The Chancellor’s Autumn Statement outlined the government’s Spending Review and set out both tax and economic measures.
Philip Hammond’s speech in short:
- The IMF predicts this will be the fastest growing major advanced economy in the world this year.
- Economy with employment at a record high – and unemployment at an 11- year low.
- Five months ago today, the UK voted to leave the European Union and chart a new future for our country.
- The government has no plans to introduce further welfare savings measures in this parliament beyond those already announced.
“This Autumn Statement will prioritise additional high-value investment, specifically in infrastructure and innovation, that will directly contribute to raising Britain’s productivity” said Mr Hammond.
Key points of the Chancellor’s Autumn statement:
- A new National Productivity Investment Fund of £23 billion to be spent on innovation and infrastructure over the next five years
- A new £2.3 billion Housing Infrastructure Fund to deliver infrastructure for up to 100,000 new homes in areas of high demand
- An additional £1.1 billion of investment in English local transport networks, where small investments can offer big wins
- UK to be a world leader in 5G – 100% business rates relief for a 5 year period on new fibre infrastructure, supporting further roll out of fibre to homes and businesses.
- Measures to back business
Doubling UK Export Finance capacity to make it easier for British businesses to export;
An additional £400m into venture capital funds through the British Business Bank, unlocking £1 billion of new finance for growing firms;
A Treasury-led review of the barriers to accessing patient capital in the UK.
- Driving up the performance of our regional cities.
Strategy for addressing productivity barriers in the Northern Powerhouse;
Go-ahead to a programme of major roads schemes in the north;
The allocation of £1.8 billion from the Local Growth Fund to the English regions including £556 million to Local Enterprise Partnerships in the North of England;
- Last Autumn’s Spending Review remains
Corporation tax will fall to 17%, the lowest overall rate of corporate tax in the G20
The Carbon Price Support will continue to be capped out to 2020
Implementation of the business rates reduction package worth £6.7 billion
Lower the transitional relief cap from 45% next year to 43%, and from 50% to 32% the year after
Increase the Rural Rate Relief to 100%, giving small businesses in rural areas a tax break worth up to £2,900 per year
From April 2017 – the employee and employer National Insurance thresholds at £157 per week – There will be no cost to employees, and the maximum cost to business will be an annual £7.18 per employee
Insurance premium tax will rise from 10% currently, to 12% from next June
For pensions that have been drawn-down, reduction of the £4,000 the Money Purchase Annual Allowance, to prevent inappropriate double tax relief
Shut down inappropriate use of the VAT flat rate scheme that was put in place to help small businesses
Raising the tax-free personal allowance will rise to £11,500 in April and raising the allowance to £12,500, and the higher rate threshold to £50,000, by the end of this Parliament
Once £12,500 has been reached, the personal allowance will rise automatically during the 2020s in line with inflation, rather than the National Minimum Wage as currently planned
30 hours a week of free childcare for all 3 and 4 year olds from September
- The NHS’ Five Year Forward View plan – £10 billion of additional funding a year by the end of 2020-21
- The National Living Wage will increase from £7.20 to £7.50 in April next year
- The private rental market – ban fees to tenants as soon as possible
- A new, market-leading savings bond through NS&I with an interest rate of around 2.2% gross and a term of 3 years. Savers will be able to deposit up to £3,000
- Cancelling the fuel duty rise for the seventh successive year.
“This is my first Autumn Statement as Chancellor, and last.”
Starting in autumn 2017, Britain will have an autumn Budget, announcing tax changes well in advance of the start of the tax year. From 2018 there will be a Spring Statement, responding to the forecast from the OBR, but no major fiscal event.
ICAEW Chartered Accountants Manchester response to Autumn Statement
Alan Clarke, President commented: “The Chancellor has quite rightly identified serious productivity gaps between London and other parts of the country and specifically in the country’s second and third biggest cities. We therefore welcome his continued support for the Northern Powerhouse vision and the planned investment in rail and road infrastructure designed to help deliver it.
“We need a robust economic plan that puts the North at the forefront of infrastructure spending plans so that businesses can connect with customers both nationwide and worldwide.
“It is also good to hear that the Government is investing in doubling UK export finance which will enable the GM businesses we represent to explore new global opportunities post-Brexit.
“Focus on digital infrastructure – and the £1billion investment in becoming a world leader in 5G – is to be welcomed, as is the proposed investment in innovation, especially science and technology – a sector in which GM excels and would expect to benefit.I commend this Statement to the House.”