The Autumn Statement by The Chancellor of The Exchequer

Written by Karen Bryan

one pound signSince Philip Hammonds appointment as Chancellor of the Exchequer he has warned about the economic damage started by Brexit and urges that this needs to be heeded. He speaks of the rainy days to come and says he has every right to feel gloomy at the present time because of the massive uncertainties caused by withdrawing from the EU. He speaks of “headwinds” threatening the country. However, he also commented that so far the economy had “confounded commentators” with its resilience and strength. He has since then injected optimism and hope with his forecasts and pledges in the Autumn Statement.

Growth Forecasts

Because of the uncertainty caused by Brexit the OBR had pitched the forecast for growth for the coming year from 2.2% to 1.4%. Yet this is still equivalent to the IMF’s forecast for Germany. It is also higher than the forecast for countries such as Italy and France. The new Chancellor has said that leaving the European Union puts more pressure than ever on the need to tackle the economy’s long-term weaknesses. He also says that leaving the European Union will “change the course of Britain’s history” and potentially mean an even weaker pound against the dollar.

The Autumn Statement Key Points

  • No further welfare savings measures
  • Personal Allowance increase to £12,500
  • National Living Wage increase from £7.20 to £7.50 in April 2017
  • Ban on letting agents charging fees to renters
  • Three year NS&I Investment Bond available from spring 2017
  • Fuel duty frozen for a seventh year
  • National productivity investment fund of £23bn
  • £1bn investment in full-fibre broadband
  • £2.3bn Housing Infrastructure Fund for up to 100,000 new homes
  • Continued support for Help to Buy loan scheme
  • Corporation Tax to fall to 17%
  • Salary sacrifice schemes to be subject to tax as cash income
  • Autumn statement abolished. Instead, the UK will hold annual budgets every Autumn from 2017 and will hold Spring fiscal statements.

Observations on the Autumn Statement

  • It was originally feared that average earnings would fall behind inflation, since the Statement this is no longer expected to happen.
  • Before the Referendum on June 23 George Osborne warned the country that leaving the European Union would cause the loss of 500,000 jobs. According to the Office for Budget Responsibility’s (OBR) forecast, employment is expected to rise by up to half a million by 2021.

Housebuilding and Affordable Homes

One of the big stories to come from the Autumn Statement was Philip Hammonds declaration of the government’s determination to tackle the housing shortage. This is a problem which has plagued Britain for decades. This house building boom is also a bid to keep the nation’s economy on track. Billions will be ploughed into helping developers build affordable homes on brownfield sites. There are also new rules devised which will help developers to demolish old offices and replace them with new homes on a like-for-like basis. There has also been a promise of a further £3bn in loans to help small and medium sized building contractors and construction specialists. There is also £2bn set aside to encourage new developers to build on unused land owned by councils and the government.