tech companies dependent on international agreement.

This year, Amazon’s tax bill halved to £4.5 million despite seeing its profits triple, and Mr Hammond said the British public felt it was “simply unfair.

 

No-interest loans

A no-interest loan scheme will be explored for people on low incomes who are struggling to repay debt.

The Treasury announced that the government would “explore ways to partner with debt charities” after a similar scheme in Australia was met with success. It would be designed as an alternative to high-interest payday loans.

The ‘breathing space’ period for people in debt to get their finances in order is currently six weeks, and the Chancellor is expected to announce proposals to increase it to 60 days.

 

Local routes and businesses

A £28.8 billion fund, taken from vehicle excise duty, to improve large roads, build new ones and improve connections is expected to be announced, as well as £420 million of funding to fix potholes.

The money will be allocated to local councils to improve thoroughfares, and comes in addition to the annual £1 billion highways maintenance budget and £300 million pothole fund.

In addition, local high streets can expect a cut to business rates of a third for small retailers.

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