Chancellor, Philip Hammond, has delivered his first Autumn statement. Most announcements came as no surprise, with core messages about continuity of financial stability and control of public spending.
The statement was considered and concise, which is encouraging at a time of uncertainty. However, business groups interviewed by the Guardian didn't consider the statement bold enough, and were disappointed that it didn't tackle business rates or provide support following the Brexit vote.
Here are some of the headlines:
Impact on business
To reinforce Britain's competitiveness while negotiating Brexit, Hammond confirmed he will stick to the business tax roadmap that was announced in March, with Corporation tax reducing to 17% and a reduction to business rates worth £6.7bn.
Funding
In an effort to boost the long-term economy and reduce the 'productivity gap', £23bn is going into a new National Productivity Investment Fund, including:
To make Britain the 'go to' place for science and innovation, these sectors will also benefit from an extra £2bn of funding per year for business research and development.
£400m is being invested into Venture Capital Funds from the British Business Bank, to:
Benefits in kind reformed
Tax will become payable by employees who sacrifice salary to receive 'benefits in kind', except:
HMRC expects to gain approximately £2m through this measure.
Economic forecasts downgraded
As a result of the EU Referendum decision, economic growth is predicted to be 2.4% lower than previously expected. Here are the revised OBR forecasts:
Borrowing increased
Hammond made a distinction between borrowing to cover the deficit and borrowing to invest, and at £122bn, Government borrowing will increase significantly.
New fiscal rules
To protect against bumps during Brexit, Hammond announced three new rules:
Just About Managing (JAM)
Due to the state of the economy, Hammond avoided this phrase coined by Theresa May, but did announce:
Budget moved to Autumn
To allow time for tax changes to be made in advance of the tax year, the Budget is moving to Autumn. That means no more Autumn Statements – from 2018, there will be a Spring Statement instead. At least that means major changes will only happen once a year.
If legal hurdles are overcome and Article 50 is triggered at the end of March 2017, the final Spring Budget will be a significant measure of the nation's fiscal position.
Going forward
Although there are many challenges and changes to the economic climate, the Government is committed to boosting business in the UK.
Philip Hammond said: “My priority is to ensure that Britain remains the number one destination for business – creating the investment, the jobs and the prosperity to protect our long-term future.”
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