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John Penrose: The conventional wisdom about this leadership election is wrong. Hunt’s spending plans are neither unaffordable nor irresponsible.

John Penrose is MP for Weston-super-Mare and a Northern Ireland Office Minister.

If you listen to the sober-sided, serious economists at the Institute for Fiscal Studies, or to the Chancellor Philip Hammond himself, you’d think the Conservative leadership election is a horrible bidding war of doolally spending promises from Jeremy Hunt and Boris Johnson. Has the party of sound money lost its soul? Betrayed its heritage? Are Margaret Thatcher and Milton Friedman spinning in their graves as leadership contenders try to out-Corbyn each other with unaffordable spending promises?

Well no, not really. I can’t speak for Boris Johnson but, as someone who’s been involved in a lot of Jeremy Hunt’s policy development work, that’s not what we’re doing at all.

Let’s start with the charge that, if it was right to introduce austerity in 2010, we should do the same for Brexit in 2019. Otherwise we aren’t being consistent.

But the problem in 2019 isn’t the same as 2010. Brexit isn’t the banking crisis, thank goodness. And if the problem is different, the answers should be too.

By 2010, Gordon Brown was trying to keep the economy going with huge increases in public spending, paid for with ballooning debt. Something like one pound in every four the Government spent had to be borrowed, to be repaid by taxpayers later. If we’d carried on like that, pretty soon the country’s credit card would have been snipped up and the bailiffs would have been knocking at the door. So we simply had to throttle back, to stop spending money we hadn’t got.

But today is different. Public spending isn’t ballooning and borrowing is under control. We’re living within our means, and there’s even headroom for a bit more spending if we’re careful. We’ve come a long way, and it hasn’t been easy. You can understand why Hammond doesn’t want the next Prime Minister to blow it.

What are today’s problems, if they’re different from 2010? The biggest is that some – although certainly not all – firms are putting off growth-creating investments until after the Brexit fog has cleared. And that no-one knows whether our trade with the EU will be easy or awful once we’ve left.

So it makes sense to spend a bit of money to promote economic growth. Post-Brexit Britain needs a stronger, more dynamic, more energetic, turbocharged economy, so we’re prepared for the challenges of life outside the EU. And Jeremy Hunt’s plans to cut corporation tax to 12 and a half per cent, increase investment allowances and exempt small high street firms from business rates would do exactly that. They would spark economic renewal and investment in UKplc, making us more resilient in economic shocks and recessions, and more productive and efficient so we can grow faster too.

In other words, it’s OK to use different answers in 2019 than in 2010. But what about the charge that we’re making the same mistake as Brown, by spending and borrowing unaffordably?

Hunt is on pretty firm ground here, because he agrees we’ve got to keep the national debt falling relative to the size of our economy. That means borrowing can’t balloon, and we’ll always be able to repay our debts. And his business career helps here too, because his plans to turbocharge post-Brexit Britain’s economy would mean we’d be investing to grow. They’re sensible investments in our economic future, not pale copies of unworkable, hard-left Corbynomic plans.

Nor is he expecting to do everything at once. We’d need to raise defence spending progressively over five years, for example, to allow time to plan. Otherwise you’d simply waste money on the wrong things.

The same goes for fixing illiteracy. That will take ten years, building on the huge progress over the last decade that has seen more pupils being taught in good or outstanding schools than ever before.

And some of the plans would only be temporary, too. The pledge to help farmers adjust to a post-Brexit world has to be a hard-headed, short term plan to help re-equip machinery, buildings and breeding for new global markets, for example. Not a woolly, open-ended subsidy.

The plans have got to be about changing things, so we’re ready for a new world. Not expensively preserving the way they were before we voted to leave. Transformation and preparation, not status quo. But, for Hunt’s proposals at least, they are sound, practical, affordable ideas. And, most important of all, they’re thoroughly Conservative too.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Sam Gyimah: My challenge to Johnson and Hunt. It’s time to commit to scrapping Britain’s five worst taxes.

Sam Gyimah is MP for East Surrey, and is a former Universities Minister.

For nine years austerity and its consequences has dominated our debate and become the new normal. I am proud of what my party has done in rescuing the country’s finances.

But 1.5 per cent growth is not good enough. Economic growth creates better jobs, improves people’s standards of living, enables us to adequately fund public services, and gives people a reason to buy in to capitalism. If we are to solve the challenges that we face — social care funding, a well-funded NHS and an education system that gives everyone a great start in life, we need growth to do it.

I have not seen any candidate in the leadership contest put forward a plan that is going to address this – I want whomever triumphs as the next leader of our Party and Prime Minister to consider my tax plan as a way to turbocharge our economy.

Governments have got into the habit of raising taxes and introducing new ones. I want to change our debate around tax from introducing new taxes to cutting the worst ones.

That’s why we need to abolish Britain’s first worst taxes – the those that do the most damage for the money they raise, and whose abolition will get us the most bang for our buck:

1.      Make the Annual Investment Allowance unlimited.

2.      Index the tax thresholds to inflation – permanently.

3.      Replace business rates with a commercial land tax.

4.      Eliminate the personal allowance withdrawal for higher earners.

5.      Move towards abolishing stamp duty for homes under £1 million.

Make the Annual Investment Allowance unlimited

We were right to bring Corporation Tax down from 28 per cent to 19 per cent. It’s made investing in Britain more attractive – the fact that McDonald’s, Starbucks and Snapchat have moved their European headquarters to London is evidence of that.

But we need to look beyond the headline rate. When businesses invest in new equipment, machines, and industrial buildings, they’re forced to deduct the investment at an arbitrary rate over a number of years, and because of inflation they cannot claim back the true amount. That’s not the case for ordinary day-to-day expenses like pens and paper. That’s a problem because if you’ve ever run a business, as I have, you know that cash is king. I want to fix this and ensure a level-playing field in the tax system between manufacturers and financial services.

That’s why we need to make the Annual Investment Allowance unlimited. This will level the playing field and fix corporation tax so that it is a tax on profits only, not investment. This follows similar moves in the United States, and academic research suggests it has boosted business investment by 17.5 percent where it has been done. This would be a tremendous boost to business across the country, especially manufacturers.

Index the tax thresholds to inflation – permanently

In 1988, when the 40p tax rate was introduced, around 5 per cent of taxpayers paid it. Today, closer to 15 per cent of taxpayers do. A similar effect takes place in the other tax bands. The reason is that every year, inflation pushes more and more people into higher rates of tax, without them being any better off.

This discourages work and hits workers with a stealth tax. And it means that, every year, we are effectively raising taxes on people without a proper debate in Parliament. If we permanently index the tax thresholds to inflation, we can eliminate this stealth tax on work and stop the endless creeping down of these higher rates of tax.

Replace business rates with a commercial land tax

Because Business Rates are levied on a property’s value and not just the land beneath it, they act as a punishing disincentive to investment.

The worst affected businesses are manufacturers. Tata Steel’s rates bill rose by £400,000 a year when it rebuilt the blast furnace at Port Talbot. No wonder British Steel is struggling. Despite what the likes of Jeremy Corbyn and Nigel Farage say, the answer isn’t nationalisation of these industries. It’s modernising the tax system so they don’t get punished when they invest.

The next Leader must replace business rates with a tax on commercial land, paid by the landlords and levied only on the land value itself, so that no business is worse off if they invest and landlords do not have an incentive to keep commercial properties vacant.

Eliminate the personal allowance withdrawal for higher earners

Withdrawing the personal allowance for people earning over £100,000 creates a massive tax cliff-edge. It means that people earning between £100,000 and £125,000 face a 60 per cent marginal income tax rate, meaning they take home just 40p for every pound they earn (and just 38p after National Insurance).

That is madness. Back in 1988, Nigel Lawson was right to cut the upper rate of tax from 60p to 40p. We need to do it again.

Move towards abolishing stamp duty for homes under £1 million

Stamp duty has been described by the Institute for Fiscal Studies one of the UK’s worst-designed taxes. It discourages elderly people from downsizing and freeing up their homes for younger families, and stops people from moving homes for better jobs. Just this week the Resolution Foundation highlighted the economic damage caused by high housing costs trapping people in areas with weak work opportunities. A study of a similar tax in Australia found that it lowered GDP by 72p for every pound it raised.

We need to start the process of scrapping Stamp Duty altogether on homes under £1 million. This would eliminate stamp duty for 98 per cent of housing transactions, but forgo only 68 per cent of the tax receipts, at a cost of £6 billion. Alongside wider reforms to cut the cost of housing, this tax could be made cost neutral.

– – –

It’s not good enough to propose big, attention-grabbing tax cuts that would cost tens of billions without doing much to boost growth. We have limited resources, but there’s still a lot we can do if we’re smart about it.

There have been big debates among Conservatives about getting left behind voters and young people to buy into capitalism. But so much of that debate has conceded the Left’s critique of capitalism. Capitalism has its flaws, but it is the only thing that can give people the opportunities and standards of living that they want and deserve.

For the Conservatives to win over the voters we’ve lost to other parties, we need to rediscover our core values of work, enterprise and aspiration. We need to focus on using tax cuts to unlock growth, to create better jobs and more opportunities in life for young people and people who have been left behind. We can’t just offer voters more of the same: we need to make Britain boom again.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Alan Mak: Conservatism 4.0 – We must ensure that no-one is left behind by the Fourth Industrial Revolution

Alan Mak is MP for Havant and Founding Chairman of the All-Party Parliamentary Group on the Fourth Industrial Revolution.

Stanley Baldwin said the Conservative Party stood for “real England” – a Party defined by voluntary organisations and Christian patriotism, little platoons and big national causes.

His Conservative Party of the 1920s faced an upstart opposition in a Labour Party that had usurped the Liberals to become the second party of British politics. Outlining the growing threat from Labour, Baldwin described them as being for a nation of class divisions and over-mighty trade unions.

Under Jeremy Corbyn, Labour has come full circle and is once again challenging the success and legitimacy of our free-market economy.

A century on from Baldwin, and despite being the natural party of government, our Party has often struggled to break out from its vote base of shire counties and market towns. It’s over 30 years since we won a majority of over 21 at a general election.

But there are signs of change. Our electoral success in recent years has been driven by securing more votes in Labour’s industrial heartlands. Dudley, Mansfield, Copeland and Teesside have all elected Conservatives in recent years, whilst the West Midlands and Tees Valley have elected Conservative Mayors on a region-wide basis.

This Conservative momentum in areas once dominated by trade unions and the Old Left shows that our message of hope, personal freedom and low taxation can re-define our path to a majority.

Yet our progress in these Labour heartlands is not concrete and shouldn’t be taken for granted. A pro-Leave electorate that has trusted another party for so long will be looking to the Conservatives to not only deliver Brexit, but ensure they are not left behind by the next big technological revolution either. As I said in yesterday’s article, this commitment must be a central tenant of Conservatism 4.0 – Conservative ideology for the Fourth Industrial Revolution [4IR].

The last time our country went through a technological revolution we had a strong leader with a firm ideology. The computing revolution of the 1980s powered Britain to economic success – and political success for Thatcherism. Through deregulation and an unwavering belief in the free market, the City of London prospered from the Big Bang, and our economy was transformed into a services-based powerhouse. From the stuttering, strike-crippled, state-dominated closed market that Thatcher inherited, the foundations were laid for rapid economic growth and the business-friendly, pro-innovation environment we enjoy today.

Our next Leader will also find themselves at an inflection point. They will have to harness the Fourth Industrial Revolution (4IR) as artificial intelligence, big data and automation change our economy and society beyond recognition – and ensure that every community and region benefits from the wealth that it creates. Whilst Margaret Thatcher’s transformation of Britain’s economy for the better is undeniable, there are mining and industrial communities who felt they were left behind as other parts of the country raced ahead. To win a majority at future elections, today’s Conservatives need to attract working class and northern votes, so we cannot allow the positive impact of the 4IR to be absent from any region or for its benefits to be inaccessible to any social group.

The 4IR will radically change how we work, regardless of sector or industry. Instead of dockers and miners being at risk of automation, in the near future it will be call centre operators, lorry drivers and factory workers. With a path to electoral victory that increasingly runs through industrial towns, every factory closure or job lost to robots without alternatives emerging, will make a majority harder to achieve for our next leader.

That’s the reason why, whilst we still have an opportunity to shape the 4IR, our policies must be focussed on creating an Opportunity Society centred around social mobility powered by lifelong learning, high-quality education and skills training for everyone at every stage of their lives. Our Opportunity Society must be more than just a short-term policy objective. It has to be an integral part of the future of capitalism and a key part of Conservatism 4.0.

As robots slowly replace human workers, many on the radical-left are arguing for a Universal Basic Income (UBI), a minimum wage paid by the Government to every citizen regardless of their productive capacity. Every single country that has trialled UBI – from Kenya to Finland – has found it expensive and ineffective. Research by the International Labour Office has estimated that average costs would be equivalent to 20-30 per cent of GDP in most countries. In Britain, this would be more than double the annual budget of the NHS, yet John McDonell says a Corbyn-led Labour Govnement would trial it. These are just two of the reasons why we Conservatives should reject UBI as the solution to growing automation in the 4IR.

The truth is work has always paid, and work for humans will always exist. Work drives our economy, multiplies and makes the world richer. It takes people out of poverty and gives them purpose, and this will continue to be the case in the 4IR. In fact, many more new jobs are likely to be created than are lost to robots because the technology of the 4IR will drive economic growth, which in turn will create new and more interesting jobs, especially in new tech sectors such as advanced manufacturing, 3D printing, precision medicines and AI-powered creative industries.

Not enough is made of our job creation miracle since 2010, which has seen our economy put on three million new jobs. As we enjoy the lowest unemployment rates since the 1970s, we need to re-emphasise the value of work and the benefits to be derived from a good job. A UBI would be defeatist, signifying that humans had ceased to be useful in a world of machines, and be the antithesis of social mobility – there would be no need to work hard to move upwards on the income and living standards scale if we are all paid to stay at the same level. A UBI would also stall our economy through either crippling debt on the public purse or new taxes imposed on innovation. Similarly, Jeremy Corbyn’s proposed Robot Tax would simply mean a left behind country – a nation that fails to attract foreign investment and which becomes known for its anti-innovation approach to technology.

Instead, true devolution must be at the heart of delivering an Opportunity Society and making sure no community or individual is left behind. Our next Prime Minister must invest in the Northern Powerhouse and Midlands Engine so regional economic growth is put in the hands of regional leaders. The benefits of the 4IR, from new start-ups to overseas investment, must be enjoyed beyond the “Golden Triangle” of London, Oxford and Cambridge. As Juergen Maier who led the Government’s Made Smarter Review, argued, it’s about creating an “innovation climate” in regions such as the North.

We cannot expect the heavy industries of the past to return, but instead our focus should be on ensuring the new technologies of the future are exploited in every area of the country to create new jobs and rising skills levels in every community. The Liverpool City Region understand this, and have already taken the initiative. They have launched LCR 4.0, an ambitious plan to support manufacturing and advanced engineering organisations in the region by funding practical support to transform businesses through digital innovation. By helping traditional manufacturers upgrade their technology, they enable firms to stay in business and keep their workers employed by becoming more productive. Conservatism 4.0 should support more initiatives like this.

Moving towards a system of local business rates retention will also encourage further investment in skills and business support from local authorities as they reap the rewards of encouraging local growth. There should also be more scope for local taxation and decentralisation as a central tenet of Conservatism 4.0 to empower local areas to evaluate their workforces and set-up true long-term strategies for delivering local economic growth, building on the work of existing Local Enterprise Partnerships and new Local Industrial Strategies.

Conservatism has always evolved and must do so again as we enter a new technological age by putting social mobility and reginal devolution centre stage. They are the two key building blocks to ensuring that every community and region can benefit from technology-driven economic growth. While Thatcherism delivered for the Third Industrial Revolution, we need a new brand of Conservatism to build an Opportunity Society for the Fourth. My final article in this series, published tomorrow, will set out the four principles that should guide us as we re-calibrate Conservatism in the Fourth Industrial Revolution.

This article is the second in a three-part series explaining why adapting to a society and economy shaped by technology is key.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

We have twice as many shops as we need

Timpson is a retail chain with over 2,000 shops. Therefore Sir John Timpson, the firm’s Chairman, was a good choice by the Government to investigate the challenges facing our high streets. The Town Centres Expert Panel, led by Sir John, has published its report and recommendations. The Government had already agreed to spend £675 million on a Future High Streets Fund and Town Centre Taskforce.

The panel can have any amount of expertise. But it does not consist of magicians. Sir John acknowledges the realities:

“Across the country, we have seen the changes facing our high streets and town centres due to the changing nature of retail. Town centres are evolving and retail will not return to the high streets that existed 10 or 20 years ago. A combination of internet shopping, the convenience of out of town retailing and an exceptional number of well-established retail formats reaching the end of their commercial life cycle, has led to a marked increase in empty shops and a decline in footfall.”

Sir John told the BBC that we have “about twice as many shops as we need.” Furthermore, demand is still falling. The only shred of encouragement from the Springboard reports is that the rate at which it is falling might have slowed. Rather than footfall being down three per cent a quarter, it’s now declining by 1.5 per cent a quarter. But if the shopkeepers are already struggling to make a profit then it is not much encouragement to say that their number of customers is going down by six per cent a year, rather than 12 per cent.

But before we all get too gloomy there is a most welcome opportunity in us having too many shops. Turn some of the shops into homes. Even the experts have spotted it:

“We have more shops than we need and are short of housing in many parts of the country. It seems to us obvious that part of the retail estate should be converted into residential property where there is housing shortage.”

A huge barrier to achieving this is the planning process. Increasing the housing supply is not just about new buildings. Change of use to housing should be actively encouraged, rather than prohibited. The Government is consulting on making some changes. The report makes the following mild comments:

“Planning provides key tools to enable local communities to shape and deliver their high streets agenda which when used wisely can bring great benefit. The Task Force should encourage action that can make planning decisions simpler, quicker and more aligned to local strategies. We welcome the announcements at Budget of two consultations in respect of planning for town centres. However, we think there is more to do which is why we recommend that the Task Force plays a role in boosting local authority capacity to enable planning to support local areas and stakeholders to design effective and innovative high street and town centre strategies.”

Making it easier to have flats above shops – which I wrote about a year ago – would also help.

So far as the Future High Streets Fund is concerned, the report calls for a “localist” approach to how it is spent:

“There should not be a ‘one size fits all’ list of characteristics in places to fund, as each town has an individual requirement. The types of things that the fund should fund encompasses a number of factors. These could include helping places to improve space management and transport links. Adapting for the future also includes engaging with communities and giving local people, groups and businesses the agency to play an active role in shaping their local places. This can help ensure proposals meet their future needs and changing uses to ensure appropriate local balances between different uses to meet these needs.”

It also adds that the ability to attract co-funding from commercial sources would be a good indicator that value for money has been achieved.

Parking is one routine difficulty for many customers. Perhaps some of the funds could go on reviewing such arrangements – to see if restrictions could be eased and additional parking spaces be provided.

My hunch is that if the Government has a spare £675 million sloshing around, it should be used to cut Business Rates on small shops, cafes and pubs.

With regard to empty shops it says:

“Empty shops can be depressing eyesores that drag down shopping areas. It can be hard for local stakeholders to know who owns these properties, and we would like to see further detail on the announcement at Budget 2018 to pilot a register of empty properties in selected local authorities. Local authorities should use their initiative to encourage landlords and tenants to think innovatively about how to use empty properties. If a deal can’t be struck at the market rent, special terms should be offered to community businesses or other traders with social purpose. The announcement to pilot an “Open Doors” brokerage approach matching landlords of empty properties with community groups looking for space was welcome, and we would like to see this go further across the country and sustained over time. The Task Force could disseminate best practice and learning from the pilot.”

That is reasonable so far as it goes. There will be practical reasons why residential use will not always be viable however much the planning rules are liberalised. But, of course, the real answer is for the market to function properly.

Christmas Eve is a wonderful time for the high street. It’s much too late to rely on the internet for all those last minute presents. Yet during the rest of the year the tills are falling silent for much of the time. Sir John, and his fellow experts, have been honest about the astonishing scale of the mismatch in how our buildings are being used. However, I fear they have been too diplomatic in challenging the Government to make a bold response on an equivalent scale.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

“Under this Conservative Government austerity is coming to an end – but discipline will remain.” – Hammond’s Budget speech, full text

“Today, I present to the House a Budget for Britain’s future;

A budget that shows the perseverance of the British people finally paying off…

A Budget for hard working families…who live their lives far from this place…and care little for the twists and turns of Westminster politics.

People who get up early in the morning…to open up factories, shops, and building sites…to drop their kids off at school…to check on elderly relatives and neighbours.

The strivers, the grafters and the carers who are the backbone of our communities and our economy.

People who ask only of Government that we protect the jobs that put food on their table…that we deliver the public services their families rely on…and that we do it efficiently, minimising the amount of tax we need to take from their hard-earned wages.

People, Mr Deputy Speaker, who we, on this side of the House, are proud to represent.

So I say to them:

This Budget is unashamedly for you.

Mr Deputy Speaker,

The British people put their faith in us to do the job…and today we repay that trust with a Budget that paves the way for a brighter future.

And, Mr Deputy Speaker, let me be clear why:

The tough decisions of the past eight years were not driven by ideology…

Mr Deputy Speaker…they were driven by necessity;

Driven by the failure of the Party Opposite in Government, which led to……our deficit soaring to a post-war record…and our economy suffering the deepest recession since the Second World War.

That, Mr Deputy Speaker, was our inheritance.

And, as ever, we did what needed to be done.

Now we have reached a defining moment on this, long, hard journey.

Opening a new chapter in our country’s economic history.

Where we can look confidently to the future…and set our course for where this remarkable country will go next.

Because today, Mr Deputy Speaker,

I can report to the British people…that their hard work is paying off……and the era of austerity finally coming to an end.

Mr Deputy Speaker,

I’m sure like me – many members of the House, keenly remember the last Budget delivered on a Monday…it was 1962……I was 6 years old……tensions between Russia and the United States were rising……and a former Foreign Secretary turned Chancellor…delivered a Budget amid Cabinet revolt…

And I remember my parents turning to me and saying: Philip, that could be you one day.

Mr Deputy Speaker…the media has been full of speculation about the timing of today’s Budget…

Some were hoping for a December budget:

I am sure the headline writers were ready with:

“Spreadsheet Phil turns Santa Claus”.

Others were desperate for it to be on Wednesday:

“Hammo House of Horrors” perhaps

But the truth is, by choosing today, rather than Wednesday, I have not avoided the blood-curdling threats, the anguished wailing, and the strange banging of furniture that is usually associated with Wednesday..…I have kindly been invited to a special meeting of the 1922 committee this evening.

Mr Deputy Speaker,

Our economy continues to confound those who talk it down…and we continue to focus resolutely on the challenges and opportunities that lie ahead……as we build a new relationship with our European neighbours…a new future outside the European Union.

But as we do so, let us not forget the remarkable achievements of the British people in clearing up the aftermath of Labour’s Great Recession……Because, for all Labour’s carping and relentless negativity…talking Britain down at every opportunity…We the British people have a record to be proud of:

Eight straight years of economic growth;

Over 3.3 million more jobs

Higher employment and lower unemployment in every region and every nation of the United Kingdom;

Wages growing at their fastest pace in almost a decade

Income inequality lower NOW than at any time under the last Labour Government;

An economy back on its feet again;

An economy working… not for the few…nor even for the many…an economy working for everyone.

Mr Deputy Speaker,

We are at a pivotal moment in our EU negotiations…and the stakes could not be higher:

Get it right, and we will not only protect Britain’s jobs, businesses and prosperity…but we will also harvest a double “Deal Dividend”

A boost from the end of uncertainty;

And a boost from releasing some of the fiscal headroom I am holding in reserve at moment

We are confident that we will secure a deal which delivers that dividend.

Confident, but not complacent.

So we will continue to plan for all eventualities…and I will do so at this budget with a three-pronged approach:

First, I have already allocated £2.2bn to departments for Brexit preparations;

And in the Autumn Budget last year I set aside a further £1.5bn to be allocated for 2019-20.

Today I am increasing that sum to £2bn…and in the coming weeks the Chief Secretary will announce allocations to individual Departments.

Secondly, I shall maintain the headroom to my fiscal rules broadly as set out in the Spring Statement…retaining firepower to intervene if the economy needs more support in the coming months.

And thirdly, as I have been clear since moving to an Autumn Budget… if the economic or fiscal outlook changes materially in-year…

I will take whatever action is necessary including upgrading the Spring Statement to a full Fiscal Event.

Mr Deputy Speaker,

The House can be confident that we are working for the best outcome for Britain…but preparing for every eventuality.

Mr Deputy Speaker,

I shall first report to the House on the economic forecasts of the independent OBR……and I thank Robert Chote and his team, for their work.

The OBR expect growth to be resilient across the forecast period……improving next year from the 1.3% forecast at the Spring Statement……to 1.6%……then 1.4% in 2020 and 2021; 1.5% in 2022; and 1.6% in 2023.

Mr Deputy Speaker,

This Government has prioritised getting people into work……because the best way to help people is to provide them with the stability of a pay packet every month.

Since 2010 over 3.3 million more people are in work…And today the OBR confirm Britain’s “jobs miracle” is set to continue……revising up participation in the labour market…… revising down the country’s “equilibrium unemployment rate”……predicting 800,000 more jobs by 2023.

By my calculation Mr Deputy Speaker, that’s over 4.2 million net new jobs since 2010…making the Shadow Chancellor’s prediction of 1.2m jobs lost out by the tiny margin of 5.4m…or roughly the population of Scotland!

But now we need to focus on pay…and with the proportion of low paid jobs at its lowest since 1997…with regular pay growth at 3.1%, its strongest in almost a decade…and inflation forecast to average 2% next year…the OBR is forecasting sustained real wage growth in each of the next five years…a far cry from the dismal picture that the Leader of the Opposition is so desperate to paint every Wednesday.

Turning now to the fiscal forecast.

We inherited the highest budget deficit in our peacetime history.

But after eight years, the hard work of the British people is paying off.…and we will not squander their efforts.

Today’s forecast, taking into account all announcements made since the Spring Statement, including measures I shall announce today, shows the deficit down from almost 10% under Labour…to less than 1.4% next year under this Conservative Government…and falling to just 0.8% by 2023-24.

Borrowing this year will be £11.6bn lower than forecast at the Spring Statement……just 1.2% of GDP……and is then set to fall from £31.8bn in 2019/20……to £26.7bn in 2020-21……£23.8bn in ‘21’-‘22’……£20.8bn in ’22-‘23’…and £19.8bn in 2023-24, its lowest level in over 20 years…

We meet our structural borrowing target 3 years early….…and deliver borrowing of just 1.3% of GDP in 2021……maintaining £15.4bn headroom against our 2% Fiscal Rules target.

We are no longer borrowing at all to finance current spending.

And today the OBR confirm that our national debt peaked in 2016/17…at 85.2% of GDP……and then falls in every year of the forecast from 83.7% this year; to 74.1% in 23-24……that’s lower in every year than forecast at the Spring Statement…and it means that we meet our target to get debt falling 3 years early…a turning point in our nation’s recovery from Labour’s Great Recession. 

Both our fiscal rules met; both of them three years early.

So, Mr Deputy Speaker,

Fiscal Phil says: Fiscal Rules OK.

But Mr Deputy Speaker,

While we are working to get Britain’s debt down…to end the nightmare of wasting over £50bn a year on interest……the party opposite would do the opposite:

Their plans would increase tax and borrowing by a thousand billion pounds……taking our debt-to-GDP ratio soaring to well over 100%.

A reckless and irresponsible policy from a reckless and irresponsible party.

But I have always been clear:

Sound public finances are essential – but they are not an end in themselves.

So since I have been Chancellor, I have taken a balanced approach…putting an additional £60 billion into our public services and investment in our future…cutting tax for 31 million of people…and all the while reducing borrowing and getting our national debt falling.

Now we must do more……and thanks to the hard work of the British people, in this Budget we can do more.

I said at the Spring Statement…that our careful management of the public finances was beginning to pay off…and that if the improvement we saw then continued……then we I would be able to provide more support to our public services on a sustainable basis.

Today, the OBR confirm a significant improvement in our public finances…an upgrade that underscores the hard work of the British people…and this government’s stewardship of this economy since 2010…and which means I can deliver on that promise I made in the Spring.

Setting out a new path for public spending…and a clear view for the British of the fruits of their hard work.

Next year we will conduct a full Spending Review…setting our priorities for public spending within a sustainable funding envelope…deciding on the right balance between investing in Britain’s future…and current consumption of public services.

Today, I have set out an indicative 5-year path for departmental resource spending…”RDEL” as it is known to aficionados of public finance.

For context, Mr Deputy Speaker,

In Spending Review 2010 average real growth was –3%;

In Spending Review 2015 it was –1.3%;

From next year it will be +1.2% average annual real growth.

But that is not the limit of my ambition.

When our EU negotiations deliver a deal, as I am confident they will…I expect that the “Deal Dividend” will allow us to provide further funding for the Spending Review.

The hard work of the British people is paying off.

The era of austerity is coming to an end.

Now Mr Deputy Speaker,

You will know better than most that every Chancellor likes to have a rabbit or two in his hat as he approaches a budget…but this year, some of my star bunnies seem to have escaped just a little early!

In June, My RHF the PM announced the single largest cash commitment to our public services ever made by a peacetime Government…An £84bn five year deal for our precious NHS…half as much again as the increase Labour offered the NHS at the last election.

And let me be clear:

We are delivering this historic £20.5bn real terms increase for the NHS in full over the next five years.

So, in a very important sense, we made our big choice for this budget, four months before it was delivered.

And this was the right decision: our NHS is the number one priority of the British people; and as we approached the 70th anniversary of its foundation, they had a right to know the scale of our commitment to it.

But the British people also care that money invested in the NHS goes to the front line and to improvements in services.

So we didn’t just hand over the money…we agreed that the NHS would produce a ten-year plan…setting out how the service will reform…how waste will be reduced …and exactly what the British people can expect to get for their money.

That plan will be published shortly…But I shall give the House a sneak preview today:

I too can poach a rabbit every now and again. There are many pressing demands on additional NHS funding…but few more pressing than the needs of those who suffer from mental illness.

And today I can announce that the NHS 10 Year Plan will include a new mental health crisis service…with comprehensive mental health support available in every major A&E…children and young peoples’ crisis teams in every part of the country…more mental health ambulances…more “safe havens” in the community …and a 24-hour mental health crisis hotline.

These new services will ensure that people suffering from a crisis, young or old, can get the help they need…ending the stigma that has forced too many to suffer in silence…and the tragedy of too many lives lost to suicide.

We are proud to have made this extraordinary commitment to funding our NHS – a precious institution that has been nurtured for most of its life by Conservative Governments.

Mr Deputy Speaker,

Departmental spending allocations with be settled at the Spending Review next year…However, there are a small number of areas where I will provide further support now…in order to provide necessary certainty for forward planning.

Local government has made a significant contribution to repairing the public finances ….and this Budget ensures local councils have more resources to deliver high quality public services.

We are giving councils greater control over the money they raise…through the Adult Social Care precept…through our plans for increased business rate retention from 2020…and by removing the Housing Revenue Account cap so that councils can help to build the homes this country needs.

We will shortly publish our Green Paper on the future of Social Care…setting out the choices, some of them difficult, for making our social care system sustainable into the future.

But I recognise the immediate pressures Local Authorities face in respect of social care.

So today, building on the £240m for Social Care winter pressures announced earlier this month…I will make available a further £650m of grant funding for English Authorities for 2019-20 …and an additional £45m for the Disabled Facilities Grant in England in 2018-19.

And we’ll invest a further £84m over the next five years…to expand our successful Children’s Social Care programmes to 20 further councils with high or rising numbers of children in care…allowing councils to improve services for older people, people with disabilities, and for children in care now…while longer-term funding decisions will be made at the Spending Review.

Mr Deputy Speaker,

The UK spends more on defence than any NATO member except the US;

But over the last year we have had stark reminders of the scale, scope and complexity of the threats we face.

My RHF the Defence Secretary is working with the Cabinet Office and the Treasury to conduct a Review into the modernisation of our armed forces in response to the evolving threat…which will form the basis for a comprehensive consideration of Defence spending next year.

But as a former Defence Secretary myself, I understand the immediate pressures our Armed Forces are facing.

So I will provide an additional £1bn to the MOD to cover the remainder of this year and next…to boost our cyber capabilities…and our anti-submarine warfare capacity…and to maintain the pace of the Dreadnought programme to ensure Continuous At Sea Deterrence…a Deterrent Mr Deputy Speaker that allows us to sleep easy in our beds…but one that the Leader of the Opposition and the Shadow Chancellor have spent their political lifetimes campaigning to abolish.

Nobody should be in any doubt that on this side of the House we are proud of our Armed Forces and we will always back them with the investment they need to keep this country safe.

And, Mr Deputy Speaker…It is not only our armed forces that keep us safe.

Our Counter-terrorism police play a vital role in defending Britain against the evolving threats we face.

We committed in 2015 to spend 30% more on Counter Terrorism capabilities over the current Spending Review period.

And today I commit an additional £160m of CT police funding for 2019-20…to protect CT police numbers in 2019-2020…and to allow future CT police funding to be considered in the round at the Spending Review.

I recognise that policing more generally is under pressure from the changing nature of crime.

I also recognise the representations made on this by many colleagues, such as my HF the Member for South-West Bedfordshire…and I can tell the House today that my RHF the Home Secretary will review police spending power and further options for reform when he presents the provisional police funding settlement in December.

Mr Deputy Speaker

As I have already set out…due to the hard work of the British people…public borrowing this year is coming in substantially below forecast.

This allows us to provide additional support for public services in the Spending Review…and contributes to the significant reduction in forecast debt this year.

But I also want to use this good news to give a little bit back, where it can be put to good use, in this financial year.

Mr Deputy Speaker,

This year marks a century since the end of the First World War.

And as we remember our fallen servicemen and women whose sacrifice ensured the freedom we enjoy today…many projects are raising money for veterans’ charities from sales of commemorative items on which VAT is charged.

Now we cannot waive the VAT due on these sales.

But we can make a donation with the VAT we will receive…and I commit today that the Treasury will mark the Centenary of the Armistice by making a donation of £10m to the Armed Forces Covenant Fund Trust to support veterans with mental health needs.

Many of our nation’s village halls were built to commemorate the sacrifice of WW1…and many of them are being refurbished to commemorate the centenary.

So I will provide funding for grants equivalent to the VAT chargeable on such refurbishment projects.

And as our focus moves from the First World War to the Second…I will also provide £1.7 million for educational programmes in schools to mark the 75th anniversary of the liberation of the Bergen-Belsen concentration camps…ensuring the next generation hears the stories of those who survived the holocaust, and of the British soldiers who liberated them…because as the terrible events in Pittsburgh this weekend remind us… the battle against anti-Semitism did not end with the defeat of Nazi Germany.

Across the length and breadth of England, our air ambulance services work tirelessly to get those with life-threatening illnesses and injuries quickly to the expert medical care they need…funded entirely by philanthropy…they do a fantastic job…and today I am making £10m of funding to help them to go on doing so. 

Mr Deputy Speaker,

We’re investing record amounts in our schools…and that investment is paying off with 86% of schools, 86% of schools,  now rated good or outstanding, compared to 68% in 2010.

But I recognise that school budgets often do not stretch to that extra bit of kit that would make such a difference.

So today I am announcing a £400m in-year bonus to help our schools buy the little extras they need…a one-off capital payment directly to schools… averaging £10,000 per primary school and £50,000 per Secondary School.

Mr Deputy Speaker,

I have one final in-year measure to announce:

Every Member of Parliament will testify that potholes are high on the public’s list of concerns.

So as Autumn takes hold, I am making an additional £420m available immediately to Local Highway Authorities…to tackle potholes, bridge repairs, and other minor works in this financial year.

But Mr Deputy Speaker,

If we want sustainable world class public services…and rising living standards… we must make the serious long-term reforms our economy needs…to tackle the productivity challenge…prepare our nation for the technological change ahead…and show the next generation that our market economy can evolve once again to meet the needs of the new age.

Because, for us on this side of the House, “ending austerity” is not just about funding public services;

It’s about real wage growth…and it’s about leaving more of people’s hard-earned money in their pockets.

This is the nation of the Industrial Revolution…of Stephenson, of Whittle, Lovelace and Faraday…people whose ideas shaped the world around them.

And today, Britain once again can lead the world as we exploit a new wave of scientific and technological discovery pouring out of our Universities and Research Institutes.

And we can solve the productivity challenge if we are willing to embrace the future…to make the choice to invest in infrastructure, in research, in skills and in our regions…to manage change, not hide from it.

Mr Deputy Speaker…I believe passionately in this agenda.

But even I would admit that at the last two Budgets I might have given the House just a little bit more detailed information on productivity enhancement and technological innovation than it strictly needed!

So, Mr Deputy Speaker this time I will leave it to the Budget Red Book to set out more detail of the many (further) measures we will take today…

Sensing the disappointment of some of my colleagues I will set out some of these…including our commitment to technology with £1.6bn of new investments to support our modern industrial strategy, from nuclear fusion to quantum computing…and £150m for fellowships to attract the brightest talent to these shores so that our scientific research continues to lead the world …and our commitment to infrastructure, expanding the National Productivity Investment Fund once again – to over £38bn by 2023-24…so that over the next five years, total public investment is growing by 30%…to its highest sustained level in 40 years…and will, on average, be an astonishing £460m a week higher, in real terms, than under the last Labour Government.

A Conservative Government…Mr Deputy Speaker…investing in the roads, railways, research, and digital infrastructure that will power our economy in the 21st Century.

Mr Deputy Speaker,

Half of the UK’s £600 billion infrastructure pipeline will be built and financed by the private sector.

And in financing public infrastructure…I remain committed to the use of public-private partnership where it delivers value for the taxpayer…and genuinely transfers risk to the private sector.

But there is compelling evidence that the Private Finance Initiative does neither.

The Shadow Chancellor, of course, rages against PFI at every opportunity…yet curiously, forgets to mention that nearly 90 per cent of those contracts were agreed by the last Labour government…leaving the nation with a bill of more than £200 billion to pay off…In what would be the most potent symbol of the economic mismanagement of the last Labour government…if only Gordon Brown hadn’t sold the gold.

Labour’s policy is to terminate all these contracts…triggering the ruinous penalty clauses that they themselves agreed to in the first place…adding tens of billions more to that already enormous bill.

A classic Labour solution: pouring good money after bad.

I will not do that.

We will honour existing contracts.

But the days of the public sector being a pushover, must end.

We will establish a centre of excellence to actively manage these contracts in the taxpayers’ interest starting in the health sector.

And we will go further.

I have never signed off a PFI contract as Chancellor…and I can confirm today that I never will.

I can announce that the Government will abolish the use of PFI and PF2 for future projects.

Putting another legacy of Labour behind us.

Mr Deputy Speaker,

We’re investing in our nation’s infrastructure…and backing the technologies of the future…but we know that the real engine of growth is enterprise.

The RHM for Hayes and Harlington lists “fomenting the overthrow of capitalism” as his pastime.

Mine is “reinvigorating capitalism for the digital age”…because Mr Deputy Speaker I want Britain to be one of the great winners of the technological revolution.

On this side of the House we will always back enterprise and the market economy that underpins it…because we know it is the only way to deliver the high-wage, high-skill economy of the future.

As we finalise our departure from the EU…and deliver a deal that secures Britain’s future trade…we must unleash the investment that will drive our future prosperity.

So today I can announce a package of measures to stimulate business investment and send a message loud and clear to the rest of the world:

Britain is open for business:

I am increasing the Annual Investment Allowance, from £200,000 to £1m for two years, delivering on a longstanding ask of the British Chambers of Commerce;

I am providing a targeted relief for the cost of acquiring IP-rich businesses;

And introducing a permanent tax relief for new non-residential structures and buildings…partly funded by an adjustment in the special writing down rate for long-life assets from 8% to 6%..…to better align the tax and accounting treatment of these assets;

To support British exports we will increase UKEF’s direct lending facility by up to £2bn;

We’ll open the use of e-passport gates at Heathrow and other airports…currently only available to EEA nationals…to include visitors from the US, Canada, New Zealand, Australia and Japan;

And we will provide an additional £200m of funding to the British Business Bank to replace access to the European Investment Fund if needed;

We’ll back another 10,000 entrepreneurs by extending Start-Up Loans funding to 2021;

And following representations from the FSB…I am extending the New Enterprise Allowance – providing mentoring and support for benefit claimants to get their business idea off the ground.

And with thanks to my HF the Member for Thirsk and Malton…we’re working with the FCA on expanding access to the Financial Ombudsman Service for larger SMEsAs well as backing businesses to invest and grow, we will also make sure British workers are equipped with the skills they need to thrive and prosper.

We have introduced a new system of T level vocational training…have put the first £100m into the new National Retraining Scheme…and through the apprenticeship levy we are delivering 3 million high quality apprenticeships in this Parliament.

But that system Mr Deputy Speaker is paid for by employers…and it has to work for employers.

So today in addition to the flexibilities I announced earlier this month…I can announce that for smaller firms taking on apprentices we will half the amount they have to contribute from 10% to 5%.

In total a £695m package to support apprenticeships.

Mr Deputy Speaker,

As our economy evolves in the digital age…so too must our tax system…to ensure that it remains fair and robust against abuse…and that it raises the revenues we need to fund our public services.

The Employment Allowance was introduced to incentivise businesses to take on employees.

But at a flat £3,000 per employer, it does not provide any real incentive for larger employers,

So, from April 2020, we’ll target it at small and medium businesses with an Employer NICs bill under £100k a year.

We will also bring the treatment of capital losses for the largest companies into line with that of income losses;

Mr Deputy Speaker,

We re-commit today to keeping family homes out of Capital Gains Tax…but some aspects of Private Residence Relief extend it beyond that objective…and provide relief for people who are not using the home as their main residence.

So from April 2020 we will limit Lettings Relief to properties where the owner is in shared occupancy with the tenant, and reduce the final period exemption from 18 months to 9 months.

Mr Deputy Speaker,

I have received representations that I should abolish Entrepreneur’s Relief…and put the savings towards funding our NHS commitments.

But I do not believe we can have sustainable public services unless we have a dynamic economy.

And encouraging entrepreneurs must be at the heart of any strategy for a dynamic economy,

So I will retain the relief…but to ensure it is going to genuine entrepreneurs I will extend the minimum qualifying period from 12 months to 2 years.

Mr Deputy Speaker,

In the period since the last Budget…we’ve explored all avenues to address the cliff edge effect of VAT registration…but our options are restricted by EU law.

We will continue to work on this issue as our future VAT regime becomes clear over the years ahead.

In the meantime, to give small businesses certainty, and in response to representations from my HF the Member for Mid Worcestershire, the FSB and others, I will leave the threshold unchanged for a further two years.

Mr Deputy Speaker,

The off payroll working rules – known as IR35 – are designed to ensure fairness…so that individuals working side by side in a similar role for the same employer…pay the same employment taxes.

Last year, we changed the way these rules are enforced in the Public Sector.

But widespread non-compliance also exists in the private sector …So following our consultation, we will now apply the same changes to private sector organisations as well.

But after listening carefully to representations during the consultation, including many from my honourable and right honourable friends, we will delay these changes until April 2020…and we will only apply them to large and medium-sized businesses.

Mr Deputy Speaker,

There is one stand-out example of where the rules of the game must evolve now if they are to keep up with the emerging Digital Economy:

Digital Platforms delivering search engines, social media, and online marketplaces have changed our lives, our society, and our economy…mostly for the better.

But they also pose a real challenge for the sustainability and fairness of our tax system.

The rules have simply not kept pace with changing business models.

And it’s clearly not sustainable, or fair, that digital platform businesses can generate substantial value in the UK without paying tax here in respect of that business.

The UK has been leading attempts to deliver international corporate tax reform for the digital age.

A new global agreement is the best long-term solution.

But progress is painfully slow.

We cannot simply talk forever.

So we will now introduce a UK Digital Services Tax.

This will be a narrowly-targeted tax on the UK-generated revenues of specific digital platform business models.

It will be carefully designed to ensure it is established tech giants – rather than our tech start-ups – that shoulder the burden of this new tax.

It is important that I emphasise that this is not an online-sales tax on goods ordered over the internet…such a tax would fall on consumers of those goods – and that is not our intention.

The Digital Services Tax will only be paid by companies which are profitable…and which generate at least £500m a year in global revenues in the business lines in scope.

We will consult on the detail to make sure we get it right, and to ensure that the UK continues to be the best place in the world to start and scale-up a tech business.

The tax will come into effect in April 2020…and is expected to raise over £400m a year.

In the meantime we will continue to work at the OECD and G20 to seek a globally agreed solution.

And if one emerges, we will consider adopting it in place of the UK Digital Services Tax.

But this step shows that we are serious about this reform.

Because, Mr DS, it is only right that these global giants, with profitable businesses in the UK, pay their fair share towards supporting our public services.

And Mr Deputy Speaker,

I am already looking forward to my call from the former Leader of the Liberal Democrats.

We’re updating the rules of the game…but we must also make sure people play by the rules.

And today we continue the work of the past eight years…where we’ve secured £185bn since 2010, which would otherwise have gone unpaid……with a package of measures today to further clamp down on tax avoidance, evasion, and unfair outcomes raising another £2bn over the next five years.

We’ll make HMRC a preferred creditor in business insolvencies…to ensure that tax which has been collected on behalf of HMRC – is actually paid to HMRC.

We’ll end the practice of purchasing services through overseas branches to avoid UK VAT…and we’ll crack down on insurance companies routing services through offshore territories.

And we’ll stop our generous R&D tax credits system being abused by re-introducing a PAYE restriction for the small and medium sized companies scheme.

Mr Deputy Speaker,

Labour talk tough on tax avoidance and evasion…we take action.

Mr Deputy Speaker,

Investing in our infrastructure;

Backing the technologies of the future;

Supporting British businesses;

Updating our tax system for the digital age;

That is how we’ll deliver the high-wage high-skill economy of the future.

But we must also recognise that technological change will bring challenges – as well as opportunities….

…and there is one part of our economy that is currently confronting that challenge in spades:

Our High Streets.

Embedded in the fabric of our great cities, towns, and villages, the High Street lies at the heart of many communities.

And it is under pressure as never before as Britain adopts on-line shopping with greater alacrity than any other large economy.

So, if Britain’s High Streets are to remain at the centre of our community life…they will need to adapt.

Today we support them to do so – responding to calls from across this House, especially from my RHF the Member for Putney, and my HFs the Members for Southport and Croydon South.

We will provide £675m of co-funding to create a Future High Streets Fund to support Councils to draw-up formal plans for the transformation of their High Streets…to invest in the improvements they need…and to facilitate redevelopment of under-used retail and commercial areas into residential…At one and the same time…helping with the housing challenge…and delivering much needed footfall to High Street Businesses.

We will consult on how modernisation of the Use Classes Order and CPO regime can help facilitate the transformation of the High Street;

Mr Deputy Speaker,

The change that our High Streets face is irreversible and it will take them time to adapt to it.

But I know that many small retail businesses are struggling to cope with the high fixed costs of Business rates.

Since 2016 we have introduced business rates relief measures worth £12bn…and many of these reliefs will have benefitted High Street businesses.

But today I can go further:

At the next revaluation in 2021, rateable values will adjust to reflect changes in rental values.

But I want to help retail businesses now.

So for the next two years, up to that Revaluation, for all retailers in England with a rateable value of £51,000 or less, I will cut their business rates bill by a third.

That’s an annual saving of up to £8,000 for up to 90% of all independent shops, pubs, restaurants and cafes.

I will also extend the £1,500 local newspaper discount for a further year:

Mr DS, whatever the national press says, I have been assured of a warm welcome for my budget from the Royston Crow and the Keswick Reminder.

Mr Deputy Speaker,

Local Authorities have long been able to provide discretionary business rates relief to other bodies – but not to themselves.

And so following representations from my HFs for North Cornwall and St Austell and Newquay…I am pleased to announce a new mandatory business rates relief for public lavatories…so that local authorities can, at last, relieve themselves.

For the convenience of the House, Mr Deputy Speaker,…and without wishing to get unduly bogged down in this subject…the House will be interested to know…well at least I am demonstrating that we are all British…this relief will extend to any such facilities made available for public use, whether publicly or privately owned.

Honestly, MR DS, this is virtually the only announcement in this Budget that hasn’t leaked.

Mr Deputy Speaker,

We can’t resolve the productivity challenge…or deliver the high standards of living the British people deserve…without fixing our housing market.

In last year’s Budget I launched a five-year, £44bn housing programme…to deliver the biggest increase in housing supply since 1970…and I abolished Stamp Duty for First Time Buyers on properties up to £300,000.

121,500 First Time Buyers have already benefited from our new relief…and the number of First Time Buyers is at an eleven year high.

Today I am extending this relief to all first time buyers of shared ownership properties valued up to £500k…and we’ll make this relief retrospective so any first time buyer who has made a purchase since the last Budget will benefit.

But we have more to do…so I can announce today:

A further £500m for the Housing Infrastructure Fund, to unlock a further 650,000 homes;

The next wave of strategic partnerships with 9 Housing Associations to deliver 13,000 homes across England;

Up to £1bn of British Business Bank guarantees to support the revival of SME housebuilders;

We are consulting on simplification of the process for conversion of commercial property into new homes;

And because we want to see parishes and neighbourhoods enabling more homes for sale to local people to buy, at prices they can afford…we’re providing funding to empower up to 500 neighbourhoods to allocate or permission land for housing…through the neighbourhood planning system…for sale at a discount to local people in perpetuity.

I am also grateful to my RHF the Member for West Dorset for his review of build-out rates – published today.

He concludes that the large housebuilders are not engaged in systematic speculative land-banking…and makes several recommendations…well maybe the Honourable Lady would like to read the report… for reform of the planning system in respect of very large strategic housing sites.

We will respond in full to his report in the New Year.

Mr Deputy Speaker,

Meeting the productivity challenge……means tapping the potential of every region and nation.

Our devolution agenda is giving power back to the people…and today we go further to fire-up the Northern Powerhouse, fuel the Midlands Engine and back our regions across the UK.

We’re increasing the Transforming Cities Fund to £2.4bn…and providing an additional £90m to trial new models of smart transport, including ‘on demand buses’…(…Mr DS, which I think in our day, we used to call taxis…)

We’re launching a competition for proposals for business led-Development Corporations;

We’re funding ten University Enterprise Zones;

There’s £115m for Digital Catapults in the North East, Northern Ireland, and the South East…and the Medicines Discovery Catapult in Alderley.

£70m to develop the Defence and National Rehabilitation Centre near Loughborough;

£37m of additional development funding for Northern Powerhouse Rail…and £10m for a new pilot in Manchester to support the self-employed to acquire new skills.

We’re backing a new Special Economic Area in South Tees… and we’re providing £20m to further develop the plan for the critical central section of East-West rail.

And here in our Capital we support the delivery of a further 19,000 homes by improving the Docklands Light Railway with Housing Infrastructure Fund money.

Mr Deputy Speaker,

The decisions announced in this Budget means in 20-21 an additional…

£950m for the Scottish Government;

£550m for the Welsh Government.

And £320m for a Northern Ireland Executive. Obviously much larger sums to come..I can also announce funding for further City and Growth deals, including £150m for Tay Cities, £350m for Belfast, and £120m for North Wales…while negotiations progress with Ayrshire, Mid Wales and Borderlands…and begin with Moray, Derry/Londonderry and Strabane as well.

I was pleased to be able to respond to a joint request from the members for Belfast North, Belfast East, and Belfast South to provide with the city with £2m help towards the recovery of the city centre following the fire at the iconic Bank Building …and we’re moving forward with schools projects in Northern Ireland worth £300m, to increase the provision of shared and integrated education. 

And we’ve agreed to the establishment of a working group to progress plans for short haul APD devolution.

To continue to support Scotland’s oil and gas industry …we will maintain headline tax rates at their current level…and launch a call for evidence on our plan to make Scotland a global hub for decommissioning.

And finally, to support our vital fishing industry as we leave the EU…we’ll invest £12m over the next three years in cutting edge fisheries technology and safety measures.

A Conservative Government, Mr Deputy Speaker, delivering for all our proud nations…and for all our English regions.

Driving growth and prosperity across our United Kingdom.

Mr Deputy Speaker,

We are driven by a determination to ensure that the next generation…will be more prosperous than ours.

But we cannot secure our children’s future unless we secure our planet’s future…

So at this Budget I take further action with a package of measures, set out in the Budget Red Book, to ensure that we leave our environment in a better state than we inherited it…There is one particular measure I want to mention…the Shadow Chancellor’s recent accident has reminded us all how dangerous abandoned waste can be…so I will provide £10m to deal with abandoned waste sites..…although I can’t guarantee to the House that £10m is going to be enough to stop him falling flat on his face in the future.

Mr Deputy Speaker,

I also said at the Spring Statement that we must become a world leader in tackling the scourge of plastic littering our planet and our oceans.

Billions of disposable plastic drinks cups, cartons, bags and other items are used every year in Britain…convenient for consumers…but deadly for our wildlife and oceans.

Where we cannot achieve re-use, we are determined to increase recycling… so we will introduce a new tax on the manufacture and import of plastic packaging which contains less than 30% recycled plastic…transforming the economics of sustainable packaging.

We will consult on the detail and implementation timetable.

I have also looked carefully at the case for introducing a levy on the production of disposable plastic cups…not just for coffee, but for all types of beverage… I have concluded that a tax in isolation would not, at this point, deliver a decisive shift from disposable to reusable cups across all beverage types.

I will monitor carefully the effectiveness of the action which the takeaway drinks industry is taking to reduce single-use plastics…and I will return to this issue if sufficient progress is not made.

But in parallel, my RHF the Environment Secretary will look to address this issue through the reform of the Packaging Producer Responsibility scheme.

Working across government, this ambitious package reflects our determination to lead the world in the crusade to rid the oceans and the environment of plastic waste.

Mr Deputy Speaker,

It’s only by dealing with our debts and tackling the long term challenges our country faces, that we can sustainably raise wages and living standards.

But I recognise that many people are feeling pressure on their household budgets now.

And because the hard work of the British people is paying off I am pleased to be able to announce today a series of measures to help families across Britain with the cost of living.

Mr Deputy Speaker,

Turning first to duties…as my RHF the PM has already announced……we will freeze fuel duties for the ninth successive year…bringing the total saving to the average car driver to over £1,000……and to the average van driver to over £2,500…The tobacco duty escalator will continue to rise at inflation plus 2%…

Mr Deputy Speaker,

I have received numerous representations from my H and RHFs on one particular subject…I will therefore be freezing beer and cider duty for the next year…keeping the cost of beer down for patrons of the Great British Pub.

And, in response to the concerted lobbying of my Scottish Conservative colleagues…I will also freeze duty on spirits…so that we can all afford to raise a wee dram to Ruth Davidson on the arrival of baby Finn…saving 2p on a pint of beer, 1p on a pint of cider, and 30p on a bottle of Scotch or gin compared to the inflation assumption in the OBR forecast…while proceeding with the usual RPI increases on wine.

As promised at Autumn Budget 2017, so-called white ciders will be taxed at a new higher rate.

From October next year, I can confirm that we will increase Remote Gaming Duty on online games of chance, to 21%..…in order to fund the loss of revenue as we reduce FOBT stakes to £2.

From April 2020 APD will be indexed in line with inflation, but there will be no change in the duty rate for short-haul flights.

And the new 26-30 railcard, which I announced at Budget last year, will be available across the network by the end of the year…saving up to 4.4 million young people 1/3 off their fares.

And we launch a package of measures on affordable credit and support for credit unions, which is set out in the Red Book.

Mr Deputy Speaker,

The switch to Universal Credit is a long overdue and necessary reform…it replaces the broken system left by the last Labour Government, a system Mr Deputy Speaker, that trapped millions on out-of-work benefits for nearly a decade.

This is not just a welfare measure…it is a major structural reform to our economy that will help to drive growth and employment in the years ahead…and I pay tribute to my RHF the Member for Chingford without whose tenacity Universal Credit would never have seen the light.

But I recognise the genuine concerns among many H and RHFs about two issues:

First, the implementation of this programme.

It is an enormous undertaking…and we have always been clear we want the migration process to be as smooth as possible.

I have already delivered nearly £3.5 billion to help with the transition…including a £1.5bn package of support at last year’s Budget.

Today I can go further…with a package of additional, what a surprise Mr Deputy Speaker from the Opposition frontbench, with measures worth a £1billion over 5 years…enabling my RHF Secretary of State for Work and Pensions to introduce additional protections as existing welfare claimants move onto UC…and she will announce details when she introduces the Managed Migration Regulations later this year.

Secondly, I have heard the concerns about the rates and allowances within the design of the system.

In my first Autumn Statement I reduced the UC taper rate from 65% to 63%.

And today I can tell the House I am increasing work allowances in Universal Credit by £1,000 per annum…at a cost of £1.7bn annually once roll-out is complete…benefitting 2.4 million working-families-with-children, 2.4 million working-families-with-children, and people with disabilities by £630 per year.

Mr Deputy Speaker,

Universal Credit is here to stay, and we are putting in the funding it needs to make it a success.

Because on this side of the House – we believe that work should always pay.

Mr Deputy Speaker,

Delivering higher wages for those in work is core to my mission as Chancellor…

Under this Conservative Government the poorest 20% have seen their real incomes grow faster than the richest 20% …and the proportion of jobs that are low paid is at its lowest level for 20 years..…thanks to the National Living Wage introduced by a Conservative Government in 2016.

From April it will rise again, by 4.9%, from £7.83 to £8.21…handing a full-time worker a further £690 annual pay increase…and taking his or her total pay-rise, since the introduction of National Living Wage, to over £2,750 a year.

We also accept the Low Pay Commission’s recommendations on National Minimum Wage rates…supporting young people and apprentices with further above inflation increases.

The current remit for the LPC is for the National Living Wage to reach 60% of Median Earnings by 2020, subject to sustained economic growth.

But next year we will give the LPC a new remit beyond 2020.

We will want to be ambitious…with the ultimate objective of ending low pay in the UK…but we will also want to be careful – protecting employment for lower paid workers.

So we will engage responsibly with employers, the TUC, and the LPC itself over the coming months…gathering evidence and views…to ensure we get this right – and I will confirm the final remit at the Budget next year.

I hear the Honourable Lady but her point is slightly muted as she made in it the Autumn of 2016 and again in the Autumn of last year.

Mr Deputy Speaker…as well as making work pay…we want working people to keep more of the money they earn.

When we came into office the personal allowance stood at £6,475…and the Higher Rate Threshold at £43,875.

In April, I raised the personal allowance to £11,850…and the Higher Rate Threshold to £46,350…as steps towards our manifesto commitments of £12,500 and £50,000 respectively by 2020.

Those manifesto commitments were, of course, made before our new funding pledge to the NHS…and I have received representations that the least painful way for taxpayers to contribute to increased NHS funding…would be to abandon our manifesto pledges and freeze the Personal Allowance and the Higher Rate Threshold at current levels.

But let me reassure the House that – unlike the RHG Opposite – my idea of ending austerity does not involve increasing people’s tax bills.

I didn’t come into politics to put taxes up.

And the improvement we have delivered in the public finances means that, based on the OBR’s forecast, published today…I do not need to do so.

I can therefore confirm today that I will meet our manifesto commitments in April 2020.

Raising the Personal Allowance to £12,500 and the Higher Rate Threshold to £50,000.

Before indexing both in line with inflation from 21-22.

But our careful management of the economy allows me to go further:

So I will raise both the Personal Allowance and the Higher Rate Threshold to these levels from April 2019…delivering our manifesto commitments one year early.

A tax cut for 32 million people…£130 in the pocket of a typical basic rate taxpayer…meaning since 2015 we’ve taken 1.7m people out of tax altogether…and nearly 1m people out of higher rate tax.

And Mr Deputy Speaker,

As a result of the announcements I have made today…a single parent, receiving Universal Credit, and working 25 hours a week on National Living Wage will benefit by £890 next year.

The hard work of the British people paying off …in hard cash in their pockets.

Mr Deputy Speaker we have turned an important corner…Now we must pull together……to build the bright, prosperous future that is within Britain’s grasp……if we choose to seize it:

Embracing change…not hiding from it……building on the inherent strength of the British economy…and the indomitable spirit of the British people.

Mr Deputy Speaker…under this Conservative government…austerity is coming to an end – but discipline will remain.…austerity is coming to an end – but discipline will remain, and that is the clear dividing line in British politics today:

Between a Conservative Government delivering on the British people’s priorities…supporting our public services…investing in Britain’s future…keeping taxes down…and getting our debt down……or the Corbyn Party…whose idea of ending austerity is to raise taxes to their highest level in peacetime history…who would send our debt soaring…who would squander the hard-won achievements of the past eight years….and take this country back to square one.

We are at a turning point in our history…and we must resolve to go forwards, not backwards…we must resolve to reject the relentless negativity of the Leader of the Opposition…and work together to build a Britain we can all be proud of.

I commend this Statement to the House.”

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