PHILIP Hammond’s big Budget giveaway unravelled last night, after economists ripped apart his proposal to cut stamp duty for first-time buyers.

The Tory Chancellor surprised MPs when, towards the end of his Budget speech, he promised to abolish stamp duty for all first-time-buyers in England, Wales and Northern Ireland, on properties worth up to £300,000.

“That is a stamp duty cut for 95 per cent for all first-time buyers who pay stamp duty and no stamp duty at all for 80 per cent of first-time buyers from today,” Hammond told the Commons. “When we say we will

revive the home-owning dream in Britain, we mean it.”

But in damning analysis of the Chancellor’s promises by economists at the independent Office of Budget Responsibility (OBR) said the policy would actually lead to an increase in house prices.

In their Economic and Fiscal Outlook, the OBR said the “consequence of introducing the relief will be to increase house prices – in this case by around 0.3 per cent”. It added that the price paid by first-time buyers “would actually be higher” because of Hammond’s policy.

“Thus the main gainers from the policy are people who already own property, not the first-time buyers themselves,” the OBR added. It also said that it would help just 3500 people buy a house who weren’t already planning on purchasing property.

For this, the Government, will lose £3.2 billion in taxes, effectively meaning that every first-time buyer benefitting from this policy will cost the taxpayer £924,285.71.

It was the first Budget since Theresa May gambled on a snap election in June and lost the Tories their majority. Setting out the state of the economy, Hammond revealed that growth would be poorer than expected at the time of his last Budget in March.

The latest figures showed it slowing to 1.5 per cent this year, down from 1.8 per cent in 2016, and falling to 1.4 per cent in 2018. The Chancellor insisted he would still meet his target to cut the deficit to below two per cent of GDP by the end of the Parliament. Labour leader Jeremy Corbyn pointed out that the Government had promised to eradicate the deficit in “2015, then 2016, then 2017, then 2020 and now 2025”.

He added: “They’re missing their major targets but the failed and damaging policy of austerity remains.”

There was no raising of the public-sector pay cap. Instead the Chancellor said he would wait to see what independent pay bodies recommend,

Petrol, diesel and alcohol duty were frozen, though Hammond did announce an increase in duty on high-strength white ciders, not hugely dissimilar to the Scottish Government’s minimum unit pricing policy.

There was an additional £28 million of Government funding to help the victims of the Grenfell Tower fire, to pay for mental health and counselling services and regeneration support.”

Hammond said this was a Budget that was preparing Britain for the future, and set aside £3bn for Brexit planning. “I stand ready to allocate further sums if and when needed,” he said. “No one should doubt our resolve.”

Corbyn responded: “The reality test of this Budget has to be how it affects ordinary people’s lives. I

believe as the days go on 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.”

SNP Westminster leader Ian Blackford was scathing: “The Chancellor has painted a picture of a strong economy, ready for the impending economic disaster of Brexit. We all have to wonder just what planet he is on. Most workers are seeing a decline in their living standards and have done so since the financial crisis.

“We are living through the worst decade for wage growth in 210 years. Young people are going to be poorer than their parents. Housing has become unaffordable for many. The austerity economic model has failed millions.”

In their analysis of the Budget, the Resolution Foundation, think-tank said the downgrade in growth was bad for family finances.

Their analysis suggested disposable incomes are now expected to be £540 lower by 2023 than forecast in March, and that annual pay has fallen by around £1000 and won’t return to its 2008 peak until 2025.

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Budget: Some key points

  • Stamp duty to be abolished immediately for first-time buyers purchasing properties worth up to £300,000 in England, Wales and Northern Ireland.
  • Compulsory purchase of land banked by developers for financial reasons.
  • £28m for counselling andmental health support for victims of the Grenfell fire and for regeneration of surrounding area.
  • Tobacco up two per cent, about 28p on a pack of 20.
  • Duty on hand-rolling tobacco will increase by additional 1 per cent
  • Duty on beer, wine, spirits and most ciders will be frozen - roughly 12p off a pint, and £1.15 off a bottle of whisky.
  • Duty on high-strength “white ciders” increased via new legislation.
  • No fuel duty rise for petrol and diesel cars.
  • Vehicle excise duty for new diesel cars not meeting latest standards to rise by one band.
  • Tax-free personal allowance on income tax to rise to £11,850 in April 2018.
  • Higher-rate tax threshold to increase to £46,350.
  • National Living Wage to £7.83 in April.
  • £3bn to be set aside over next two years to prepare UK for Brexit.
  • £1.5bn package to “address concerns” about the delivery of universal credit.
  • £500m support for 5G mobile networks, full fibre broadband and artificial intelligence.
  • £540m to support the growth of electric cars.
  • Charges on single-use plastic items to be looked at.
  • £30m to develop digital skills distance learning courses.
  • No extra funding for nurses pay but a guarantee that if future pay rises are recommended by independent body, there will be new money.
  • Scottish police and fire services to get refunds on VAT from April 2018.