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Budget 2017: Stamp duty abolished for first-time buyers as Hammond reveals growth forecast cut

Stamp duty for all first-time buyer purchases up to £300,000 is to be abolished immediately and an extra £2.8 billion pledged to the NHS in England, Chancellor Philip Hammond has announced in his Budget speech.

But the Chancellor also revealed that the outlook for productivity growth, business investment and GDP growth has been downgraded.

Labour leader Jeremy Corbyn condemned the Budget, saying it was a "record of failure with a forecast of more to come".

The Office for Budget Responsibility (OBR) downgraded its forecasts as a result of poor productivity and now expects to see GDP grow 1.5% in 2017 - down from the 2% forecast in March.

"Regrettably our productivity performance continues to disappoint," Mr Hammond said.

ITV News Business Editor Joel Hills said the downgrades were "very significant".

Other key announcements included:

  • A £1.5 billion package to cut the waiting period for Universal Credit payments and to make it easier for claimants to receive an advance
  • An extra £3 billion will be set aside over the next two years for Brexit preparations
  • New diesel cars failing to meet the latest emissions standards will face a tax increase in April
  • The National Living Wage will rise 4.4% in April, from £7.50 an hour to £7.83
  • The Government will investigate how the tax system and charges on single-use plastic items can reduce waste
  • Support for electric vehicles through the establishment of a new £400 million charging infrastructure fund, an extra £100 million in Plug-In-Car Grant

Watch the Chancellor's statement in full

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STAMP DUTY

The Chancellor said he had received representations for a temporary Stamp Duty holiday to first time buyers, but said "that would only help those ready to purchase now".

"So, with effect from today for all first-time buyer purchases up to £300,000, I am abolishing stamp duty altogether," Mr Hammond said.

"To ensure that this relief also helps first time buyers in very high price areas like London, it will also be available on the first £300,000 of the purchase price of properties up to £500,000."

The Chancellor said the move would "revive the home-owning dream in Britain".

NHS

The Chancellor pledged an extra £2.8 billion to the NHS in England.

Acknowledging the NHS is "under pressure right now", Mr Hammond said £350 million would be made available immediately "to allow trusts to plan for this winter", £1.6 billion in 2018/19 and the rest the following year.

ITV News National Editor Allegra Stratton said the pledge was "well short" of demands from the NHS.

GROWTH DOWNGRADE

  • Video report by ITV News Business Editor Joel Hills

The OBR cut forecast growth for 2017 from 2% to 1.5%, the Chancellor said.

Forecasts have also been cut:

  • From 1.6% to 1.4% for 2018
  • From 1.7% to 1.3% for 2019
  • From 1.9% to 1.3% for 2020
  • From 2% to 1.5% for 2021

ITV News Business Editor Joel Hills described the downgrades as "colossal".

The Chancellor said he would use some of the headroom in his financial rules to "support our key public services" and keep taxes low.

Borrowing is forecast to be £49.9 billion this year - £8.4bn lower than forecast at the Spring Budget - and will fall every year to £25.6 billion in 2022-23 - "its lowest level in 20 years".

As a percentage of GDP, debt will peak at 86.5% this year before falling to 79.1% in 2022-23 - "the first sustained decline in debt in 17 years".

The OBR expects debt to peak this year and then gradually fall as a share of GDP, while inflation is expected to peak at 3% in this quarter before falling back towards target over the next year, the Chancellor said.

UNIVERSAL CREDIT

The Chancellor bowed to pressure over Universal Credit with a £1.5 billion package to cut the waiting period for payments and to make it easier for claimants to receive an advance.

Mr Hammond said Universal Credit entitlement will start on the day of the claim and ensure any household needing an advance can access a full month's payment within five days of applying.

BREXIT

The Chancellor announced an extra £3 billion would be set aside over the next two years for Brexit preparations and that he "stands ready to allocate further sums if and when needed".

Mr Hammond said negotiations with Brussels were entering a "critical phase" as he promised to meet the challenges facing the economy "head on".

He said early progress in trade talks would be "one of the biggest boosts we can provide to businesses and families".

OTHER ANNOUNCEMENTS

Road tax for diesel cars that do not meet the latest standards is to rise in April and the existing diesel supplement in Company Car Tax is also going up, the Chancellor confirmed.

Mr Hammond said such vehicles will be subjected to a one-band increase in the first year vehicle excise duty (VED) rate.

VED is based on a vehicle's CO2 emissions and the cost for the first 12 months ranges from zero to £2,000.

The fuel duty rise for petrol and diesel vehicles scheduled for April was cancelled.

Credit: PA

The Government will also investigate how the tax system and charges on single-use plastic items can reduce waste

"We can’t keep our promise to the next generation to build an economy fit for the future unless we ensure our planet has a future," Mr Hammond said.

As expected, a new railcard for 26 to 30-year-olds and a pledge to build 300,000 new homes a year on average by the mid-2020s were announced.

Cash for house-building will include a £630 million small sites fund; some £2.7 billion to more than double the Housing Infrastructure Fund; £400 million for estate regeneration; a £1.1 billion fund to unlock strategic sites; £8 billion of new financial guarantees to support private house-building; and an additional £34 million to develop construction skills.

Mr Hammond said that decisions taken in this Budget would mean £2 billion more for the Scottish Government, £1.2 billion more for the Welsh Government and over £650 million more for a Northern Ireland Executive.

Mr Hammond also said that Kensington and Chelsea Council would be provided with a further £28 million for mental health services and regeneration support for the area around Grenfell Tower.

BUDGET 'A RECORD OF FAILURE'

Labour leader Jeremy Corbyn condemned the Budget, saying it was a "record of failure with a forecast of more to come".

Pointing to the OBR's decision to revise down growth figures, Mr Corbyn said: "What sort of strong economy is that? What sort of fit for the future is that?"

Jeremy Corbyn condemned the Budget. Credit: PA

The Labour leader criticised the Government for repeatedly pushing back its target to reduce Britain's deficit, as well as the rise in rough sleeping and the fact 120,000 children would spend this Christmas living in temporary accommodation.

Mr Corbyn said: "The reality test of this Budget has to be how it affects ordinary people's lives.

"I believe as the days go ahead and this Budget unravels, the reality will be a lot of people will be no better off and the misery many are in will be continuing."