“Britain is at the forefront of the new technology revolution. . . We must also embrace change,” said the chancellor today, in the budget. But did he practice what he preached?
So, The Offce of Budget Responsibility has downgraded its projection for growth in productivity, it expects a miserly 1.5 per cent growth this year, an even weaker 1.3 per cent expansion next, and weak growth the year after too, these are poor numbers.
To do better, the UK needs more investment, begetting higher growth in productivity, leading to higher wages and higher growth in GDP.
“A new tech business is founded in the UK every hour, but I want this to happen every half an hour,” he said. And announced measures to support investment in AI, electric cars and self-driving cars.
He also announced an investment in air - no, not hot air, but polluted air. He announced green budget measures, investing in creating cleaner air to breath, and to try and reduce plastic use, clogging the ocean, a threat to sea-life, maybe eventually a threat to our diet.
Rapid technological change means we need to help people re-train. He announced a national re-training scheme, with an initial £31 million to support teaching digital skills.
He also talked about a new £1.7 billion fund for backing the northern powerhouse. And £1 billion of discounted funding for local councils investing in infrastructure.
He made the claim that income inequality is at a 30-year low. This may be right, but this is not the problem, wealth inequality is what needs to be reduced.
“House prices are increasingly out of reach for many,” he said. Hammond revealed plans to free up land, and support what he calls the SME housing sector, and train more workers in construction. He revealed £44 billion in funding, loans and guarantees over the next five years, creating 300,000 new homes a year by the mid-2020s. He also promised reform of planning rules, building ‘high quality’ homes in city centres and not green belt. He also promised to intervene if land is being held for commercial use, including compulsory purchase.
Hammond announced plans for five new towns, including up to a million homes in the Milton Keynes, Oxford and Cambridge corridor.
Finally on the subject of property. He said he was to abolish stamp duty on all homes worth less than £300,000 for first time buyers. But in more expensive areas, £300,000 on the first £500,000.
But what about entrepreneurs, and indeed small businesses, although they are not always the same thing? He reformed business rates.
Then he turned to digitalisation and taxation - the issue of companies avoiding taxation. Mr Hammond has made a reform, more symbolic then likely to make a huge change, but digital companies selling product in the UK, but posting profits abroad, will pay some ‘income tax’ on revenue.
Jeremy Cook, Chief Economist at WorldFirst said: "We are of the belief that Brexit and the performance of the UK economy will live and die via investment and trade. Today’s announcements have done little to assuage our fears on the first while we wait on progress on the second.”
Peninsula Employment Law Director Alan Price commented: "In the first November Budget for 21 years, Chancellor Phillip Hammond set out a number of initiatives that will affect employers.
"The Chancellor confirmed National Living Wage will increase from £7.50 to £7.83 per hour from April 2018. All rates of the National Minimum Wage will also increase from next April, in line with the Low Pay Commission’s recommendations. This early confirmation ensures employers have sufficient time to plan for the wage increases, both financially and administratively. Following an increased focus on enforcement in this area, failing to pass on these increases puts employers at risk of being publicly named and shamed or facing financial penalties. Even a one day delay will create liability.
"Further focus was also given to providing skilled workers for businesses. The government is launching a National Retraining Scheme which will provide workers with the opportunity to re-train during their working lives, ensuring they have the skills for future workplaces. They have also reiterated the commitment to have 3 million apprenticeship starts by 2020 whilst announcing they will review the flexibility that employers have to spend their apprentice levy payments. This could potentially increase the time employers have to spend the levy, or allow more flexibility for group organisations to share their payments, to ensure organisations who pay the levy can spend it in a way that benefits their workforce."
