Simpkins Edwards: reaction to Autumn Budget 2017

Adrian Hemmings, partner at Simpkins Edwards LLP, commented:

“The Chancellor’s Autumn Budget contained no big announcements on spending cuts or tax rises. Even the expected rise in diesel car taxation, which will hurt individuals, will do little to convince owners to change their vehicle. Instead, today’s Budget was all about putting money into projects and the regions.  Sadly, there was no mention of the South West.  Instead, the Midlands Engine, Northern Powerhouse, Ireland, Wales and Scotland all received notable funds.

“What was abundantly clear is that this Budget was focussed on supporting house building.  The Chancellor announced that he plans to increase supply of land and support for SME housebuilders through planning reform and intervention; his goal is to deliver over 300,000 new homes a year.  He also set aside £400m to regenerate housing estates and £1.1bn to unlock strategic sites for development.  However, the big surpise was Philip Hammond’s inference that if the private sector chooses not to build, the Government will.

“For a party centred on the free market, there was an astonishing level of references to intervention, including the possibility of compulsory purchase of land banked by developers for financial reasons, forcing housebuilders to build.  There was even pressure on owners of empty properties to fill them or face 100% council tax rate.

“You could view this as his big move.  The Great Depression of the 1930’s was cured, in part, by rearmament.  Here, the Chancellor appears to be attempting to cure the downturn of the noughties and the impact of Brexit through investment in infrastructure and through intervention in the housing market.

“To back that up, Phillip Hammond pulled the now customary rabbit out of the hat with the abolition of Stamp Duty on first time house purchases up to £300,000.

“This will help rekindle the dream of home ownership for a new generation of first time buyers.  It’s a clever move that saves thousands of pounds on the purchase of a new property.  As a percentage of the money you have to save up to get on the housing ladder, it’s a significant amount and should prove popular with the electorate; notably those that cost Theresa May her majority at the last election.”