Hammond pledges extra £2bn to help tackle social care crisis
The crisis in social care and pressure to help firms facing business rates hikes forced Chancellor Philip Hammond to promise billions in extra funding as he delivered his first Budget.
Some £2 billion was announced for social care in England over three years – below the levels demanded by some campaigners – while a £435 million package will ease the burden on firms facing huge hikes in business rates.
But with Mr Hammond ruling out an increase in borrowing and insisting that Britain must get back to “living within its means”, he announced a National Insurance increase for higher-earning self-employed workers which will rake in £145 million a year.
Labour leader Jeremy Corbyn dismissed the Chancellor’s statement and accused him of “utter complacency” about the state of the economy, public services and the lives of millions of Britons.
Cash-strapped councils have struggled to fund social care, increasing strain on the NHS as hospitals struggle to discharge patients if they cannot be properly looked after in the community.
The three-year deal involves £1 billion in 2017/18 as Mr Hammond acknowledged “the system is clearly under pressure and this in turn puts pressure on our NHS”.
He also said ministers would set out plans for the future financing of the social care system later this year – but stressed this would not include a so-called Death Tax levied on estates.
The Chancellor also announced a £100 million plan to help A&E units next winter by funding triage projects in English hospitals.
Referring to the Tory victory over Labour in the Copeland by-election, he said: “We are the Government of the NHS.”
In response to the campaign for measures to ease the impact of the business rates revaluation, Mr Hammond set out a £435 million package – including a £1,000 cut for most pubs.
Committing to longer term changes to the system, including better ways to tax online firms, the Chancellor acknowledged that the business rates revaluation had created some “hard cases”.
Under his package of reforms, he said firms set to lose small business relief would benefit from an additional cap on bill rises, limiting hikes in monthly bills to £50 for a year.
Pubs with a rateable value of less than £100,000 – some 90% – will be given a £1,000 discount on their rates in 2017.
Councils will also be given a £300 million fund to deliver “discretionary relief” to hard-pressed firms in their areas.
Setting out the reforms to National Insurance contributions, Mr Hammond said higher-paid self-employed workers will face rises of around 60p a week, raising an extra £145 million a year for the Exchequer by 2021-22.
Mr Hammond said the Budget sets out a plan for a “brighter future” as the UK leaves the European Union.
With Prime Minister Theresa May expected to start the formal Brexit process within days, the Chancellor told the Commons: “As we start our negotiations to exit the European Union, this Budget takes forward our plan to prepare Britain for a brighter future; it provides a strong and stable platform for those negotiations.”
He added: “We are building the foundations of a stronger, fairer, more global Britain.”
The Office for Budget Responsibility (OBR) forecasts provided him with a short-term boost, sharply upgrading projected growth from 1.4% to 2% for this year.
But the fiscal watchdog outlined a more gloomy picture over the coming years – as the UK actually leaves the EU.
It downgraded next year’s growth from 1.7% to 1.6% and slashed forecasts for 2019 from 2.1% to 1.7%, before predicting 1.9% in 2020 and 2% in 2021.
On the public finances, the OBR outlined a brighter picture, with borrowing in 2016/17 expected to be £16.16 billion lower than autumn forecasts at £51.7 billion.
It also tweaked deficit forecasts from £59 billion to £58.3 billion for 2017/18, from £46.5 billion to £40.8 billion for 2018/19, from £21.9 billion to £21.4 billion for 2019/20, from £20.7 billion to £20.6 billion in 2020/21 and from £17.2 billion to £16.8 billion in 2021/22.
In a speech littered with jokes – despite being nicknamed “Spreadsheet Phil” because of his usual dry style – Mr Hammond announced:
:: Transport spending of £90 million for the North and £23 million for the Midlands to address pinch points on roads, and a new £690 million competition for English councils to tackle urban congestion.
:: The NHS will get £325 million to implement controversial sustainability and transformation plans.
:: There was no change to previously planned upratings of duties on alcohol and tobacco, but a new minimum excise duty is introduced on cigarettes based on a packet price of £7.35.
The Budget will also mean £350 million for the Scottish Government, £200 million for the Welsh Government and almost £120 million for an incoming Northern Ireland Executive.
With Mrs May attempting to see off the potential for a second Scottish independence referendum, Mr Hammond said his package was “demonstrating once again that we are stronger together in this great United Kingdom”.
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