Budget Commentary 2017 - a legal commentary
Budget 2017 is complete. Amid intense financial pressure due to public sector net borrowing worsening and the current uncertainty in the economy due to Brexit, the Chancellor has outlined the government's plans to create a sustainable future for Britain. He outlined a balanced approach to reducing Britain's deficit whilst encouraging growth and investment.
Key Highlights from the Budget 2017:
- Stamp duty abolished for first time buyers up to £300k, or £500k in London.
- £44bn capital investment to boost the housing market. Construction of 300,000 homes being built every year.
- Diesel cars which don't meet quality standards by 2018 wil be hit by additional tax.
- £40m to train maths teachers and £600 Maths premium for every additional pupil who takes A level or core maths.
- National living wage increased by 4.4pc to £7.83 from £7.50.
- Extra £10bn capital investment to the NHS over this parliament.
- No reduction in VAT to small businesses. Uplifting of business rates based on the CPI inflation index not RPI by two years, saving businesses £2.3bn.
- Investment in broadband and infrastructure - £500m investment in 5G and £400m investment into electric cars.
From some of the key points announced we provide responses from Fieldfisher industry experts, voicing their response to the Budget 2017.
Budget Review: Oil and Gas
"The Chancellor has gladdened the heart of the UK offshore oil & gas industry by announcing that from November 2018 that tax history is transferred from seller to buyer when UK North Sea assets are sold on. This change is calculated to increase the economic viability of mature oil and gas fields on the UKCS and so delay the onset of decommissioning, thereby generating more revenue for companies and the Treasury alike as well as save the Treasury as much as £10 million per annum in deferred tax relief. The offshore industry has been seeking this change for some time and something which their trade body, Oil & Gas UK has championed. As the oil price continues to firm up and companies continue to drive down the cost in producing a barrel of oil from the North Sea, this tax change can only help to fill the sails of an industry sector that has had to weather some very troubled waters over the last few years.
This change is likely to attract new investment into the North Sea, much of which will be through new smaller players as more established companies continue to rationalise their portfolios as we see only today with BP announcing the sale of 3 mature fields to Serica Energy." Stuart Carter, Partner, Corporate Group
Budget Review: Technology
"We welcome the Government's announcement that it will invest £500m in tech industries, not least in the context of the fast-paced technological disrupters affecting industry: autonomous vehicles, AI, blockchain perhaps and the imminent arrival of 5G.
"While not looking the proverbial gift horse in the mouth, we also have to acknowledge that the amount is relatively modest in the context of the pace of change: significant investment will no doubt be driven by the private sector." Robert Shooter, Partner, Head of Technology, Outsourcing and Privacy
Budget Review: Employment
"This was, as most Budgets are, a political budget with plenty of announcements designed to attract voters and to mask the significant reduction in GDP growth figures. While there was assurance of additional spending to assist with other parts of the Northern Powerhouse, such as Newcastle upon Tyne, Redcar and Tees Valley, the closest the Chancellor came in assisting the North West more specifically, was an announcement that Trans Pennine trains would receive Wi-Fi connectivity. There is no additional spending commitment on infrastructure in the North West beyond that announced in previous budgets.
"The Budget could help many ordinary people throughout the UK by the increase in National Minimum Wages, National Living Wage and the income tax personal allowance, help to first time buyers in stamp duty scrappage, and a change to business rate increase and evaluation periods, but there is no Northern give away on this occasion." David Carmichael, Partner, Employment and Pensions