This was sold as a budget ‘for all’, one that would be paid for by revenue rather than by borrowing. Pretty rich when the government is running the biggest deficit in UK history! The quote that was a true sign of how out of touch the Tories are, “we don’t want to burden younger generation with debt” while quoting current deficit per household is amounting to over £60k! We would like to cut the borrowing over 5 years by £23.5bn.
There was sensible measure like making sure the growing number of self-employed people see a rise in NI and taxation. This was not a dig at entrepreneurs but more stopping the use of companies employing people as self-employed to get around tax and benefits obligations. This will not raise huge sums but certainly hits the higher earner in society. What I not sure about was his comments referring to this costing the public sector, seems that the move was enough; it did not need to be justified.
The obligatory £425 million more for the NHS was issued as a token gesture. This is like handing out swimming trunks to sinking Titanic passengers. It’s so pointless it was hardly worth him mentioning it. While May oversaw reforming the police and seeing a reduction in crime while cutting costs, the Tories clearly think the NHS just needs to be more effective rather than giving it the money people believe it needs. The money they stumped up will be spent by the time Hammond is tucking into his congratulatory even meal for a well-delivered budget!
The GBP seems to take all the news quite well. This was quickly erased by the end of the speech as the ‘real world’ took note of the much more important US ADP employment figure. This is a precursor to Fridays NFP and with the world now expecting a March hike, the USD made session highs and the GBP gains against the USD were quickly erased. The GBP remains perilously close to 1.20 against the USD and with the rate hike nailed on if we see a good NFP on Friday, a new record low may be seen in the GBP. 1.15 may be just around the corner.
The other big measure was an interesting one, corporation tax. The government knows it is open to a drop in revenue by decreasing corporation tax, however, this seems to be a counter measure to whatever the real outcome of Brexit will be. A short term measure to keep existing business and to attract new ones. The real dangers will be to crown dependencies like Jersey and Gibraltar that have no or little corporation tax. The offshore world looks like it has the most to lose from Brexit and it will become increasingly under threat by its own protector – London.