The Chancellor, Philip Hammond, gave what was his first and last Autumn Statement. This time next year the Autumn Statement will become the Autumn Budget, with our first Spring Statement in 2018.
You might be forgiven for thinking this is just a seasonal shift in the announcements, however this is not the case. The Autumn Budget will be the key address for announcements around changes to taxation and fiscal policy. In contrast, the new Spring Statement will be just that, a statement on economic and fiscal performance in line with requirements of the Office for Budget Responsibility (OBR).
Given the content of the last Autumn Statement, many might think that this was the headline grabbing news as the announcements overall seemed a little bland. This might reflect the fact that since Brexit we haven’t seen the economic meltdown some predicated and that overall the economy is not in a bad place, therefore there is no need for a knee jerk reaction.
The focus seemed to be on maintaining our position as the, or one of the, fastest growing major economies, ensuring we continue to improve our overall productivity and that we are an attractive proposition for investment and trade. The key driver for this must be the announcements around increased expenditure in infrastructure especially road, rail, housing and digital connectivity using 5G.
The Chancellor also outlined financial support for improving productivity with the introduction of the National Productivity Investment Fund. To address the economic imbalance between London and the South East with other parts of the country he pledged financial support for the Northern Powerhouse and the Midlands Engine, along with further support for the development of links between Oxford and Cambridge to capitalise on the scientific and technological advances between the two key University cities.
More rural businesses no doubt will welcome the provision of 100% rates relief for businesses and the announcement that the fuel duty levy has once again been cancelled. Those on the National Living Wage will benefit from the proposed increase from £7.20 to £7.50 in April next year. However and not least for those businesses who have a meaningful workforce on the National Living Wage, including those in the care, hospitality, food and agricultural sectors, the increase could come at a time when they are facing increased input costs generally.
As ever the devil will be in the detail and no doubt over the coming days much time and consideration will be given to the statements made, the press coverage and looking at the small print. Overall the last Autumn Statement certainly wasn’t a swan song. Thought really does turn to next March, with the timing of the Budget likely to coincide with the possible triggering of Article 50 and the UK’s formal declaration to leave the EU.