Budget 2017: Hamming it Up like Hammond
The Chancellor Philip Hammond’s first autumn budget was delivered with jokes and a great conclusion: the government will abolish stamp duty for properties up to £300,000 for first time buyers, and on the first £300,000 of properties up to £500,000. This will help to solve the housing crisis and assist people get on the housing ladder. Political commentators joked that Hammond’s budget did served its single purpose, which was basically him retaining his job. As he laughed at the expense of Michael Gove, Jeremy Clarkson and himself, Hammond showed awareness of the government’s position. Surrounded by Brexiteers ready to attack him, Hammond has done rather well for himself, most importantly, he avoided making any errors.
But, there are clouds on the sky. According to Jonathan Freeland, with growth being slow, productivity figures looking weak and the deficit still there, at least until 2023, this is an “epic failure” for a party that prides itself for being the “custodian of fiscal rectitude and economic competence.” As Freedland wrote: “Hammond may have avoided tripping on any obvious landmines. But thanks to a weakened economy, and the prospect of Brexit, the battlefield ahead still looks grim.”
Housing measures and Britain’s housing problems
Housing was the focus of this budget. As Philip Hammond announced: “With effect from today for all first-time buyer purchases up to £300,000, I am abolishing stamp duty altogether." The reduction means that £5,000 will be deducted, and will help purchasers in areas where prices are high, rather than where they are cheaper. In terms of housing, the Chancellor said that he will be providing £44bn of capital funding and loans to get more homes built in a period of five years. £34m will also be offered for developing construction skills.
Hammond’s measures to exempt first-time buyers from stamp duty was an attempt to attract young voters. However, with many young people coming out of university with debt and unable to get a permanent, full-time job, their priority is how to get by, rather than whether they can afford a house. Because they cannot.
Responding to the budget, Jeremy Corbyn said that the government’s budget was nothing but “accounting tricks and empty promises.” Talking about the budget highlight and the house-building measures, he said: “we’ve been here before. The government promised 200,000 starter homes three years ago. Not a single one has yet been built in those three years. We need a large scale publicly funded house building programme, not this government’s accounting tricks and empty promises.” For Corbyn, the budget shows that “this is a government no longer fit for office”: “We were promised with lots of hype a revolutionary budget, the reality is nothing has changed. People were looking for help from this budget and they have been let down: let down by a Government that, like the economy they have presided over, is weak and unstable and in need of urgent change. They call this a budget fit for the future, the reality is this is a government no longer fit for office.”
Experts from the property consultancy Rapleys have also commented on the budget and said that it is not a “magic bullet” to solve Britain’s housing crisis. Jason Lowes said: “While many in the property industry will be buoyed by the reforms to Stamp Duty Land Tax for first time buyers and Business Rates, the lack of progress on planning risks undermining what was, we were led to believe, intended to be a blockbuster housing Budget.”
The UK CEO of Finder.com, a personal finance site, added that Hammond’s offering wasn’t a real incentive and used Australia as an example: “We can learn from our friends in Australia who offered significant grants to first-time buyers of between £4,000 and £10,000, this level of investment proved to make a real difference to the number of first homes bought. As it stands, first-time buyers in the UK are going to have to rely on the delivery of the Governments house building investment and initiatives to deliver affordable housing, but this could take some time.”
For others, the government’s commitments were favouring the wrong kind of people. With low income families, as many suggested, lifting the freeze and delivering affordable housing for people who really needed, would have been more reasonable than helping those who don’t really struggle.
With unemployment, increasingly lower living standards, and families struggling to meet their daily needs, it is definitely difficult to look at the bright side of the budget.
As the Guardian’s Graeme Wearden put it,
"the chancellor tried to distract us with some jokes, the stamp duty rabbit, and even a packet of cough sweets from the PM. But the underlying message is that the UK economy is rather weaker than we thought back in March. Growth is going to slow steadily over the next three year - not what’s needed, as the country faces the Brexit unknown. The new growth forecasts mean that Britain’s economy is now expected to grow at below its long-term trend growth until well into the next decade."