These are key points from the Autumn Statement 2016.
Revised economic forecasts
2016: 2.1 per cent (up from 2 per cent forecast in March)
2017: 1.4 per cent (down from 2.2 per cent)
2018: 1.7 per cent (down from 2.1 per cent)
2019: 2.1 per cent (unchanged)
2020: 2.1 per cent (unchanged)
2021: 2 per cent (no forecast in March)
The Chancellor confirmed the government no longer seeks to deliver a surplus in 2019-20
OBR forecast: EU Referendum set to hit growth by 2.4 per cent over 5 years
Forecasts for public sector debt increased
- Borrowing up 129% from £94bn to £216bn, over the five years to 2020-21
- Government borrowing expected to be £68.2bn this year; £59 bn 2017/18; £46.5 bn 2018/19; £21.9 bn 2019/2020; £7.2 bn 2021/22
- Public sector net debt will continue to rise as a share of GDP, peaking at 90.2 per cent in 2017-18
- Public spending now 40% of GDP (45% in 2010)
- Public borrowing as a % of GDP 4% last year to 3.5% this year
- Raising productivity is “essential” - new £23bn national productivity investment fund of to spend on infrastructure and innovation over the next five years
- Hammond said "In the real world, takes German worker 4 days to produce what we do in 5."
- Government will prioritise high value investment in infrastructure funded by additional borrowing
- Government to publish strategy to improve productivity outside of London
Breakdown of funding (beware of double counting and reannouncements)
- £1.1bn for English local transport networks
- £220m for strategic roads
- £450m for digital signalling on rail networks
- £390m to “build on our competitive advantage in low emission vehicles and connected or autonomous vehicles”.
- £2.3bn housing infrastructure fund to deliver infrastructure for new housing in areas of high demand.An extra £1.4bn to fund more affordable homes, along with a large scale regional pilot of Right to Buy for housing association tenants
- £1bn of investment in Britain’s digital infrastructure over the current parliament, including business rates relief for new fibre infrastructure to expand Britain’s “full-fibre” broadband network, as well as rolling out broadband in the countryside and funding 5G trials.
- £400m for venture capital funds, freeing up £1bn financing for growing new businesses
- Regional infrastructure spending
- £1.8bn to local infrastructure projects including £542m to Midlands and £683m for the South East
- Evaluation of Midlands rail hub
- London gets devolved adult skills budget + £3.16bn of affordable housing funds.
- £250m infrastructure to N Ireland, £400m to Wales and £800m to Scotland
- Mayors leading combined authorities will get additional borrowing powers
- More detailed proposals for rail projects for the “northern powerhouse” will be considered “over the coming weeks.” HMT confirmed yesterday the start of investigatory work on building HS3, an east-west railway across the north of England, with the first section running under the Pennines between Leeds and Manchester and eventually extending across the north from Liverpool in the west to Hull in the east.
- Government has confirmed need for Crossrail 2.
- Hammond has asked the National Infrastructure Commission to make recommendations for future projects based on investment of between 1 and 1.2% of GDP, from 0.8% this year.
Corporation tax as planned by George Osborne: the rate will fall to 17 per cent by 2020.
The tax break on salary sacrifice schemes on employees’ benefits in kind will be removed from next April.
Tax-free personal allowance of £11,500 will increase to £12,500 and the higher rate threshold to £50,000 by the end of this parliament.