The first major economic statement since the EU referendum focused on measures to “prepare our economy to be resilient as we exit the EU”.
Unsurprisingly, the Office for Budget Responsibility (OBR) forecasts for growth have changed since the last figures were published in March. The prediction for 2016 is 2.1%, slightly higher than the 2% forecast in March 2016.
However, in 2017 growth is expected to slow to 1.4%, lower than the 2.2% predicted at the Budget in March.
Aside from economics, chancellor Philip Hammond’s first Autumn Statement was light on new announcements.
There was a focus on investment in infrastructure and innovation with money allocated for R&D, homebuilding and transport.
He also confirmed various measures announced at Budget 2016 including:
- an £11,500 personal allowance from April 2017
- corporation tax will fall to 17% by 2020.
The end of the Autumn Statement
The main surprise was that this was the final Autumn Statement.
From 2018 the Budget will move to the autumn. A statement responding to OBR forecasts will follow in the spring but the chancellor was keen to stress that it will not be a “major fiscal event”.
The following report summarises the announcements made by chancellor Philip Hammond during the 2016 Autumn Statement on 23 November 2016.
Business
Corporation tax
Main rate to reduce to 17% by 2020.
Salary sacrifice
Schemes taxed at the same rate as cash income.
Infrastructure
Increased funding for housing, transport and R&D.
Personal
Personal allowance
Allowance to increase to £11,500 in April 2017.
National living wage
Increase to £7.50 an hour from April 2017.
National insurance
Employees and employers thresholds aligned.
Pensions
Money purchase annual allowance reduced to £4,000.
Savings bond
New NS&I savings bond to be launched.
Other
Fuel duty
Frozen for another year.
Broadband
£1 billion investment in full-fibre broadband and 5G.
Local Growth Fund
£1.8 billion for different regions.
Autumn Statement
Autumn Budget from 2017 and Spring Statement from 2018.
For a full copy of our Autumn Statement report please contact Vicki Harper, Director of Client Services.
