A few grains of sugar for those just managing, the Chancellor noted caution surrounding the national debt, the possible effects of BREXIT, however outlined moves to increase the fiscal spend on infrastructure projects.
The OBR has revised its March forecasts.
GDP Growth: 2017 1.4%, 2018 1.7%, 2019 2.1%
Labour Market: 500,000 jobs created over the forecast.
Deficit to be £21Bn into the next General Election. Debt to be 90.2% of GDP in ’17-’18, then projected to fall in ’19-’20.
George Osbourne’s fiscal rules have been shelved. 3 New rules. Books to be balanced as early as possible in the next Parliament, welfare cap and debt to fall as a share of national income by 2020.
- Preparing for any Brexit shocks and £100Bn deterioration in public finances is the main message and reason for a muted statement.
- New Productivity Fund of £23Bn
- £2bn R&D in science and innovation
- £2.3Bn for infrastructure spend and delivering 100,000 new homes
- Promises of cheaper housing with £1.4Bn for delivering 40,000 new ‘affordable’ homes
- £390m to build on UK lead in low emission vehicles and driverless cars, as well as tax breaks for EV charging units.
- Resources for Roads and Transport infrastructure including ‘Northern Powerhouse Rail’.
- Aim to be a world leader in 5G with £1bn investment. April ‘17 100% rate relief on fibre infrastructure.
- £400m to UK venture capital, so UK tech companies aren't sold early to investors abroad.
- £1.8Bn from Local Growth Fund to local regions. £556m to LEPs in the North of England.
- LIBOR fines to Armed Forces charities and Tampon tax to Comic Relief.
- Corporation Tax cut to 17% by 2020.
- Insurance Premium Tax rise from 10% to 12%.
- Review of tax for the self-employed. Salary Sacrifice and benefits in kind to be culled, although this does not include pension, childcare vouchers or cycle to work schemes.
- Chancellor Philip Hammond has released a consultation on reducing the money purchase annual allowance to £4,000.
- The money purchase annual allowance is set on people who have flexibly accessed their pension savings under pension freedoms.
- It means that these people are limited in how much money they can put into their pension.
- The money purchase annual allowance was moved down to £10,000 in April 2015. This will now fall to £4,000.
- Implement on restriction on corporation tax relief – large international businesses targeted.
- Keeps the pledge for income tax free threshold to £12,500 and higher threshold to £50,000 by 2020.
- 4% increase to the National Living Wage to £7.50 (£7.64 was expected earlier this year) from April 2017.
- A few grains of sugar for the “JAMs” – with modest reductions in the tapering of Universal credit 65% to 63%. Not until 2020/21
- Letting agents will be banned from charging tenants fees.
- New 3 year NS&I Investment Bond paying 2.2% Gross. Up to £3,000.
- Fuel duty frozen.
- Abolishing the Autumn Statement, Spring Budget will be the last. Autumn budget only, with a Spring statement.