London – by Chiara Fiorillo
After the vote to leave the European Union, the British government is dealing with a lot of important decisions, especially regarding economy. Philip Hammond, Chancellor of the Exchequer since last July, has just published what he called his “first (and last)” Spring Budget.
— Philip Hammond (@PHammondMP) March 8, 2017
The changes to National Insurance the Chancellor did are expected to hit 2.5 million people, especially low paid earners. According to critics, this budget plan will mainly hit cabbies and fast-food delivery drivers.
Presenting the budget for 2017, Mr Hammond said this plan will prepare Britain for a “brighter future”, by extending opportunities to young people and delivering further investments in public services. “We are building the foundations of a stronger, fairer, more global Britain,” he said.
The main expenses include, The Independent reports, a £435m package of help for firms to play business rates, £2bn for social care, £330m for hospitals, a £120m fund to ease pressure in A & E departments, more than £1bn for new free schools and £260m to repair existing schools.
Mr Hammond also announced a reduction in the amount of dividends for business owners (from £5000 to £2000) that they can receive from their firms before tax. There has also been an increase in VAT for people making calls from the EU. Some critics warned of a potential tax rise for diesel car drivers.
According to some forecasts released by the Office for Budget Responsibility, Brexit will contribute to a lower growth in 2018-19, 2019-20 and 2020-21. According to official documents, the current growth forecasts are based on a policy that will not push immigration down as Theresa May has declared she wants to do.
This Spring Budget comes after an announcement, made by the Institute for Fiscal Studies, which warned that the amount of tax paid in the UK may soon reach the highest level in 30 years. However, the new rates will take effect in April, so there are still some weeks left to understand and forecast what will happen in a relatively short time.