For further comment or to arrange an interview please get in touch with Laura Round: laura@brightblue.org.uk or 07543759844.
Commenting on the Budget, Ryan Shorthouse, director of Bright Blue, said:
“The Chancellor was right to robustly defend the necessity of and successes of fiscal retrenchment. The naysayers are wrong: Britain is a good place to live in for the majority of people, with employment, educational attainment and entrepreneurialism at record levels.
“But there are still economic, social and environmental challenges that the public wants Government to take bolder action on: the squeeze on living standards caused by poor productivity and ongoing cuts to working-aged benefits; the high price of housing for younger people in particular; and environmental problems such as air and plastic pollution.
“The Chancellor announced welcome and positive measures on abolishing the initial 7-day wait before you can claim Universal Credit, cutting Stamp Duty for nearly all first-time buyers, and introducing higher taxation for diesel cars.
“A single Budget, of course, cannot and should not seek to resolve all the challenges Britain faces and transform public attitudes towards a government. However, the Chancellor did miss the opportunity to be bold in radically distributing public expenditure under the current fiscal framework to really help the poorest in our society, fix the housing crisis and take the necessary steps to reduce carbon emissions and improve the environment.”
Housing
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The Government announced stamp duty will be abolished for first-time buyer purchases up to £300,000. In very high price areas, such as London, it will be available on the first £300,000 of the purchase price of properties up to £500,000.
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The Government will introduce planning reforms that will ensure more land is available for housing, and that maximises the potential in cities and towns for new homes while protecting the Green Belt.
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The Chancellor committed a total of at least £44 billion of capital funding, loans and guarantees to support the housing market.
Commenting, Sam Hall, senior research fellow, said:
“It is fantastic that the Chancellor has cut Stamp Duty for nearly all first-time buyers, as Bright Blue has been calling for. Rising house prices have hit first-time buyers the hardest. On top of this, since earlier in this decade, new rules on banks for lending to first-time buyers has made the costs of their mortgages more expensive. This significant cut in Stamp Duty will help more young people get on the first rung of the property ladder by reducing the total amount of money they need to pay upfront to purchase a property and tilt the market in their favour relative to existing homeowners.
“There were some sensible measures to increase supply, such as setting up new development corporations for garden towns and increasing density in urban areas. But it was disappointing that the Chancellor ruled out development on some areas of the Green Belt, which is necessary for alleviating the housing shortage in desirable parts of the country. In order to overcome concerns about the loss of green space, developers who are awarded planning permission on the Green Belt could be mandated to improve the net stock of natural capital in the local areas, for instance by creating a new park or forest.”
Universal credit
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The Government will remove the seven-day waiting period so that entitlement to Universal Credit starts on the first day of application.
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The Government will make it easier for claimants to have the housing element of their award paid directly to their landlord.
Commenting, Ryan Shorthouse, director of Bright Blue said:
“Under the previous Chancellor, the Treasury increased the period before people could become eligible for out-of-work benefits from three to seven days to reduce short-term claims and generate significant government savings. Even though people may cycle in and out of work quickly, they should still be entitled to – and will often need – some government support. And now this 7-day wait currently applies to all the different benefits wrapped into Universal Credit, it is evidently causing hardship. The Government is right to remove the initial seven day wait before people become eligible to claim Universal Credit.
“Although most claimants of Universal Credit are satisfied with the service, there are some who are suffering with increased rent arrears and indebtedness. Enabling some claimants to have the option of having their Housing Benefit paid directly to their landlord is a good start, but Government needs to introduce greater flexibility into the distribution and frequency of Universal Credit payments. Scotland and Northern Ireland have used their devolved powers to introduce more flexibility into the frequency of payment. England should have an opt-out system for claimants who prefer and need more frequent payments than monthly in arrears.
“The previous Chancellor’s harmful and disproportionate raid on working-aged benefits seemed to be halted in 2015 after the House of Lords voted down the proposed deep cuts to tax credits. But the pain was simply shifted to the future, in Universal Credit. In the quest to support people with the cost of living, the poorest should have been the priority. The Budget was a missed opportunity to restore, at least in part, the original work allowances in Universal Credit to improve work incentives.”
Taxation
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The Government will further reduce income tax by increasing the personal allowance to £11,850 and the higher rate threshold to £46,350, in line with inflation.
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The Government will maintain the VAT registration threshold at the current level of £85,000 for two years.
Commenting, Ryan Shorthouse, director of Bright Blue said:
“The Chancellor was too timid with taxation. He ought to have suspended the increases in the tax allowances for both Income Tax and Inheritance Tax, as well as the starting salary for higher-rate taxation. He could have chipped away at the regressive and expensive higher-rate pensions tax relief on private pension contributions too.
“The poorest should have been the priority for tax cuts. The Chancellor should have raised the starting salary for employees National Insurance, so it was more aligned with that for Income Tax.
“The Chancellor clearly has his eye on the inequity in the total tax paid by those who are self-employed, employees and company owners, even if they are on the same gross income. But his fingers got burnt on this subject earlier this year, when he tried to raise the main rate of Class 4 National Insurance Contributions. The Budget included some sensible measures, but for the sake of fiscal fairness and sustainability, this tax gap really does needs to be boldly addressed”.
Public sector pay
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The Government is committing to fund pay awards as part of a pay deal for NHS staff on the Agenda for Change contract, including nurses, midwives and paramedics.
Commenting, Ryan Shorthouse, director of Bright Blue, said:
“Nurses are the backbone of the NHS. But there is a serious problem with their recruitment and retention. They, along with teachers, should be the priority for any future pay rises above the public sector pay cap. Let us hope the independent pay review bodies suggest a significant increase in the pay of nurses and teachers.”
Energy
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The Government announced it will establish a new £400m charging infrastructure fund, invest an extra £100m in Plug-In-Car Grant, and £40m in charging R&D.
Commenting, Sam Hall, senior research fellow at Bright Blue, said:
“This has been a good Budget for clean transport. The Chancellor set out a positive, optimistic vision for UK economic leadership in new technologies, including autonomous and electric vehicles. Additional research and development funding for electric vehicles, together with further incentives for electric charge points, will strengthen the industrial strategy, while also reducing air pollution and carbon emissions.
“It is welcome that the Government is maintaining carbon pricing in the power sector until coal has been phased out. This will help keep the economics of coal less favourable than cleaner gas. It is potentially concerning, however, that the Government has announced there will be no new low-carbon levies until 2025. It is right that subsidies for renewables are now phased out, given the tumbling costs of wind and solar, but new renewables deployment will require fixed-price, government-backed contracts. The Government needs to ensure it maximises the opportunities for clean growth by establishing this new zero-subsidy mechanism.”
Environment
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The Government announced it will establish a £220m Clean Air Fund and changes to Vehicle Excise Duty and Company Car Tax to clean up Britain’s air.
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The Government stated its ambition to open consultations on how to tackle single-use plastic waste through the tax system.
Commenting, Eamonn Ives, researcher at Bright Blue, said:
“It is encouraging to hear the Chancellor underscore the potential for fiscal policy, specifically pollution taxes, to enhance Britain’s natural environment. The Government has already enjoyed significant success on reducing plastic bag pollution, so it is excellent to have a commitment to devise new ways of tackling other single-use plastics – such as polystyrene takeaway boxes and coffee cups – through the tax system.
“Similarly, on air pollution, it is welcome that the Chancellor is introducing a new Vehicle Excise Duty rate for diesel cars which do not reach emissions targets. Alongside the £220 million allocated for a Clean Air Fund, this should help to improve the UK’s air quality by incentivising consumers to move away from the worst polluting vehicles.
“However, the freeze on Fuel Duty and Air Passenger Duty for the majority of fliers will help with the cost of living, but it will, sadly, reduce the attractiveness of switching away from carbon-intensive forms of transportation.”
Education
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The Chancellor announced a significant increase in funding for the training of maths and computer sciences teachers.
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The Chancellor also announced a £600 reward for schools for every extra pupil who decides to take Maths or Further Maths at A-Level.
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The Government will enter into a formal skills partnership with the Trades Union Congress and the Confederation of British Industry, to develop the National Retraining Scheme.
Commenting, James Dobson, senior researcher at Bright Blue, said:
“New money for teacher training is welcome. However, it is unlikely to resolve the serious problem of recruiting and retraining teachers across the UK. Along with nurses, teachers should be a priority for a significant pay rise above and beyond the public sector pay cap. The Chancellor missed the opportunity to introduce salary supplements for high-quality teachers to be better attracted to teaching in underperforming schools and areas.
“The financial premium for sixth form schools and colleges that take on A-level pupils studying maths is a clever, welcome and necessary move. The evidence shows that studying maths to a high level has significant benefits both to the student and to the country as a whole.”
“The Government is right to launch a new national retraining scheme. Lifelong learning is critical to Britain’s economy: workers will increasingly need to reskill and upskill to access the new jobs and industries of the future. The Government should establish lifelong individual loan accounts for learners, so adults can afford the fees for any type or number of reputable courses they take throughout their lives.”
Disability
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The Chancellor announced £42 million of additional funding for the Disabled Facilities Grant to support people to stay in their own homes.
Commenting, James Dobson, senior researcher at Bright Blue, said:
“It is good news that the Chancellor is providing disabled people with additional funding to make changes to their homes. However, there is a severe shortage in the supply of new housing that meets the needs of disabled people. To redress this, the Government should introduce stronger building regulations to make both new houses – and conversions – more suitable for disabled people.”
