BMF Policy & Public Affairs Manager Brett Amphlett provides a detailed snapshot regarding the ‘essentials’ and implications of the 2017 Budget for the Federation’s merchant members.
HOUSING
The Chancellor is making available another £15.3 billion of new taxpayer’s money as capital funding, loans and guarantees – totalling £44 billion over the next 5 years – including:
- £8 billion of new guarantees for private housebuilding and purpose-built private rented sector
- a further £2.7 billion to more than double the current Housing Infrastructure Fund
- a further £1.5 billion for Home Building Fund that provides loans for SME housebuilders
- £630 million for Small Sites Fund to speed up the delivery of 40,000 homes
- £400 million for estate regeneration in run down areas
- £1.1 billion for a new Land Assembly Fund to unlock strategic sites, including new settlements and urban regeneration schemes
Mr Hammond set a target of 300,000 net additional homes a year on average by the mid-2020s. He is lifting the Housing Revenue Account borrowing cap on local authorities in areas of high demand to free them to build council houses. The Chancellor also spoke of an identified need for up to 1 million new-build homes in the corridor between Cambridge, Milton Keynes and Oxford by 2050. As a first step, there will be a deal with Oxfordshire for 100,000 homes by 2031.
PLANNING AND DEVELOPMENT
The Chancellor said the slow pace of housing completions means there is now reason to intervene to ensure planning permissions are built out faster. New legislation and policies will be pursued in areas such as:
- where a local council has failed to adopt an up to date Local Plan, Whitehall will use powers to force councils to do so
- legislation to make it easier for local authorities to work together to build new garden villages and market towns of between 1,500 to 10,000 homes
- increasing housing density in urban areas (esp. transport hubs) and with greater use of compulsory purchase powers to assemble the sites
- strengthening the Housing Delivery Test with tougher consequences where planned homes are not built
- policy changes on converting empty space above high-street shops; converting retail premises into housing; and new rights to allow commercial buildings to be demolished and replaced with homes
- land-banking: a review will be done into why there is a significant gap between planning permissions and housing starts.
TRAINING AND SKILLS
The Chancellor is making available an additional £34 million to develop construction skills around the country to ensure there is a trained workforce to build the homes.
No major changes to the Apprenticeships’ Levy but a renewed commitment to look at how to make it more flexible so it can be spent up & down the supply chain.
£20 million of new money to support further education colleges to prepare for the introduction of the new T-Level technical qualification for 16 to 19-year-olds.
BUSINESS TAXES
No changes in Value-Added Tax rates and (despite newspaper speculation) no change to the current registration threshold of £85,000 for the next 2 years.
National Living Wage: rate increases from April 2018 by 4.4% from £7.50 to £7.83 per hour.
National Minimum Wage: rates increase from April 2018 as follows:
- 4.7% increase in 21-24 year old rate from £7.05 to £7.38 per hour
- 5.4% increase in 18-20 year old rate from £5.60 to £5.90 per hour
- 3.7% increase in 16-17 year old rate from £4.05 to £4.20 per hour
- 5.7% increase in apprentice rate from £3.50 to £3.70 per hour
Aggregates Levy: the rate will remain frozen at £2 per tonne in 2018-2019 but will return to index-linking in the longer term.
PROPERTY TAXES
Business Rates: the planned switch to link rates to Consumer Prices Index (not Retail Prices Index) will be brought forward to April 2018. The frequency of revaluations will take place every three years following the next revaluation, currently due in 2022.
Stamp Duty Land Tax: the price at which property becomes liable will go up to £300,000 for first time buyers to help young people buy a home. This relief applies on the first £300,000 of properties worth up to £500,000 too.
Council Tax: local councils will be able to apply 100% council tax on empty homes to encourage owners to bring them back into habitation.
TRANSPORT
No increase in Road Fuel Duty – main rate for petrol & diesel will be frozen for another year.
Vehicle Execise Duty: from April 2018, rates for cars, vans and motorcycles will increase in line with RPI. But both HGV VED and Road User Levy rates will be frozen in 201-2018.
Air quality: the Government will provide £220 million for a new Clean Air Fund to help local authorities in England with the most serious pollution problems.
Electric vehicles: from April 2018, there will be no benefit-in-kind charge on electricity that employers provide to charge workers’ electric vehicles.
The BMF notes that this summary is not intended to be full, in-depth analysis and commentary. Only those aspects most directly relevant to its members’ interests are shown here. The BMF will keep its members informed (via “Business News” and other channels) if the situation changes as merchants prepare to take important investment or operating decisions.
Related posts from PBM on the 2017 Budget:
