Spring Statement: Hammond hails the British economy as 'robust'
Writing exclusively in the Daily Express the Chancellor explains the move will put more money in the pockets of "families, strivers, grafters and carers" up and down the country. "They are the lifeblood of our economy – who keep the country going no matter what,” the Chancellor says. His blockbuster giveaway, which comes ahead of Britain’s exit from the European Union, has been made possible because of a tax windfall from our surging economy.
In a hugely upbeat message Mr Hammond also promises to splash more cash in a multi-billion pound spending bonanza on public services.
Sharing public concerns over Brexit the Chancellor says it is important to “get the right deal” to leave the EU.
But he focuses on the prosperous future that lies ahead, urging people to “keep building a solid foundation for our future, so we can seize the opportunities ahead.”
“For the first time in a decade, we will have genuine and sustainable choices about our future,” he says following years of austerity to help balance the books.
And the Chancellor spells out his decision to slash taxes for millions of workers which will see 1.8 million people getting a “pay rise” thanks to increases in the National Living Wage.
“Some people have argued that we should increase taxes. But we promised to keep taxes as low as possible so that you can keep more of your hard-earned cash.
“Overall, including our increase to the higher rate threshold, this means a tax cut for 32 million people.”
As well as a raft of tax cuts Mr Hammond promises motorists, businesses, High Streets, Schools, local councils and the police will benefit in the new tax year.
“We are a successful, outward-looking nation, ready to embrace a brighter future and build a country of which we can all be proud,” he writes.
The changes are coming into effect as the new financial year kicks in today.
Some 32 million people are set to benefit from the increase to the personal allowance and higher rate threshold.
The tax-free personal allowance has been increased to £12,500 for 2019-20, from £11,850 previously, meaning an extra £130 for the typical basic rate taxpayer.
People do not have to pay income tax on money earned below this amount.
Phillip Hammond announces increase in National Living Wage
The higher rate threshold has also been increased - to £50,000 - meaning an extra £495 for the typical higher rate taxpayer.
Workers will also benefit from an increase in the National Living Wage from £7.83 to £8.21 from April, helping around 1.8 million people.
A full-time worker on the National Living Wage will earn an extra £690 over a year.
The National Minimum Wage has also been increased, to £7.70 per hour for 21 to 24-year-olds and £6.15 per hour for 18 to 20-year-olds.
Taken together with the National Living Wage, 2.1 million people are set to get a pay rise, the Treasury said.
The Treasury said a fuel duty freeze for the ninth year in a row and increases to work allowances in Universal Credit will go towards helping families with the cost of living.
People saving into a workplace pension who are only paying in the minimum amount allowed will see more money going out of their pay packets as minimum contributions have increased from April 6.
Ten million people have already been automatically enrolled into workplace pensions.
A total minimum contribution of 8 per cent of qualifying earnings must be paid into pension pots, of which employers must contribute at least 3 per cent, with the remaining 5 per cent made up by staff.
Previously, total minimum contributions were set at 5 per cent.
Hargreaves Lansdown calculates the increase could mean an average worker sees an extra £30 leave their April pay packet to cover the cost of pension contributions.
But while this may put an added squeeze on incomes, in the longer term the move could make employees much better off.
Hargreaves Lansdown calculates the rise could mean an extra £55,000 sitting in a 22-year-old's pension pot by the time they retire.
Financial Secretary to the Treasury Mel Stride said: "Our Budget was unashamedly for the strivers and the workers who keep the country going.
“From this month we’ve introduced tax cuts, increased wages and boosted support for small retailers to ensure people keep more of the money they work hard to earn.”
Andrew Griffiths discusses National Living Wage in January
The tax changes will see 76,000 people taken out of tax and leave 1.2 million workers better off in the north east in the North East
In the North West and Merseyside some 196,000 will be taken out of tax and 3.4 million income tax payers will be left with more money in their pocket.
For Yorkshire and the Humber 142,000 and 2.5 million will benefit in the same way.
Elsewhere, 2.3 million workers in the East Midlands, 2.7 million in the West Midlands, 3.2 million in the East of England, 4.3 million in London, 4.8 million in the South East, 2.8 million in the South West, 1.4 million in Wales, 2.4 million in Scotland and 760,000 workers in Northern Ireland will receive income tax cuts.
The Chancellor said the start of the new tax year also means nearly £1.1 billion extra funding for the police, access to £1.3 billion more for local councils, and £1.1 billion extra for schools.