Philip Hammond has vowed to give the UK a “strong and stable platform” for Brexit negotiations as he delivered his first spring Budget. In what is expected to be the last Budget announcement before the country provides formal notice of its departure from the EU, the Chancellor urged that there was “no room for complacency”, in spite of increasing growth forecasts from the Office for Budget Responsibility, which pushed up its expectations for growth from 1.4 per cent to 2 per cent for 2017. It was no surprise that Hammond confirmed tax rises for the self-employed, company directors and smokers as part of the lunchtime announcement, as he pledged to help struggling families who have continued to bear the brunt of ongoing cuts to public, social and healthcare services, over the next three years.
And while I wholeheartedly support any move which helps ordinary working families and those who are struggling, I – along with many other business leaders – am concerned that the people who seem to be partly footing this bill are our country’s crucially important entrepreneurs. An overhaul to National Insurance contributions for the self-employed will cost an estimated 60 pence per week on average, looking set to raise £145 million per year for the Treasury. It’s likely the Chancellor plans to use this as a safety net for possible financial trouble after Britain exits the EU. But will this deter our entrepreneurial minds from starting up businesses and becoming self employed? I sincerely hope not.
On the other hand, seemingly in support of big business, the Chancellor confirmed corporation tax will fall to 17 per cent by 2020, the lowest in the G20, which while is good news for some, will leave others wondering where his intentions lie when it comes to helping honest, working people. Good news came in the form of further announcements for infrastructure investment, with plans to inject £90 million in transport in the north. But with the south still seeing far more investment than northern businesses, is there really room to call this a success?
Workers aged over 25 are also set to be impacted by the official launch of the National Living Wage in April, which will see their hourly rate rise from £7.20 to £7.50. The increase will provide a significant boost to the pay packets of the lowest income workers, but its effects on business owners already struggling to cope with the introduction of automatic pension enrolment remains to be seen.
Unsurprisingly to me, the Budget announcement saw Hammond keep his cards remarkably close to his chest regarding the country’s separation from the EU, despite the fact there is potentially just a week to go before Theresa May formally launches the Brexit process. While I am not surprised at all by this, I believe it’s high time the government started to provide concrete evidence of how Brexit will impact businesses and consumers alike. On the whole, the Budget has failed to provide any real certainty regarding the future of the economy and yet again I’m concerned it’s just another stalling tactic by a government that lacks the strong plan we so desperately need in order to overcome the challenges that await during these turbulent times.