Political Headlines – Budget reaction and analysis

Today’s political headlines follow yesterday’s Autumn Budget and cover Hammond’s spending, Labour’s criticisms, the Brexit ‘double deal dividend’ and the digital services tax.

Hammond’s ‘giveaway’ Budget
The Times calls yesterday’s Budget ‘the biggest giveaway’ since the Conservatives came to power in 2010 as Hammond used his windfall from higher growth and lower deficit forecasts to ease austerity with £103bn of extra spending. Headline measures include tax cuts for 32m workers and funding for the NHS spending increase announced earlier in the year, as well as emergency cash injections for schools, freezes on beer and spirit duty and more money for Northern Ireland.

Labour criticises Budget for ‘broken promises’
The BBC reports that Labour has attacked claims by the Chancellor that austerity is ending, with Shadow Chancellor John McDonnell warning that benefit cuts are continuing and Jeremy Corbyn suggesting that the Budget was full of ‘broken promises’. The Resolution Foundation thinktank notes that changes to income tax thresholds will give the poorest families £30, compared to £410 for the richest.

Hammond promises Brexit ‘double deal dividend’
The Daily Telegraph says that Hammond promised a ‘double deal dividend’ if the UK reaches a Brexit deal with the EU as the economy would benefit from the ‘end of uncertainty’. However, he warned that an emergency Budget in the spring was possible if the outlook ‘changes materially’ and he would take ‘whatever action is necessary’.

Tech firms targeted with digital services tax
The Guardian reports that Hammond is targeting US tech firms such as Google, Facebook and Amazon with a digital services tax, as the UK can no longer wait for a global consensus on the route forward. He expects the tax to raise more than £400m a year, but the Office of Budget Responsibility believes that the major tech companies might pay just £30m each.

£3bn boost for Universal Credit
The Sun says that almost £3bn was spent on a rescue package for Universal Credit, reversing over half of the cuts made to the benefit by George Osborne. As a result, the paper calls Hammond ‘Mr Increditable’. The Chancellor claimed that 2.4m families would benefit from £630 more a year.

Budget welcomed by business groups
According to the Financial Times, the Budget was welcomed by business groups. The CBI said it offered ‘significant support for investment’ and the Federation of Small Businesses said that it was Hammond’s ‘first small-business friendly Budget’, particularly welcoming the freezing of the VAT threshold. However, business groups have also warned of the continuing uncertainty caused by Brexit. 

Hammond kills off PFI
The Times reports that Hammond has committed to no longer use PFI schemes following the collapse of Carillion earlier this year, with existing schemes to be managed by ‘centres of best practice’. According to the paper, the Treasury is looking at new funding models, such as a national infrastructure bank.

Unpopular measures hidden in the detail
The Daily Mirror reveals 13 details from the Budget it says Hammond ‘won’t want you to read’. They include the poorest in society not benefitting, a new plastic tax taking four years to introduce, a six-month delay to cutting stakes on fixed-odds betting terminals and a tax on vaping.

Our full Autumn Budget summary was sent to Vuelio Political Services clients yesterday. Stop missing out on quality intelligence.