Updates from Chancellor Philip Hammond’s Budget speech to the Commons as it happened
Jeremy Corbyn stands up to respond. ”As this budget unravels the reality will be that many people are no better off and misery will continue,” he begins. “It’s a record of failure with more to come. Economic growth revised down, business investment revised down, productivity growth revised down. What sort of future is that?”
He’s again talking positively - maybe he’s looking for “feelgood Phil” headlines? “Boundless opportunity - to build a Britain fit for the future,” he says. And that’s it. Commons more than usually boorish in response - prolonged cheering
Here’ the big vote-grab - he’s abolishing stamp duty for first time buyers, as predicted by some, on properties up to £300k in value. Also apply to £300k of the price for homes up to £500k. He says this will help 95% of first time buyers. This will apply immediately. A good Christmas present for some, certainly.
“The dream of home ownership will become a reality once again.” I want to do more to help first time buyers, he adds
New town development corporations will be used to deliver five new Garden Towns. Hammond says backing the vision of Oxford-Milton Keynes-Cambridge corridor report from last week. “A dynamic new growth corridor for the 21st century”, he says
The HCA will expand to become Homes England - including a planning team, CPO team and more powers
He’s now on to planning. As expected, green belt protections remain.
He says: “A significant gap between the number of planning permission granted, and the number built out.”
“I am establishing an urgent review on this” - delivering an interim report in time for spring statement. If the report finds land being withheld for commercial reasons “we will intervene”, he says.
Here’s the big number: £44bn over the next few years to get net additions up to 300,000 per year. This includes doubling the housing infrastructure fund; £1.1bn for new urban sites; £8bn of new financial guarantees for private housing and the private rented sector and £34m for construction skills.
Hammond says government already made a remarkable achievement. But no single magic bullet to do more. If we don’t increase the supply of more land new money will simply inflate prices. Call to rebuild the SME housebuilder sector. It’ll require money, reform and intervention.
”Successive governments have failed to build enough homes to meet the homeowning dream this country rightly proud of,” he says. “by choosing to build, getting on the housing ladder is a reality for your future.”
He says: “However successful we are economically, there is one area today where young people will feel concerned about their long term prospects”.
Consultation on longer tenancies in the private sector, and legislation to allow charging of council tax on empty properties
If any local authority cannot access funding to pay for fire safety work they should contact the government (this isn’t the same as saying central government will pay for this work as standard)
How he’s on to housing market. But first is talking about Grenfell - he’s providing K&C with £28m for mental health services, regeneration of surrounding areas
Hammond says he will consult on changing the small business threshold for collecting VAT
£4.8bn from further clampdown on tax avoidance. Committed to continuing to reduce corporation tax. But freezing certain allowances.
Lots of mention so far of further spending promises - very little on where the money will come from. Now he’s on to taxes - so we may hear more now.
An additional commitment of immediate resource funding to the NHS of almost £3.75bn - this follows very public bid by NHS chief executive Simon Stevens for £4bn extra.
Hammond’s performance so far is confident and almost jovial. Unless major problems unearthed after the statement, so far this feels likely to cement Hammond’s position and reduce pressure on him.
Petrol and diesel fuel duty rise again cancelled - something that’s cost the government £46bn since 2010.
Duty on wines, spirits and beer to be frozen, except for so-called “white cider”.
Personal tax allowance to rise (again) to £11,800. A full time worker on the minimum wage with take more than £3k more than in 2010.
Increased “targeted affordability funding” to support rent payments in high value areas. Significantly, he says he will “return to the subject of housing later.”
He’s removing the 7-day wait. Advance payments to allow receipt of benefit within 5 days of claim. A £1.5bn package to address concerns about the benefit. Further details tomorrow.
Now he’s on to Universal Credit. “I recognise the operational concerns”.
Begin negotiations for growth deals for north wales and mid wales. Starting work on a Belfast city deal as first of a number in Northern Ireland.
Hammond now announces a raft of specific industry investments and city deals. Then making available over £1bn of low-interest lending for local authorities to spend on infrastructure. He’s not clear if this is a new fund.
Now announcing the pre-trailed £1.7bn Transforming Cities Fund. Also - something new here - more money for HS2 to ensure it co-ordinates properly with Northern Powerhouse rail
Hammond announces a new national re-training scheme - to boost digital skills and support training for the construction sector. Hammond calls it a historic partnership between the government, CBI and the TUC. This could be significant for construction skills.
Hammond talk’s apprentices - no news hear, but also says £20m for FE colleges to support “T-Level” qualifications.
Raises the prospect of taxing “single use plastic” to reduce waste.
Now raising taxes on new diesel cars, to create a £220m air quality fund.
Now he’s on to driverless vehicles - very symbolic of the modern economy he says, to much hilarity (MPS think it is symbolic of the Tory party/Labour party, depending on what side of the house they sit)
Hammond now talking about hi-tech industry investment he says will support industries of the future. No mention of construction there…
Productivity the central mission of the Treasury. Hammond says the National Productivity Investment Fund to be expanded by another year, and be upped to more than £30bn (from £23bn).
Business secretary is to present industrial strategy white paper in the next few days.
Debt to fall from over 86% of GDP to less than 80% of GDP by 2023. Hammond is presenting this as a victory.
Debt will peak this year, before reducing from next year onwards, the OBR forecasts. Hammond says he is using some of the headroom created by his more flexible fiscal rules
Hammond reels off OBR growth forecasts - all lower than previously predicted
He says: “Regrettably our productivity performance continues to disappoint”. Today OBR is revising down predictions for productivity, output and GDP growth.
OBR forecasting another 400,000 people in work.
He is setting up: “An outward looking free-trading Britain, fit for the future. In this budget we’ll be laying the foundations”.
“We choose the future.”
Brexit has already cost £300m in additional spending, and Hammond now allocating a further £3bn to meet challenges ahead.
Says he wants early certainty on an implementation agreement that allows business to plan, and the government will make this a priority in the weeks ahead.
In a nod to his eurosceptic critics, Hammond talks about “embracing the change ahead.”
Hammond finally gets to the dispatch box. “Economy continues to confound those who continue to talk it down,” he says. “Future full of new opportunities.”
One question that will be interesting to answer when Hammond does finally stand up, is whether he is on course for spending on infrastructure to meet the 1-1.3% of GDP level promised in his autumn statement
Still no Hammond - currently Theresa May is answering questions related to the Leigh-on-Sea branch of the British Legion. Time to move on perhaps?
Theresa May continuing to take questions - budget anticipated shortly.
One of the other big questions today is the extent to which Philip Hammond uses the leeway provided by the reclassification of the housing association sector as part of the private sector last week, which takes £70bn off the UK’s national debt. While this was only added to national debt a couple of years ago and the government argued it was a temporary blip, it may be that Hammond sees this decision as giving him additional borrowing headroom for investment in housing.
A further bit of context for the speech, due in just ten minutes now - Philip Hammond’s shadow, John McDonnell, is pledging he would invest £250bn over the next 10 years to improve infrastructure, housing and productivity.
ITV political editor Robert Peston has just tweeted that he understands the housing measures are “a bit of a hotch potch”. “The challenge will be working out how they fit together,” he says.
Other areas of interest to the industry that may be mentioned are land taxation, infrastructure and skills training.
The government put-off responding to the review of the Community Infrastructure Levy published in January until the Budget, while since then the Conservative manifesto talked about introducing measures to capture value held in development land. Last week communities secretary Sajid Javid said to expect an announcement on this issue “soon” – so the two things could be wrapped together.
At the last Autumn Statement Hammond announced a £23bn National Productivity Investment Fund designed to fund infrastructure to improve the economy, including by supporting new housing sites. Since then progress on infrastructure has been mixed, with positive signals on Crossrail 2 but a lack of progress on Northern Powerhouse rail projects and the new runway at Heathrow.
Earlier this week Hammond, alongside Theresa May and business secretary Greg Clark, has already unveiled a £1.7bn transport fund, called “Transforming Cities”, designed to improve local connectivity and productivity.
Speaking on the Andrew Marr show on Sunday Hammond mentioned the need to “train construction workers” but it is unclear whether the budget will include specific measures on this.
Finally, it is possible Hammond will make good on his promise of a year ago to unveil a “pipeline” of PF2 projects for the industry, though it is not now expected, given he missed his original opportunity to do so in March.
So, what can the industry expect? Much of the pre-briefing has been about measures to address the housing crisis, with the chancellor using weekend interviews to outline a new target to build an average of 300,000 homes a year in the UK. Enabling young people to get on the housing ladder is seen as vital to addressing increasing concerns over intergenerational unfairness, by giving people a stake in society.
However, exactly how this will be achieved is still unclear. He is expected to kickstart a review into the reasons behind granted planning permissions not being built out, and has talked about using “state intervention” to ensure delivery of projects. There has also been discussion of funding for remediation of stalled sites, additional CPO powers for councils and guaranteed loans for small builders.
Sajid Javid’s pitch for £50bn of funding for housing was, however, initially somewhat rebuffed, though housing associations have called on government to help them set up a fund of that size to deliver “sub-market” housing.
Speculation continues that Hammond will cut stamp duty, perhaps entirely, for first time buyers. However, he has refused to comment on this issue, and the Treasury may decide that any reduction in taxes will just result in prices going up to compensate.
Good morning and welcome to Building’s LIVE coverage of chancellor Philip Hammond’s second budget, the first Budget to take place in the autumn for over 20 years.
To say this statement is keenly awaited is something of an understatement. While Budget speeches are always vital platforms for governments to set out their vision on a day that much of the public is actually listening, the state of Theresa May’s embattled minority administration makes this platform more important than most.
With the chancellor’s enemies (not least those eurosceptics within his own party) waiting to pounce on every move, it is also seemingly a do or die moment for Hammond himself. Speculation is rife that any similar gaffe to that in his spring budget, where proposed measures were withdrawn within a week after a backbench backlash, could cost him his job.
As ever, the chancellor is being asked to perform a tricky balancing act. With a reputation as a dry numbers man, many in his own party are hoping “spreadsheet Phil” Hammond can instead set out a bold positive vision for the UK post Brexit. But the reality is that Brexit and the UK’s worsening productivity problem is acting as a drag anchor on the UK economy, reducing tax receipts and therefore his legroom to splash out on measures to address what are seen as the big political challenges outside of Brexit – housing, social care and public services more widely.
Hammond will stand up to make his speech at 12.30 after prime minister’s questions, and Building will have all the news, reaction and analysis right here as it happens.