Today in the House of Commons Chancellor of the Exchequer Philip Hammond presented his 2017 Spring Budget where he set out a plan for a “brighter future” as the UK leaves the EU. The budget provides a “strong, stable platform for Brexit” the Chancellor says.
Extra £2bn funding for social care
In his budget the Chancellor announced an extra £2bn in funding for social care in England over the course of the next three years to address a growing crisis in the area, with the first billion available in 2017/18 to help in the short term. The headline figure is welcome news to a struggling sector and will provide councils with additional funds to commission care packages.
However, it is not just about money but strategy, with the Chancellor also promising the government will set out their proposals in a Green Paper to put the social care system on a more secure and sustainable long-term footing. Hammond added the social care system and the NHS would need to work in a more collaborative, ‘joined-up’ way.
Care England’s Professor Martin Green said in a tweet ‘£2bn is welcome as long as Green Paper delivers reforms necessary to put the system on a stable footing.’
This increased focus on long-term sustainability of care provision and increased funding for the sector comes as a confidence boost for investors in care home developments in England.
A resilient UK economy
The Spring 2017 budget was an opportunity for the chancellor to set out his plan to reduce the deficit and improve the UK economy. Currently the economy is looking stronger than expected with the UK being the second-fastest growing economy in the G7 in 2016; employment is at a record high, and unemployment is at an 11-year low.
The Office for Budget Responsibility (OBR) has raised its economic growth forecasts for this year, expecting the UK economy to grow 2% rather than 1.4% offset by expectations of lower GDP growth for the two following years before rising to reach 2% once again in 2021 following the outcome of Brexit negotiations.
Added investment in technology & innovation
Mr Hammond also committed to “invest in cutting-edge technology and innovation, so Britain continues to be at the forefront of the global technology revolution” with funding for research into new technologies, including robotics, biotech and driverless vehicle systems, a 5G hub to trial the forthcoming mobile data technology and support for local “full-fibre” broadband network projects designed to bring in further private sector investment.
Investment in North and Midlands
The North and Midlands will see an increase in transport spending of £90m for the North; £23m for the Midlands and £270m for new technologies, £16m for 5G mobile technology and £200m for local broadband networks.
No relief for residential landlords
For residential buy-to-let landlords however there was no let up on the higher rates of stamp duty land tax on buy-to-let properties and the removal of tax relief on mortgage interest.
As previously announced, from April, buy-to-let investors won’t be able to offset the full cost of their mortgage interest against rent. Considering these recent changes, commercial buy-to-let opportunities – which are unaffected by the recent stamp duty increase – are looking like an appealing alternative.
Dividend tax break slashed from £5k to £2k
The £5,000 tax-free dividend allowance introduced in spring 2016 by ex-Chancellor George Osborne to encourage shareholder investment is to be slashed to £2,000 from April 2018. The measure, affecting small business owners and investors, will come into force in April 2018, raising £2.63bn by 2021-2022. Dividend income paid on shares held in a stocks and shares ISA will remain tax free.
Other key budget announcements
Also in the budget, other key announcements included £435million of extra help on business rates, Corporation Tax to fall to 19% from April and to 17% by 2020, plus a National Insurance rise by 2% for self-employed workers by 2019.
Concluding his speech, the Chancellor said “Today, we reaffirm our commitment to invest in Britain’s future; and we embark on this next chapter of our history, confident in our strengths, and clear in our determination, to build a stronger, fairer, better Britain. I commend this Budget to the House.”
The next Budget will take place in the autumn 2017. The HM Treasury Spring Budget 2017 is available as a document for download.