Autumn Statement: At a glance

IN the first major economic statement since the Brexit vote Chancellor Philip Hammond underlined a need to prepare the economy to be “match-fit” for the transition that will follow the EU vote.

Andrew Spence, head of tax in the Midlands, said: “In what was really a mini-budget, with 43 measures including 18 tax changes, the Chancellor’s first and last Autumn Statement was what we expected – giving a little bit here and taking a little bit there. Most of the measures reflected a post-Brexit economy, with long term growth being revised downwards versus inflation only getting higher, thus stimulating the need for additional borrowing.

“As if forecasting for next year wasn’t hard enough for Midlands businesses, with Brexit and the US election results to digest, the Autumn Statement has added an unexpected rise in the minimum wage (from £7.20 to £7.50 an hour) together with a hike in employers’ national insurance and a restriction on using losses and offsetting interest costs.

“If you add the uncertainty around a supply of workers once we leave the EU it will be a tough few years for those businesses which employ high numbers of people across the region.”

The state of the economy
Office for Budget Responsibility growth forecast upgraded to 2.1% from 2.0% in 2016, then downgraded to 1.4% from 2.2% in 2017 due to a fall in the value of sterling.
OBR forecasts growth of 1.7% in 2018, 2.1% in 2019 and 2020 and 2% in 2021
Government no longer seeking a budget surplus in 2019-20

Public borrowing/deficit/spending
Debt will rise from 84.2% of GDP last year to 87.3% this year, peaking at 90.2% in 2017-18
OBR forecasts borrowing of £68.2bn this year, then £59bn in 2017-18
£23bn to be spent on innovation and infrastructure over five years
£2bn per year by 2020 for research and development funding

Taxation/Pay
Tax-free personal allowance will rise to £12,500 by the end of the Parliament
Higher rate income tax threshold to rise to £50,000
National living wage to rise from £7.20 per hour to £7.50 next April – a pay rise of more than £500 per year for a full time worker
Insurance premium tax to rise from 10% to 12% next June

Welfare
No plans for further welfare savings in this Parliament

Fuel
Cancelled fuel duty rise for seventh successive year, a tax cut worth £850m and the longest fuel duty freeze in 40 years

Housing
£2.3bn housing infrastructure fund for up to 100,000 new homes
£3bn homebuilder’s fund for 200,000 new homes and £2bn to build on public sector land
£1.4bn to deliver 40,000 additional affordable homes

Business
Mr Hammond outlined commitment to ensure Britain remains “Number one destination” for business.
Doubling UK export finance capacity to help exporters
£400m venture capital fund to unlock £1bn for growing firms
Corporation tax will fall to 17% as planned
Increase rural rate relief to 100%
New national productivity investment fund of £23bn over five years

Infrastructure/transport/regions
£1.1bn extra investment for local transport networks
£1.8bn from Local Growth Fund to English regions

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