Budget 2017: 21 things you need to know
Chancellor has presented his Budget to Parliament – here's a summary of what
1. The economic forecast
Growth in the UK economy picked up through 2016. Employment has reached a
record high of 31.8 million people.
The Office for Budget Responsibility (OBR) now forecasts that the UK economy
will grow by 2% in 2017. The OBR also forecast that the economy will grow at a
slightly slower rate in 2018, before picking up to 2% in 2021.
2. Cutting borrowing and stabilising the
Britain has a debt of nearly £1.7 trillion – around £62,000 for every
household in the country.
In 2009-10 the UK borrowed £1 in every £5 that was spent. This year it is set
to be £1 in every £15.
Borrowing is forecast to be reduced by nearly three quarters by 2016-17.
3. £2 billion for adult social care over
the next three years
This will help councils to provide high quality social care to more people
and help to ease pressure on the NHS.
4. £425 million investment in the NHS in
the next three years
£325 million will be invested in a first set of the best local
Sustainability and Transformation Plans (STPs).
STPs are the NHS’s plans for improving patient services in local regions,
developed collaboratively by NHS service leaders and their local partners.
£100 million will go to A&E departments in 2017-18, to help them manage
demand ahead of next winter, and help patients get to primary care faster. For
example, it will provide more on-site GP facilities and more space in A&E
units for assessment of patients when they arrive.
5. Investment in technical education for
16 to 19 year olds rising to over £500 million
New T-levels for 16 to 19 year old technical students will be introduced
from autumn 2019. Students will be able to choose from 15 different routes such
as construction, digital or agriculture.
The number of hours of training for these students will increase by over 50%.
As part of the course, all students will take part in an industry work
The government will also provide maintenance loans for students doing
higher-level technical courses at National Colleges and Institutes of
Technology – like those available to university students.
6. £300 million investment for new
academic research placements
£90 million will provide 1,000 new PhD places, including in science,
technology, engineering and maths.
£210 million will create new fellowships, including programmes to attract top
global talent to conduct research in areas such as bioscience and
biotechnology, quantum technologies, and satellite and space technology.
7. Loans for part time and doctoral
students from 2018
The government will provide maintenance loans for people entering part time
degrees, and doctoral loans of up to £25,000 to support higher-level study.
8. £536 million for new free schools and
to maintain existing schools
£320 million will go to new free schools. Free schools are funded by the
government but set up by groups like parents, charities or community and faith
£216 million will be invested in school maintenance.
9. Free transport for children from
poorer families who go to selective schools
Children aged 11 to 16 who get free school meals or whose parents are on
the Maximum Working Tax Credit will get free transport to their closest
selective school, if it is between two and 15 miles away from their home.
Children aged 8 to 16 are already entitled to free transport to their closest
suitable school, if they live more than three miles away.
10. Tax-Free Childcare will soon be
available to working parents
Tax-Free Childcare will provide up to £2,000 a year in childcare support
for each child under 12.
Parents will be able to receive up to £4,000 for disabled children up to the
age of 17.
Parents of younger children will be able to apply for the scheme first, with
all eligible parents able to access the scheme by the end of the year.
Working parents in England will also be able to apply for an additional 15
hours of free childcare for three and four year olds, bringing the total to 30
hours a week.
11. New ways to protect consumers
The government will investigate ways to protect consumers from unnecessary
costs and inefficiencies, including: preventing
consumers being charged unexpectedly when a subscription is renewed or a free
trial ends making terms & conditions simpler and clearer including in
digital contracts, like when you sign up to a social network fining companies
that mislead or mistreat consumers
12. £270 million to launch the
Industrial Strategy Challenge Fund
Initial funding will support research and innovation in universities and
businesses, in areas like: developing artificial intelligence and robotics that
will work in extreme environments, like offshore energy, nuclear energy and
space designing and manufacturing better batteries for new electric vehicles
that will help improve our air quality improving medicine manufacturing
technologies to speed up patient access to drugs
13. Improving transport with the
National Productivity Investment Fund (NPIF)
The government is funding improvements to transport infrastructure,
£690 million for new local transport projects, to improve congestion on roads
and public transport
£220 million to improve congestion points on national roads, with £90 million
going to the North and £23 million to the Midlands
supporting local projects in the next twelve months like improvements on the
A483 corridor in Cheshire and on the Leicester Outer Ring Road
14. A new strategy to make the UK a world leader in
£16 million for a national 5G
Innovation Network to trial new 5G technology.
And £200 million for local projects to build fast and reliable full-fibre
15. A three-year NS&I Investment
Bond with a market-leading interest rate of 2.2%
The bond will be available for 12 months from April 2017.
The government announced the NS&I Investment Bond at Autumn Statement 2016.
It will be open to everyone aged 16 and over with the flexibility to save
between £100 and £3,000 over three years.
16. The Lifetime ISA will be available
from 6 April this year
The Lifetime ISA will allow younger adults to save up to £4,000 each year
and receive a bonus of up to £1,000 a year on these contributions. Funds can be
withdrawn tax-free to put towards a first home or saved until a person turns
17. Marking International Women’s Day
A new £5 million fund will go to projects celebrating the 100th anniversary
of the Representation of the People Act next year, and to educate young people
about its significance. The Representation of the People Act (1918) was the
first legislative step towards equal voting rights for men and women.
Working with businesses and the public sector, the government will also invest
£5 million to increase the number of returnships, helping people back into
employment after a career break.
And another £20 million will support organisations working to combat domestic
violence and abuse or supporting victims. This increases the total funding for
implementing the government’s Ending Violence Against Women and Girls Strategy
to £100 million by the end of Parliament.
18. Small Businesses and landlords under
the VAT threshold will have an extra year to prepare for Making Tax Digital
Unincorporated businesses (businesses owned privately by one or more
people) that have an annual turnover below the VAT registration threshold will
have until April 2019 to prepare before MTD becomes mandatory.
Under MTD, businesses will use digital software to keep tax records and update
19. £435 million to support businesses
affected by the business rates relief revaluation
This means no small business that is coming out of small business rates
relief will pay more than £600 more in business rates this year than they did
Funding for local authorities will allow them to provide £300 million of
discretionary relief to provide help to businesses most affected by the
And from April 2017, pubs with a rateable value up to £100,000 will be able to
claim a £1,000 business rates discount for one year.
20. The main rate of National Insurance
contributions (NICs) for the self-employed will increase
Currently, the self-employed may have to pay both Class 4 and Class 2 NICs:
Class 4 NICs at 9% are paid on profits between £8,060 and £43,000
Class 2 NICs are paid on profits of £5,965 or more
From 2018, Class 2 NICs will be abolished. Class 4 NICs will rise to 10% in
April 2018 and to 11% in April 2019.
Taken together, only a self-employed person with profits over £16,250 will have
to pay more as a result of these changes.
This better reflects the fact that the differences in contributory benefit
entitlement between the self-employed and employees are now small, following
the introduction of the new State Pension in April 2016.
In the summer, the government will also consider whether there is a case for
greater consistency in parental benefits between the employed and
21. Tax-free dividend allowance will be
reduced from £5,000 to £2,000 from April 2018
This will reduce the tax difference between the self-employed and those
working through a company. Typically, general investors will need over £50,000
worth of stocks and shares outside an ISA to be affected.
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