Review of Budget 2018; the end of austerity?

Whether you watched, listened or caught up with the Budget on social media or in the newspapers, the reaction to its contents has been mixed.

Unusually held on a Monday, this marked the last Budget before Brexit is confirmed on 29 March 2019, however, the ‘B’ word was conspicuous by its low-key presence throughout Rt Hon Philip Hammond’s address to Parliament. Undoubtedly, The Chancellor enjoyed reiterating the phrase “the end of austerity is near” and this was backed up with a number of headline-grabbing points, at a glance:

  • The personal allowance threshold, the rate at which people start paying income tax at 20%, to rise from £11,850 to £12,500 in April 2019 – a year earlier than planned
  • The higher rate income tax threshold to rise from £46,350 to £50,000 in April 2019
  • National Living Wage increasing by 4.9% to £8.21 an hour, from April 2019
  • Private finance initiative (PFI) contracts to be abolished in future
  • An extra £20.5bn for the NHS over the next five years
  • An extra £2bn a year for mental health services, ambulances, centres and resource

Source: BBC. For a full list of the 69 points raised in the 2018 Budget, please click here

Since a bullish Budget in 2017, where the UK growth forecast was talked up, this has recently been brought down in recent statements, something Jeremy Corbyn leapt upon in the Opposition’s response. However, whilst we understand Mr Corbyn’s point, at MRK Associates, we are firmly in the camp of “growth is growth.” We are facing one of the biggest upheavals for the country since WW2 when Brexit is confirmed, and therefore any sign of growth has to be welcomed.

The forecast for UK growth has been raised for 2019 from 1.3% to 1.6% and annual forecasts raised to 1.4%, 1.4%, 1.5% and 1.6% in 2020, 2021, 2022 and 2023 respectively (source: BBC).

Growth manifests itself in many forms. For instance, we are pleased to see wage growth is at its highest in nearly a decade. This shows confidence and resilience for UK business.  We have seen robustness and positivity from businesses when they’re recruiting through us.

In our opinion, there was much to welcome from the Budget. Yes, there were headline-grabbing policies, but after years of austerity, the British people need something to enjoy. Lowering the threshold of income tax will, it was reported, benefit over 32 million workers. Naturally, you’d understand the Opposition political parties to be less than enthused, but was this the first Budget in a long time that was “substance over style”?

Saying all that, another point mentioned in the Budget was the extension of the Off-Payroll legislation that is being extended from the Public sector into the Private sector in April 2020. This could have a significant impact on the UK flexible working/ interim market but that’s a whole other conversation………!

Roland Seddon, Managing Director, MRK Associates.

MRK Associates is a recruitment and career advisory company specialising in three distinct areas of professional employment – finance/accountancy jobs, office support/administration jobs and revenue management/yield jobs. Our main geographical focus is in the Northern Home Counties area (Buckinghamshire, Hertfordshire, Oxfordshire and Bedfordshire) where we provide a personal, knowledgeable and professional service within these markets.

For more information, please telephone 01442 894555 or email: info@mrkassociates.co.uk

 

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