Budget 2017: NHS, families, cars - your questions answered

Philip Hammond carrying the budget box Image copyright JEFF OVERS

As Chancellor Philip Hammond unveiled the Budget 2017, BBC audiences got in touch to ask questions about the meaning of the government's economic plans.

BBC Business journalist Ian Pollock was on hand to investigate.

Katharine Rosentiel asks: "Will there be more money for the NHS?"

The chancellor tried to address the widespread concerns about the squeeze on social care for the elderly, which is provided by local authorities, and the current pressure on the NHS.

He said that over the next three years (2017-20) the government would allocate extra money for social care. The Treasury's Red Book, which spells out the changes, says this will cost an extra £3.4bn in that time.

Meanwhile there will be an extra £120m, in this coming financial year only, to pay for some GPs to work in A&E departments to sort out supposedly "inappropriate" attenders.

Joanna Henley asks: "How much is going to be spent on mental health care? Is that amount an increase or decrease or the same?"

The government did not make any specific mention of psychiatric care.

But it pledged to spend an extra £425 million on the NHS in England in the next three years. Most will go to bolster the so-called Sustainability and Transformation Plans (STPs). The government says these plans, being drawn up by hospitals and the various health authorities, will improve local services, though critics say they are turning out to be a cloak to disguise current and forthcoming cutbacks.

NHS Transformation plans: Cuts or change for better?

Meanwhile £120 million will be spent as a one-off sum to help A&E departments in 2017-18 to deal with their heavy workloads. Among the ideas is to employ GPs on-site to deal with people who don't really need A&E care.

Laura asks: "I am a single mum of two children under 10 only earning £19.5K - is this budget going to have drastic financial implications for me?"

There were very few new decisions about personal tax and family finances in this Budget. But a decision made in January - and confirmed today - might affect families.

As announced by the previous Chancellor George Osborne, child tax credit and universal credit will not be available to any third or subsequent child born after the start of the new tax year. But Chancellor Hammond said there would be exemptions to this if the family was in "particular circumstances", for instance with the birth of twins or triplets.

Valerie asks: "What are the increases in car tax, petrol, and beer, spirits etc?"

For owners of heavy goods vehicles, vehicle excise duty and the road user levy will be frozen for the next five years. And as announced in last year's Autumn Statement, fuel duty will be frozen for the next five years. Also, a new set of bands for vehicle excise duty (still known colloquially as road tax) will start this April but for new cars only. This will eventually raise well over a billion pounds extra for the Treasury. And drinkers of sugary drinks will still have to pay for the soft drinks industry levy, due to start in April 2018.

Meanwhile the government's Red Book lists these other changes:

  • From 13 March 2017, the duty rates on beer, cider, wine and spirits will increase by RPI inflation, in line with previous forecasts. The government will also consult on: a) introducing a new duty band for still cider just below 7.5% abv to target white ciders b) the impacts of introducing a new duty band for still wine and made-wine between 5.5% and 8.5% abv.
  • Tobacco duty rates - as announced at Budget 2014, duty rates on all tobacco products will increase by 2% above RPI inflation. This change will come into effect from 6pm on 8 March 2017.
  • Minimum Excise Tax - the government will introduce a Minimum Excise Tax for cigarettes. This will target the cheapest tobacco and promote fiscal sustainability. The rate will be set at £268.63 per 1,000 cigarettes. It will take effect from 20 May 2017.

Doug asks: "How much will the reduction in corporation tax cost this country from 2010 to 2020?"

What a good question. Some economists argue that low tax rates in fact lead to higher tax revenues, as tax payers become less inclined to dodge the tax in the first place.

All that is a bit hard to prove, if only because the government's tax-take fluctuates naturally with the growth or decline of the economy from year to year, making the effects of lower or higher tax rates a bit hard to disentangle.

But, for what it's worth, the Treasury Red Book tells us that cutting corporation tax rates will cost the government a lot of money. Starting in 2019-20 the new, low 17% rate is expected to "give away" £510m, then £2.6bn the next year, and then £2.6bn the year after.

But that's not all. The Budget of summer 2015 cut corporation tax to 19% from 2017-18 and to 18% in 2020-21. Those changes "gave away" even larger sums: £2.3bn in 2017-18, then £2.2bn, £3.1bn, £4.9bn and £5.3bn in the subsequent years. That is lot of potential income. Nearly £24bn in fact.

Terence O'Neil asks: "What use is 2% growth if the currency is devalued by 15%?"

A touchy subject, you might think. But it is in fact addressed in the Budget document called "Impact on Households".

The devaluation of the pound since the Brexit vote is widely forecast to push up inflation by raising the cost of imported goods. And the government - citing calculations from the Office for Budget Responsibility - says real household disposable income, per person, will drop by 0.7% this year.


"The recent sterling depreciation raises inflation while nominal earnings growth increases slightly" it explains. In other words, rising prices will squeeze real incomes.

But that effect is predicted to be only temporary. "Real household disposable income per head is expected to return to growth in 2018 and be 2.0% higher in 2021 than 2016," it adds.

Paul McCabe asks: "How does the rise in NIC for the self-employed bring parity when the employed have access to paid holiday and sickness pay?"

In reality there will never be full "parity" between the status of the employed and the self-employed, who don't get unemployment benefit, let alone sick pay or paid holidays. However the chancellor did say that he would stage a consultation this coming summer about improving state-provided parental benefits for the self-employed.

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