The Autumn Statement: What It Means for You

Chancellor Philip Hammond announced his first Autumn Statement, focusing on preparing and supporting the economy as the UK begins a new chapter post-Brexit. He revealed that the Autumn Statement will be scrapped in favour of an autumn Budget and a spring Statement, enhancing Parliamentary scrutiny.

For an in-depth analysis, read our What the Autumn Statement Means for You.

Opening Statements

• Fastest growing economy – Britain will be the fastest growing major economy this year, defying expectations since the Brexit vote.
• Long-term challenges – Tackling the UK economy’s long-term weaknesses is more urgent than ever to build an economy for everyone.
• Resilience – Praising George Osborne’s record, Hammond stressed the need for a match-fit economy to face EU exit challenges.

Forecasts

• Growth projections – Estimated at 2.1% in 2016, slowing to 1.4% in 2017, then 1.7% (2018), 2.1% (2019 & 2020) and 2% (2021).
• Brexit impact – Leaving the EU will subtract 2.4 percentage points from growth.
• Surplus timetable – The Government no longer seeks a surplus in 2019/20 but aims to return to balance “as soon as practicable” in the next Parliament.

Borrowing and Debt

• New fiscal rules – Aim for balanced finances in the next Parliament, borrowing below 2%, falling net debt, and a welfare spending cap.
• OBR borrowing forecasts – £68.2 bn (2016/17), £59 bn (2017/18), £46.5 bn (2018/19), £21.9 bn (2019/20), £20.7 bn (2020/21), £17.2 bn (2021/22).
• Debt trends – Public debt peaks at 90.2% of GDP in 2017/18, then falls to 89.7% in 2018/19.

Productivity

Raising productivity is essential. A £23 bn national productivity investment fund will back innovation and infrastructure over five years, funded through additional borrowing.

Housing

• White Paper – A Housing White Paper will address market challenges.
• Infrastructure Fund – £2.3 bn to unlock sites for up to 100,000 homes.
• Affordable homes – £1.4 bn for 40,000 homes and relaxed grant restrictions.
• Right-to-buy pilot – Extended to housing association tenants.
• Tenant fees ban – All fees for renters will be banned.

Infrastructure and Transport

• £1.1 bn for local transport, £220 m for road “pinch points”, £450 m for digital rail signalling, £390 m for low emission vehicles.
• 5G ambition – £1 bn investment in digital infrastructure and 100% business rates relief for new fibre networks.
• £110 m for East West Rail and commitment to deliver the Oxford–Cambridge Expressway.
• Barnett funding for devolved administrations: NI (£250 m), Wales (£400 m), Scotland (£800 m).

Business and Regional Growth

• Industrial Strategy – Foundation for “an economy that works for all.”
• Export finance – Capacity doubled.
• Management skills – New funding initiative.
• Venture capital – £400 m to unlock £1 bn for start-ups.
• Local Growth Fund – £1.8 bn: North (£556 m), Midlands & East (£542 m), South & London (£683 m).
• Devolution deals – New city deals for Stirling, Swansea, Edinburgh, North Wales, Tay Cities; £3.15 bn for London affordable housing and adult education.

Deficit and Spending

Departmental spending remains, with extra funding for the Ministry of Justice. A £3.5 bn efficiency saving must be delivered, with up to £1 bn reinvested in priority areas by 2019/20. Defense, overseas aid, and the pension triple lock commitments stand.

Tax Measures

• Business environment – Aim to keep Britain the number one destination for business.
• Corporation tax – Reduced to 17%, lowest in the G20.
• Insurance Premium Tax – Rising from 10% to 12% in June 2017.
• Employee tax breaks – Ultra-low emission cars, childcare, and cycle-to-work schemes protected.
• Employee Shareholder Status – Tax advantages abolished.
• Tax thresholds – Personal allowance rising to £12,500 and higher-rate threshold to £50,000 by 2020.
• Revenue measures – New tax measures to raise £2 bn over the forecast period.