Autumn Budget 2018: Our Summary
Yesterday’s Budget was always going to be judged against Theresa May’s bold claim earlier this month that “austerity is over”. The question was not only how far and how fast the Budget might move towards this goal, but how it would be paid for. The mood music from the Prime Minister and Chancellor had been that taxes would need to rise; recent news, however, had given Phillip Hammond more room for manoeuvre. Tax revenues have been better than expected and spending lower, delivering over £11bn more headroom as a result of reduced public borrowing.
Two of the biggest spending announcements had already been made by the Prime Minister ahead of the Budget – an additional £20bn over five years for the NHS, plus freezing fuel duty for another year costing over £800m. A package of measures, including further business rates relief, was aimed at supporting small high street retailers as they manage the change towards a more digital economy, alongside a move towards introducing a new digital services tax targeted at large tech companies. Combined with total public investment expected to grow 30% over the next five years, Phillip Hammond will hope his key message, that “austerity is coming to an end, but discipline will remain”, will hit home and reap political dividends.
Brought forward to avoid clashing with the expected final negotiations on Brexit (not to mention Halloween) – and perhaps to minimise the possible withdrawal of DUP support for key tax raising measures – this Budget was significantly more ambitious than many expected. But it also comes with a massive caveat; unless a good deal with the EU is reached, the Chancellor will need to revisit his Budget.
The Red Book did not contain any surprise announcements around capital taxes and nationally important heritage, but two important consultations were flagged on the horizon: on the taxation of trusts, and on the criteria under which self-catering and holiday lets become chargeable to business rates rather than council tax. We will be keeping an eye out for both, and responding on behalf of our house members. A proposed cut in business rates for retail properties with a rateable value below £51,000, a planned review of wedding venues and new funding for digital infrastructure could also impact many of the historic houses we represent.
House members can read our detailed analysis and round-up of all Budget announcements on the members’ section of our website here.